10-K/A: Noble Romans Reports Improved 2025 Net Income Amid Debt Refinancing

Noble Romans, Inc. has filed an amendment to its 2025 10-K, primarily to correct an auditor's report date, while also detailing a significant increase in net income and revenue, alongside ongoing efforts to manage its debt obligations.

Summary

• Noble Romans, Inc. filed an amendment to its 2025 10-K to correct the Report of Independent Registered Public Accounting Firm's date from May 29, 2026, to June 5, 2026.
• The company reported a net income of $1,173,224 for the year ended December 31, 2025, a substantial increase from a net loss of $3,174 in 2024.
• Total revenue grew to $16,461,459 in 2025 from $15,149,600 in 2024, driven by increases in both company-owned and franchising revenues.
• Operating income also saw a significant rise to $2,405,491 in 2025 from $1,475,038 in 2024.
• The company's total assets decreased from $16,769,247 in 2024 to $15,894,484 in 2025, while total liabilities decreased from $14,553,886 to $12,462,536.
• Significant debt obligations remain, with ongoing efforts to secure new financing to repay existing debt and warrants.
• The company has a deferred tax asset of $3,114,727 as of December 31, 2025, with no valuation allowance recorded.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as cautiously optimistic, reflecting a significant improvement in net income and revenue, but still burdened by substantial debt and ongoing refinancing efforts.

Positives

• Net income turned positive, reaching $1,173,224 in 2025, a significant improvement from a net loss in 2024.
• Total revenue increased by approximately 8.6% to $16,461,459 in 2025.
• Company-owned restaurant revenue increased to $8,771,389 in 2025 from $8,577,148 in 2024.
• Franchising revenue grew to $6,213,917 in 2025 from $5,540,968 in 2024.
• Operating income increased by over 63% to $2,405,491 in 2025.
• Total liabilities decreased by approximately $2.1 billion from 2024 to 2025.
• The company has no material uncertain tax positions requiring recognition or disclosure.

Negatives

• Total assets decreased from $16,769,247 in 2024 to $15,894,484 in 2025.
• The company has substantial debt obligations, including a Corbel loan and convertible notes.
• The fair value of warrant liability decreased but remains significant at $500,000 as of December 31, 2025.
• The company is actively seeking new financing to repay existing debt and warrants, indicating potential financial strain.
• Accumulated deficit remains substantial at $(21,479,193) as of December 31, 2025.

Risks

• The company is actively pursuing replacement financing to refinance its Corbel indebtedness, repay outstanding subordinated convertible notes, fund the repurchase and cancellation of Corbel warrants, and provide additional working capital, with the transaction still in progress.
• The maturity of the Corbel loan is June 30, 2026, requiring successful refinancing to avoid default.
• The fair value of warrant liability is subject to fluctuations based on market conditions and company performance.
• The company has a significant amount of net operating loss carryforwards ($13.4 million as of December 31, 2025), which may be subject to limitations under the Internal Revenue Code.
• The company is subject to ongoing examinations by taxing authorities for tax years 2022 through 2025.

Future Outlook

The company is actively seeking new financing to refinance its existing debt, including the Corbel loan and convertible notes, and to repurchase warrants. The success of these refinancing efforts is critical for the company's future financial stability.

Management Comments

• The company is working on a closing with one primary lender and three back-up lenders to obtain an approximate $7 million to $8 million senior loan to repay the current Senior Note, the subordinated convertible debentures and to purchase all outstanding warrants owned by Corbel.
• Management concluded that it is more likely than not that the deferred tax assets will be realized, and therefore no valuation allowance was recorded.
• Management considered the subsequent agreement with Corbel in evaluating the fair value of the warrant liability at December 31, 2025.

Industry Context

StockSavvy.ai notes that the restaurant industry, particularly the franchise segment, often faces challenges with debt management and capital structure optimization. Noble Romans' focus on refinancing and warrant repurchase is a common strategy to deleverage and simplify its capital structure in a competitive market.

Comparison to Industry Standards

• The company's revenue growth of 8.6% in 2025 is a positive indicator, though it needs to be compared against industry averages for casual dining and pizza franchises.
• The shift from a net loss to net income is a significant turnaround, but profitability metrics like net profit margin (approximately 7.1% in 2025) should be benchmarked against industry peers.
• The company's debt-to-equity ratio, while improving due to liability reduction, remains high, which is a common concern in the capital-intensive restaurant sector.
• The reliance on franchising revenue (40% of total revenue in 2025) aligns with industry trends where franchisors leverage franchisee capital for expansion.

Legal Proceedings

• Currently, there are no pending legal proceedings which the Company considers to be material.

Related Party Transactions

• Paul W. Mobley, Executive Chairman, purchased Notes and Warrants in a private placement on the same terms as unrelated investors.
• Paul W. Mobley and Herbst Capital Management, LLC extended the maturity of their Notes.
• Paul Mobley's Notes were repaid in conjunction with the February 2020 refinancing.
• Paul Mobley purchased a Note from Marcel Herbst in September 2022.
• Paul W. Mobley received 10% interest on his subordinated debt holdings in 2024.
• Paul Mobley agreed to pay the Company $50,000 for credit card back-up records, which was repaid in May 2025.
• As of December 31, 2025, Paul W. Mobley beneficially owned subordinated convertible notes with a principal balance of $300,000.
• During 2025, the Company paid approximately $27,500 of interest to Mr. Mobley on his subordinated convertible notes.

Stakeholder Impact

• Shareholders: Improved net income and EPS are positive, but the ongoing debt refinancing and substantial accumulated deficit present risks.
• Creditors: The company is actively seeking to refinance its debt, which could impact existing creditors depending on the terms of the new financing.
• Warrant Holders: The company plans to repurchase all outstanding warrants owned by Corbel, which would eliminate these instruments.
• Management: The focus on refinancing and financial restructuring indicates a period of significant management attention and potential risk.

Next Steps

• Secure new financing to repay the Corbel loan, subordinated convertible debentures, and repurchase Corbel warrants.
• Continue to monitor and manage deferred tax assets and net operating loss carryforwards.
• Address any potential examinations by taxing authorities for tax years 2022-2025.

Key Dates

Recommendation

The significant improvement in financial performance (net income, revenue, operating income) and the reduction in liabilities are positive. However, the substantial debt burden, the ongoing and critical need for refinancing, and the uncertainty surrounding the successful completion of these transactions warrant a cautious 'hold' rating. Investors should monitor the refinancing progress closely.

Keywords

Noble Romans, Franchising, Restaurant Revenue, Convertible Notes, Warrant Liability, Corbel Loan, Deferred Tax Asset, Employee Retention Credit