8-K: Noble Romans Announces Auditor Resignation Amidst Material Weaknesses Disclosure

Noble Romans, Inc. has announced the resignation of its principal accountant, Sassetti LLC, effective June 18, 2025, while confirming no disagreements but noting previously identified material weaknesses in its financial reporting.

Summary

• Noble Romans, Inc. (the "Company") announced that Sassetti LLC ("Sassetti") resigned as its principal accountant, effective June 18, 2025.
• The Company's Board of Directors is currently evaluating alternative independent accountants to serve as the auditor for the 2025 fiscal year.
• Sassetti's report on the Company's consolidated financial statements for the year ended December 31, 2024, did not contain any adverse opinion, disclaimer, qualification, or modification.
• The consolidated financial statements for the year ended December 31, 2023, were audited by another firm, which issued an unqualified and unmodified opinion.
• There were no disagreements between the Company and Sassetti on accounting principles, financial statement disclosure, or auditing scope/procedure during the fiscal years ended December 31, 2024 and 2023, or the subsequent interim period.
• However, reportable events included the identification of certain material weaknesses, as detailed in the Company's Annual Report on Form 10-K filed on June 9, 2025.
• Sassetti LLC has confirmed its agreement with the Company's statements regarding its resignation in a letter dated June 20, 2025, filed as Exhibit 16.1.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the resignation of the principal accountant and, more significantly, the previously disclosed material weaknesses in internal controls. While there were no disagreements with the auditor and the 2024 audit opinion was clean, the underlying control issues are a concern. The company's proactive search for a new auditor mitigates some negativity.

Positives

• Sassetti's audit report for the 2024 fiscal year did not contain any adverse opinion, disclaimer of opinion, or qualifications regarding uncertainty, audit scope, or accounting principles.
• There were no disagreements between Noble Romans and Sassetti on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
• The previous auditor issued an unqualified and unmodified opinion on the 2023 consolidated financial statements.

Negatives

• The principal accountant, Sassetti LLC, resigned, necessitating the Company to find a new auditor.
• The Company previously identified and disclosed certain material weaknesses in its Annual Report on Form 10-K filed on June 9, 2025.

Risks

• The Company faces the risk of disruption and potential delays in its financial reporting process while it evaluates and appoints a new independent accountant for the 2025 fiscal year.
• The previously identified material weaknesses in internal control over financial reporting, as disclosed in the 2024 Form 10-K, pose a risk to the accuracy and reliability of future financial statements.
• Failure to remediate material weaknesses could lead to further scrutiny from regulatory bodies and potentially impact investor confidence.

Future Outlook

Noble Romans, Inc. is actively evaluating alternative independent accountants to serve as its auditor for the 2025 fiscal year, indicating a forward-looking effort to ensure continuity in its financial oversight.

Management Comments

• The Board of Directors of the Company is evaluating alternative independent accountants to serve as the Company's auditor for 2025.

Industry Context

Changes in a company's certifying accountant are not uncommon, but they often draw scrutiny, especially when coupled with disclosures of material weaknesses. While the lack of disagreements with the resigning auditor is a positive sign, the underlying material weaknesses in internal controls are a more significant concern, as they can impact the reliability of financial reporting. Companies in the restaurant and food service industry, like Noble Romans, are subject to the same rigorous financial reporting standards as other public companies, and maintaining strong internal controls is crucial for investor confidence.

Comparison to Industry Standards

• This document primarily concerns an administrative change in the Company's auditor and internal control disclosures, rather than operational or financial performance metrics. Therefore, a direct comparison to specific comparable companies, projects, or global benchmarks based on financial results is not applicable from the content provided.
• However, the identification of material weaknesses in internal controls is a significant issue that, if not remediated, could place Noble Romans below industry best practices for financial governance and reporting integrity, which typically emphasize robust internal control environments to ensure accurate financial statements.

Corporate Governance

Stakeholder Impact

• Shareholders: May be concerned about the implications of an auditor change and the previously disclosed material weaknesses on the reliability of financial reporting and the Company's internal control environment.
• Investors: Will closely monitor the appointment of a new auditor and the Company's progress in remediating the identified material weaknesses, as these factors can influence investment decisions.
• Regulatory Authorities (SEC): Will continue to oversee the Company's compliance with reporting requirements, especially concerning the auditor change and the remediation of material weaknesses.

Next Steps

• The Board of Directors will continue evaluating alternative independent accountants to serve as the Company's auditor for the 2025 fiscal year.

Key Dates

Recommendation

Keywords

Noble Romans, SEC filing, 8-K, auditor change, Sassetti LLC, material weaknesses, financial reporting, corporate governance, accounting principles, internal controls