8-K: Noble Romans Appoints Sassetti LLC as New Independent Auditor, Replacing Assurance Dimensions

Noble Romans, Inc. has engaged Sassetti LLC as its new independent auditor, replacing Assurance Dimensions, effective for the fiscal year ending December 31, 2024.

Summary

• Noble Romans, Inc. has dismissed Assurance Dimensions as their independent auditor and engaged Sassetti LLC.
• The decision was made by the Board of Directors on August 27, 2024.
• Sassetti will audit the annual consolidated financial statements for the year ending December 31, 2024, and review the quarterly consolidated financial statements.
• Assurance Dimensions' report on the 2023 financials did not contain any adverse opinions or disclaimers.
• Sassetti has experience with similar companies and will have a partner on location in Indianapolis for much of the audit work.
• Sassetti provides audit services to more than 160 entities, representing nearly 40% of their revenue.
• The audit team will be led by Izabela Poludniak, CPA, who has 15 years of public accounting experience.

Sentiment

Score: 7

Explanation: The document is a routine announcement of an auditor change, which is generally neutral. The selection of a reputable firm like Sassetti is a positive, but the forward-looking statements include standard risk disclosures, which temper the overall sentiment.

Positives

• Sassetti has a strong track record, having been founded in 1921.
• Sassetti's location in Oak Brook, Illinois, allows for an onsite relationship with Noble Romans in Indianapolis.
• Sassetti has extensive experience with auditing companies similar to Noble Romans.
• The audit team assigned to Noble Romans has substantial experience working with public companies and multi-unit franchisors.
• Sassetti is a PCAOB firm and a member of the BDO Alliance USA, providing additional technical resources.

Risks

• The company's future results may differ materially from forward-looking statements due to various risks and uncertainties.
• These risks include the ongoing effects of the COVID-19 pandemic, the ability of franchisees to prepare for openings, and the company's ability to maintain adequate staffing.
• Other risks include competitive factors, pricing and cost pressures, non-renewal of franchise agreements, and shifts in market demand.
• The company also faces risks related to the success of franchise programs, remediation of material weaknesses in financial reporting controls, and general economic conditions.
• Activist stockholder activities could also adversely impact the company's business.

Future Outlook

The company's future performance is subject to various risks and uncertainties, including those related to the COVID-19 pandemic, franchise operations, and economic conditions. Actual results may differ materially from forward-looking statements.

Management Comments

• Noble Romans announced the engagement of Sassetti as its new independent auditor.
• Sassetti has a well-established pedigree and track record of excellence.
• Sassetti is committed to having a partner on location in Indianapolis for much of the audit work.

Industry Context

The change in auditors is a routine event for public companies. Sassetti's experience in the foodservice industry and with public companies makes them a suitable choice for Noble Romans. The announcement is not unusual in the context of the broader industry.

Comparison to Industry Standards

• The engagement of a new auditor is a common practice among public companies, and Noble Romans' decision to switch from Assurance Dimensions to Sassetti is not unusual.
• Many companies in the foodservice industry, such as Domino's Pizza (DPZ) and Papa John's (PZZA), regularly engage with auditing firms to ensure compliance and financial transparency.
• Sassetti's experience with over 160 entities and their focus on the foodservice sector aligns with industry standards for audit firms serving similar companies.
• The fact that Sassetti is a PCAOB firm and a member of the BDO Alliance USA also indicates that they meet the required professional standards for auditing public companies.

Stakeholder Impact

• Shareholders will likely view the change in auditors as a routine matter.
• The engagement of a reputable firm like Sassetti may increase investor confidence.
• Employees may not be directly impacted by this change.
• Franchisees and suppliers may not be directly impacted by this change.

Next Steps

• Sassetti will begin auditing the annual consolidated financial statements for the year ending December 31, 2024.
• Sassetti will also review the quarterly consolidated financial statements.

Key Dates

Keywords

auditor, Sassetti LLC, Assurance Dimensions, financial statements, audit, accounting, franchisor, Noble Romans