Noble Romans (NROM) 10-K22 Mar 222021 FY Annual reportFinancial data

Company Profile

Cover

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2021	Mar. 18, 2022	Jun. 30, 2021
Cover [Abstract]
Entity Registrant Name	NOBLE ROMAN’S, INC.
Entity Central Index Key	0000709005
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Dec. 31, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		22,215,512
Entity Public Float			$ 4.4
Document Annual Report	true
Entity File Number	0-11104
Entity Address State Or Province	IN
Entity Tax Identification Number	35-1281154
Entity Interactive Data Current	Yes
Icfr Auditor Attestation Flag	false
Document Transition Report	false
Entity Address Address Line 1	6612 E.
Entity Address Address Line 2	75th Street
Entity Address Address Line 3	Suite 450
City Area Code	317
Local Phone Number	634-3377
Entity Address City Or Town	Indianapolis
Entity Address Postal Zip Code	46250
Entity Incorporation State Country Code	IN
Auditor Name	Somerset CPA’s, P.C.
Auditor Location	Indianapolis, Indiana
Auditor Firm Id	752

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash	$ 1,263,513	$ 1,194,363
Accounts receivable - net	904,474	879,502
Inventories	994,085	890,556
Prepaid expenses	415,309	395,918
Total current assets	3,577,381	3,360,339
Property and equipment:
Equipment	4,216,246	3,708,689
Leasehold improvements	3,065,644	2,319,445
Construction and equipment in progress	235,051	510,225
Property Plant And Equipment Gross	7,516,941	6,538,359
Less accumulated depreciation and amortization	2,366,927	1,989,209
Net property and equipment	5,150,014	4,549,150
Deferred tax asset	3,232,406	3,104,904
Deferred contract costs	810,044	834,018
Goodwill	278,466	278,466
Operating lease right of use assets	6,003,044	6,088,101
Other assets including long-term portion of accounts receivable - net	324,402	201,962
Total assets	19,375,757	18,416,940
Current liabilities:
Accounts payable and accrued expenses	919,157	878,099
Current portion of operating lease liability	656,146	412,005
Total current liabilities	1,575,303	1,290,104
Long-term obligations:
Loan payable to Corbel	7,898,941	7,468,709
Corbel warrant value	29,037	29,037
Convertible notes payable	597,229	574,479
Operating lease liabilities - net of current portion	5,570,639	5,863,615
Deferred contract income	810,044	834,018
Total long-term liabilities	14,905,890	14,769,858
Stockholders' equity:
Common Stock - no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2020 and December 31, 2021)	24,791,568	24,763,447
Accumulated deficit	(21,897,004)	(22,406,469)
Total stockholders' equity	2,894,564	2,356,978
Total liabilities and stockholders' equity	$ 19,375,757	$ 18,416,940

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Consolidated Statements of Operations
Restaurant revenue - company-owned restaurants	$ 8,939,569	$ 6,209,279	$ 4,830,199
Restaurant revenue - company-owned non-traditional	485,595	470,846	673,647
Franchising revenue	4,444,826	4,841,229	6,162,576
Administrative fees and other	14,898	14,310	38,202
Total revenue	13,884,888	11,535,664	11,704,624
Operating expenses:
Restaurant expenses - company-owned restaurants	7,224,833	4,938,133	4,250,406
Restaurant expenses - company-owned non-traditional	466,469	447,040	626,453
Franchising expenses	1,810,363	1,736,870	2,092,001
Total operating expenses	9,501,665	7,122,043	6,968,860
Depreciation and amortization	848,913	382,368	382,793
General and administrative	1,790,722	1,717,209	1,739,383
Total expenses	12,141,300	9,221,620	9,091,036
Operating income	1,743,588	2,314,044	2,613,588
Interest expense	1,361,625	1,914,344	774,565
Adjust valuation of receivables	0	4,941,718	1,300,000
Net (loss) income before income taxes	381,963	(4,542,018)	539,023
Income tax expense (benefit)	(127,502)	839,928	917,088
Net (loss) income	$ 509,465	$ (5,381,946)	$ (378,065)
Income (loss) per share - basic:
Net income (loss)	$ 0.02	$ (0.24)	$ (0.02)
Weighted average number of common shares outstanding	22,215,512	22,215,512	22,052,859
Diluted income (loss) per share:
Net income (loss)	$ 0.02	$ (0.24)	$ (0.02)
Weighted average number of common shares outstanding	23,641,678	23,465,512	23,315,695

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Total	Common Stock	Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2018		21,783,131
Balance, amount at Dec. 31, 2018	$ 8,145,336	$ 24,739,482	$ (16,594,146)
Net loss	(378,065)		(378,065)
Adjustment for the adoption of ASU 2016-02 accounting for leases	(52,312)		(52,312)
Amortization of value of stock options	18,829	$ 18,829	0
Cashless exercise of warrants, shares		232,381
Cashless exercise of warrants, amount		$ 0
Conversion of convertible notes to Common Stock, shares		200,000
Conversion of convertible notes to Common Stock, amount	100,000	$ 100,000
Balance, shares at Dec. 31, 2019		22,215,512
Balance, amount at Dec 31, 2021 at Dec. 31, 2019	7,833,788	$ 24,858,311	(17,024,523)
Net loss	(5,381,946)		(5,381,946)
Amortization of value of stock options	21,536	21,536
Write-off unamortized closing to sub-debt that was converted	(116,400)	$ (116,400)
Balance, shares at Dec. 31, 2020		22,215,512
Balance, amount at Dec 31, 2021 at Dec. 31, 2020	2,356,978	$ 24,763,447	(22,406,469)
Net loss	509,465		509,465
Amortization of value of stock options	28,121	$ 28,121	0
Balance, shares at Dec. 31, 2021		22,215,512
Balance, amount at Dec 31, 2021 at Dec. 31, 2021	$ 2,894,564	$ 24,791,568	$ (21,897,004)

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
OPERATING ACTIVITIES
Net income (loss)	$ 509,465	$ (5,381,946)	$ (378,065)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization	1,330,017	1,433,295	469,804
Amortization of lease cost in excess of cash paid	36,223	46,994	134,545
Deferred income taxes	(127,502)	839,928	917,088
Increase (decrease) in:
Accounts receivable	(24,971)	(98,388)	(377,151)
Inventories	(103,530)	(9,896)	82,123
Prepaid expenses	(19,391)	189,884	(96,392)
Other assets including long-term portion of accounts receivable	(122,440)	4,508,836	548,648
Accounts payable and accrued expenses	41,058	147,040	207,745
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,518,929	1,675,747	1,508,345
INVESTING ACTIVITIES
Purchase of property and equipment	(1,449,779)	(2,084,710)	(289,351)
NET CASH USED BY INVESTING ACTIVITIES	(1,449,779)	(2,084,710)	(289,351)
FINANCING ACTIVITIES
Payment of principal on First Financial Bank loan	0	(4,379,024)	(998,271)
Payment of principal on convertible notes	0	(1,275,000)	0
Net proceeds from new financings net of closing costs	0	7,039,218	0
Lease liabilities	0	0	(78,785)
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES	0	1,385,194	(1,077,056)
Increase (decrease) in cash	69,150	976,231	141,938
Cash at beginning of year	1,194,363	218,132	76,194
Cash at end of year	$ 1,263,513	$ 1,194,363	$ 218,132

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Dec. 31, 2021
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note l: Summary of Significant Accounting Policies Organization: The Company, with two wholly-owned subsidiaries, sells and services franchises and licenses and operates Company-owned stand-alone restaurants and non-traditional foodservice operations under the trade names “Noble Roman’s Pizza”, “Noble Roman’s Craft Pizza & Pub” and “Tuscano’s Italian Style Subs”. Unless the context otherwise indicates, reference to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries. Principles of Consolidation: The consolidated financial statements include the accounts of Noble Roman’s, Inc. and its wholly-owned subsidiaries, RH Roanoke, Inc. and Pizzaco, Inc. Inter-company balances and transactions have been eliminated in consolidation. Inventories: Inventories consist of food, beverage, restaurant supplies, restaurant equipment and marketing materials and are stated at the lower of cost (first-in, first-out) or net realizable value. Property and Equipment: Equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives ranging from 5 years to 20 years. Leasehold improvements are amortized over the shorter of estimated useful life or the term of the lease including likely renewals. Construction and equipment in progress are stated at cost for leasehold improvements, equipment for a new restaurant being constructed and for pre-opening costs of any restaurant not yet open as of the date of the statements. Significant Accounting Policies: There have been no significant changes in the Company's accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020. Leases: The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets ("ROU"), and lease liability obligations are included in the Company's balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company's leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes in the lease payments made and excludes lease incentives and lease direct costs. The Company's lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company adopted the new standard to all material leases existing on January 1, 2019 and recognized a cumulative effect adjustment to the opening balance of accumulated deficit on that date. Cash and Cash Equivalents: Includes actual cash balance. The cash is not pledged nor are there any withdrawal restrictions. Advertising Costs: The Company records advertising costs consistent with the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) “Other Expense” topic and “Advertising Costs” subtopic. This statement requires the Company to expense advertising production costs the first time the production material is used. 29 Table of Contents Fair Value Measurements and Disclosures: The Fair Value Measurements and Disclosures topic of the FASB’s ASC requires companies to determine fair value based on the price that would be received to sell the assets or paid to transfer to liability to a market participant. The fair value measurements and disclosure topic emphasis that fair value is a market based measurement, not an entity specific measurement. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories: Level One: Quoted market prices in active markets for identical assets or liabilities. Level Two: Observable market–based inputs or unobservable inputs that are corroborated by market data. Level Three: Unobservable inputs that are not corroborated by market data. Use of Estimates: The preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. After a thorough review by management in 2018, the Company permanently wrote off $1.3 million and created an additional reserve for possible non-collection of $2.8 million. After a review in 2019 and also considering the impact of the COVID-19 pandemic, it was decided to add an additional reserve of $1.3 million for possible non-collections. In 2020, in light of the additional uncertainty created as a result of the COVID-19 pandemic, the Company decided to create a reserve for uncollectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional income at the time received. The Company evaluates its property and equipment and related costs periodically to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the recovery of recorded value. If any impairment of an individual asset is evident, a loss would be provided to reduce the carrying value to its estimated fair value. Debt Issuance Costs: Debt issuance cost is presented on the balance sheet as a direct reduction from the carrying amount of the associated liability. Debt issuance costs are amortized to interest expense ratably over the term of the applicable debt. The unamortized debt issuance cost at December 31, 2021 was $574,776. Intangible Assets: The Company recorded goodwill of $278,000 as a result of the acquisition of RH Roanoke, Inc.of certain assets of a former franchisee of the Company.Goodwill has an indeterminable life and is assessed for impairment at least annually and more frequently as triggering events may occur. In making this assessment, management relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data. Any impairment losses determined to exist are recorded in the period the determination is made. There are inherent uncertainties related to these factors and management’s judgment is involved in performing goodwill and other intangible assets valuation analysis, thus there is risk that the carrying value of goodwill and other intangible assets may be overstated or understated. The Company has elected to perform the annual impairment assessment of recorded goodwill as of the end of the Company’s fiscal year. The results of this annual impairment assessment indicated that the fair value of the reporting unit as of December 31, 2021, exceeded the carrying or book value, including goodwill, and therefore recorded goodwill was not subject to impairment. 30 Table of Contents Royalties, Administrative and Franchise Fees: Royalties are generally recognized as income monthly based on a percentage of monthly sales of franchised or licensed restaurants and from audits and other inspections as they come due and payable by the franchisee. Fees from the retail products in grocery stores are recognized monthly based on the distributors’ sale of those retail products to the grocery stores or grocery store distributors. Administrative fees are recognized as income monthly as earned. The Company adopted Accounting Standards Updated (“ASU”) 2014-09 effective January 2018 which did not materially affect the Company's recognition of royalties, fees from the sale of retail products in grocery stores, administrative fees or sales from Company-owned restaurants. However, initial franchise fees and related contract costs are now deferred and amortized on a straight-line basis over the term of the franchise agreements, generally five to ten years. The effect to comparable periods within the financial statements is not material as the initial franchise fee for the non-traditional franchise is intended to defray the initial contract cost, and the franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same periods. Exit or Disposal Activities Related to Discontinued Operations: The Company records exit or disposal activity for discontinued operations when management commits to an exit or disposal plan and includes those charges under results of discontinued operations, as required by the ASC “Exit or Disposal Cost Obligations” topic. Income Taxes: The Company provides for current and deferred income tax liabilities and assets utilizing an asset and liability approach along with a valuation allowance as appropriate. The Company evaluated its deferred tax assets in 2018 and determined that $1,422,960 of the deferred tax credits may expire in 2019 and 2020 before they are fully utilized, which increased the Company’s tax expense for 2018 and reduced the deferred tax credit on the balance sheet. The Company again evaluated its deferred tax assets in 2019 and determined that $1.7 million of its net operating loss carry-forward may expire before they are used resulting in an additional $400,000 in tax expense in 2019. In 2020, the Company again reviewed its deferred tax asset and determined that 2020 taxable income used up $267,528 and $572,400 deferred credits were expiring. U.S. generally accepted accounting principles require the Company to examine its tax positions for uncertain positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would not sustain an examination by applicable taxing authorities. The Company’s policy is to recognize penalties and interest as incurred in its Consolidated Statements of Operations. None were included for the years ended December 31, 2019, 2020 and 2021. The Company’s federal and various state income tax returns for 2018 through 2020 are subject to examination by the applicable tax authorities, generally for three years after the later of the original or extended due date. Basic and Diluted Net Income Per Share: Net income per share is based on the weighted average number of common shares outstanding during the respective year. When dilutive, stock options and warrants are included as share equivalents using the treasury stock method. 31 Table of Contents The following table sets forth the calculation of basic and diluted loss per share for the year ended December 31, 2019: Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (378,065 ) 22,052,859 $ (.02 ) Effect of dilutive securities Options - 12,836 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (316,105 ) 23,315,695 $ (.02 ) (1) Net loss per share is shown the same as basic loss per share because the underlying dilutive securities have an anti-dilutive effect. The following table sets forth the calculation of basic and diluted loss per share for the year ended December 31, 2020: Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (5,381,946 ) 22,215,512 $ (.24 ) Effect of dilutive securities Options - - Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (5,319,446 ) 23,465,512 $ (.24 ) (1) Net loss per share is shown the same as basic loss per share because the underlying dilutive securities have an anti-dilutive effect The following table sets forth the calculation of basic and diluted income per share for the year ended December 31, 2021: Income (Numerator) Shares (Denominator) Per Share Amount Net income per share - basic Net income $ 509,465 22,215,512 $ .02 Effect of dilutive securities Options - 176,166 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net income $ 571,965 23,641,678 $ .02 Subsequent Events: The Company evaluated subsequent events through the date the consolidated statements were issued and filed with the Annual Report on Form 10-K. No subsequent event required recognition or disclosure.

Accounts Receivable

Accounts Receivable	12 Months Ended
Accounts Receivable	Dec. 31, 2021
Accounts Receivable
Accounts Receivable	Note 2: Accounts Receivable At December 31, 2020 and 2021, the carrying value of the Company’s accounts receivable has been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its net receivables reflected on the Consolidated Balance Sheets as of December 31, 2020 and 2021 will be collected. Other assets, as of December 31, 2021, include security deposit and cash value of life insurance.

Notes Payable

Notes Payable	12 Months Ended
Notes Payable	Dec. 31, 2021
Notes Payable
Notes Payable	Note 3: Notes Payable On February 7, 2020, the Company entered into a Senior Secured Promissory Note and Warrant Purchase Agreement (the “Agreement”) with Corbel Capital Partners SBIC, L.P. (the “Purchaser”). Pursuant to the Agreement, the Company issued to the Purchaser a senior secured promissory note (the “Senior Note”) in the initial principal amount of $8.0 million. The Company has used the net proceeds of the Agreement as follows: (i) $4.2 million was used to repay the Company’s then-existing bank debt which was in the original amount of $6.1 million; (ii) $1,275,000 was used to repay the portion of the Company’s existing subordinated convertible debt the maturity date of which most had not previously been extended; (iii) debt issuance costs; and (iv) the remaining net proceeds were used for working capital or other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations. The Senior Note bears cash interest of LIBOR, as defined in the Agreement, plus 7.75%. In addition, the Senior Note requires payment-in-kind interest (“PIK Interest”) of 3% per annum, which is being added to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The Senior Note matures on February 7, 2025. The Senior Note does not require any fixed principal payments until February 28, 2023, at which time required monthly payments of principal in the amount of $33,333 begin and continue until maturity. The Senior Note requires the Company to make additional payments on the principal balance of the Senior Note based on its consolidated excess cash flow, as defined in the Agreement. In conjunction with the borrowing under the Senior Note, the Company issued to the Purchaser a warrant (the “Corbel Warrant”) to purchase up to 2,250,000 shares of Common Stock. The Corbel Warrant entitles the Purchaser to purchase from the Company, at any time or from time to time: (i) 1,200,000 shares of Common Stock at an exercise price of $0.57 per share (“Tranche 1”), (ii) 900,000 shares of Common Stock at an exercise price of $0.72 per share (“Tranche 2”), and (iii) 150,000 shares of Common Stock at an exercise price of $0.97 per share (“Tranche 3”). The Purchaser is required to exercise the Corbel Warrant with respect to Tranche 1 if the Common Stock is trading at $1.40 per share or higher for a specified period, and is further required to exercise the Corbel Warrant with respect to Tranche 2 if the Common Stock is trading at $1.50 per share or higher for a specified period. Cashless exercise of the Corbel Warrant is only permitted with respect to Tranche 3. The Purchaser has the right, within six months after the issuance of any shares under the Corbel Warrant, to require the Company to repurchase such shares for cash or for Put Notes, at the Company's discretion. The Corbel Warrant expires on the sixth anniversary of the date of its issuance. 33 Table of Contents At December 31, 2021, the balance of the Senior Note was comprised of: Principal Due $ 8,474,985 Unamortized Loan Closing Cost 547,007 Carrying Value $ 7,927,978 In the fourth quarter of 2016, the Company issued 32 Units, for a purchase price of $50,000 per Unit, or $1,600,000 in the aggregate and, in January 2017, the Company issued another 16 Units, or an additional $800,000 in the aggregate. Each $50,000 Unit consisted of a convertible, subordinated, unsecured promissory note (the “Notes”) in an aggregate principal amount of $50,000 and warrants (the “Warrants”) to purchase up to 50,000 shares of the Company’s Common Stock, no par value per share. The Company issued Units to investors including the following related parties: Paul W. Mobley, the Company’s Executive Chairman, Chief Financial Officer and a director of the Company ($150,000); and Herbst Capital Management, LLC, the principal of which is Marcel Herbst, a director of the Company ($200,000). Interest on the Notes accrued at the annual rate of 10% and is payable quarterly in arrears. Initially, the Notes matured, and the Warrants expired, three years after issuance. However, in December 2018, the Company offered to extend the maturity of the Notes and the expiration date of the Warrants to January 2023. Certain of the holders of the Notes and Warrants accepted the Company’s offer. Accordingly, of the principal amount of the Notes, holders of $775,000 in principal amount extended their Notes until January 31, 2023. In 2018 and 2019, holders of $500,000 in principal amount of the Notes converted those Notes to 1,000,000 shares of the Company’s Common Stock in accordance with the terms of the Note. In February 2020, in conjunction with the Company’s refinancing of its debt, $1,275,000 in principal amount of those Notes was repaid leaving a balance of $625,000 which mature on January 31, 2023. The holders of the remaining $625,000 principal amount of Notes can elect, at their option any time prior to maturity, convert those Notes to Common Stock in accordance with the terms of the Notes. The Warrants issued with the Notes provide for an exercise price of $1.00 per share of Common Stock (subject to anti-dilution adjustments). As a result of the February 7, 2020 financing with Corbel, the Warrants adjusted to $0.57 per share. All warrants were canceled with the repayment of the Notes except Warrants issued with $775,000 principal amount of Notes that were extended to the new maturity of January 31, 2023. Subject to certain limitations, the Company may redeem the outstanding Warrants at a price of $0.001 per share of Common Stock subject to the Warrant upon 30 days’ notice if the daily average weighted trading price of the Common Stock equals or exceeds $2.00 per share for a period of 30 consecutive trading days. Placement agent fees and other origination costs of the Notes are deducted from the carrying value of the Notes as original issue discount (“OID”). The OID is being amortized over the term of the Notes. At December 31, 2021, the balance of the Notes is comprised of: Face Value $ 625,000 Unamortized OID 27,771 Carrying Value $ 597,229 Total cash and non-cash interest accrued on the Company’s indebtedness in 2021 was $1.36 million and in 2020 was $1.9 million. 34 Table of Contents

Royalties and Fees

Royalties and Fees	12 Months Ended
Royalties and Fees	Dec. 31, 2021
Royalties and Fees
Royalties and Fees	Note 4: Royalties and Fees Approximately $307,000, $198,000 and $204,000 are included in 2019, 2020 and 2021, respectively, royalties and fees in the Consolidated Statements of Operations for amortized initial franchise fees. Also included in royalties and fees were approximately $70,000, $45,000 and $32,000 in 2019, 2020 and 2021, respectively, for equipment commissions. Most of the cost for the services required to be performed by the Company are incurred prior to the franchise fee income being recorded which is based on contractual liability for the franchisee. Such incremental costs, include training, design and related travel cost to new franchises. The deferred contract income and costs approximated $834,000 on December 31, 2020 and $810,000 on December 31, 2021. In conjunction with the development of Noble Roman’s Pizza and Tuscano’s Italian Style Subs, the Company has devised its own recipes for many of the ingredients that go into the making of its products (“Proprietary Products”). The Company contracts with various manufacturers to manufacture its Proprietary Products in accordance with the Company’s recipes and formulas and to sell those products to authorized distributors at a contract price which includes an allowance for use of the Company’s recipes. The manufacturing contracts also require the manufacturers to hold those allowances in trust and to remit those allowances to the Company on a periodic basis, usually monthly. The Company recognizes those allowances in revenue as earned based on sales reports from the distributors. There were 3,069 franchised/licensed or Company-owned outlets in operation on December 31, 2021 and 3,064 on December 31, 2020. During 2021, 24 new franchised/licensed were opened and 19 franchised outlets left the system. Grocery stores are accustomed to adding products for a period of time, removing them for a period of time and possibly re-offering them. Therefore, it is unknown how many grocery store licenses, out of the total count of 2,403, have left the system.

Liabilities for Leased Faciliti

Liabilities for Leased Facilities	12 Months Ended
Liabilities for Leased Facilities	Dec. 31, 2021
Liabilities for Leased Facilities
Liabilities for Leased Facilities	Note 5: Liabilities for Leased Facilities The Company has future obligations of $15.37 million under long-term debt and current operating leases as follows: due in less than one year $656,000, due in one to three years $4.13 million, due in three to five years $9.13 million and due in more than five years $1.5 million. To implement the new accounting policies for leases, the Company used a weighted average discount rate of 7% and the weighted average lease term of 7.3 years. The Company recorded $36,222 more in lease expense than cash actually paid in 2021 for the leases.

Income Taxes

Income Taxes	12 Months Ended
Income Taxes	Dec. 31, 2021
Income Taxes
Income Taxes	Note 6: Income Taxes The Company had deferred tax assets, as a result of prior operating losses, of $3.1 million at December 31, 2020 and $3.2 million at December 31, 2021. The net operating loss carry-forward is approximately $12.0 million so the Company will have no obligation to pay income tax on income up to the amount of that operating loss carry-forward, prior to its expiration.

Common Stock

Common Stock	12 Months Ended
Common Stock	Dec. 31, 2021
Common Stock
Common Stock	Note 7: Common Stock Outstanding are $625,000 principal amount of Notes convertible into Common Stock at $0.50 per share and warrants to purchase 775,000 shares with an exercise price of $0.57 per share which expires in February 2023. The Company issued to the Purchaser the Corbel Warrant to purchase up to 2,250,000 shares of Common Stock, as described in Note 3 of these notes to the Company’s consolidated financial statements. 35 Table of Contents The Company has an incentive stock option plan for key employees, officers and directors. The options are generally exercisable three years after the date of grant and expire ten years after the date of grant. The option prices are the fair market value of the stock at the date of grant. At December 31, 2021, the Company had the following employee stock options outstanding: # Common Shares Issuable Exercise Price 1,756,167 $ 0.58 727,500 1.00 280,000 0.53 35,000 0.50 372,500 0.51 332,500 0.623 474,500 0.60 413,500 0.40 463,500 0.70 As of December 31, 2021, options for 3,813,667 shares were exercisable. The Company adopted the modified prospective method to account for stock option grants, which does not require restatement of prior periods. Under the modified prospective method, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption, net of an estimate of expected forfeitures. Compensation expense is based on the estimated fair values of stock options determined on the date of grant and is recognized over the related vesting period, net of an estimate of expected forfeitures which is based on historical forfeitures. The Company estimates the fair value of its option awards on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based on external data while all other assumptions are determined based on the Company’s historical experience with stock options. The following assumptions were used for grants in 2019, 2020 and 2021: Expected volatility 20% Expected dividend yield None Expected term (in years) 3 Risk-free interest rate 1.68 to 2.82% 36 Table of Contents The following table sets forth the number of options outstanding as of December 31, 2018, 2019, 2020 and 2021 and the number of options granted, exercised or forfeited during the years ended December 31, 2019, 2020 and 2021: Balance of employee stock options outstanding as of 12/31/18 3,643,667 Stock options granted during the year ended 12/31/19 529,500 Stock options exercised during the year ended 12/31/19 0 Stock options forfeited during the year ended 12/31/19 (195,000 ) Balance of employee stock options outstanding as of 12/31/19 3,978,167 Stock options granted during the year ended 12/31/20 443,500 Stock options exercised during the year ended 12/31/20 0 Stock options forfeited during the year ended 12/31/20 0 Balance of employee stock options outstanding as of 12/31/20 4,421,667 Stock options granted during the year ended 12/31/21 463,500 Stock options exercised during the year ended 12/31/21 0 Stock options forfeited during the year ended 12/31/21 (30,000 ) Balance of employee stock options outstanding as of 12/31/21 4,855,167 The following table sets forth the number of non-vested options outstanding as of December 31, 2018, 2019, 2020 and 2021, and the number of stock options granted, vested and forfeited during the years ended December 31, 2019, 2020 and 2021. Balance of employee non-vested stock options outstanding as of 12/31/18 721,836 Stock options granted during the year ended 12/31/19 529,500 Stock options vested during the year ended 12/31/19 (325,000 ) Stock options forfeited during the year ended 12/31/19 (195,000 ) Balance of employee non-vested stock options outstanding as of 12/31/19 731,336 Stock options granted during the year ended 12/31/20 443,500 Stock options vested during the year ended 12/31/20 (212,500 ) Stock options forfeited during the year ended 12/31/20 0 Balance of employee non-vested stock options outstanding as of 12/31/20 962,336 Stock options granted during the year ended 12/31/21 463,500 Stock options vested during the year ended 12/31/21 (354,336 ) Stock options forfeited during the year ended 12/31/21 (30,000 ) Balance of employee non-vested stock options outstanding as of 12/31/21 1,041,500 During 2021, employee stock options were granted for 463,500 shares and options for 30,000 shares were forfeited. At December 31, 2021, the weighted average grant date fair value of non-vested options was $0.58 per share and the weighted average grant date fair value of vested options was $0.66 per share. The weighted average grant date fair value of employee stock options granted during 2019 was $0.66, during 2020 was $0.40 and during 2021 was $0.70. Total compensation cost recognized for share-based payment arrangements was $18,829 in 2019 with a tax benefit of $4,995 in 2019, $21,536 in 2020 with a tax benefit of $5,168 and $28,119 in 2021 with a tax benefit of $6,861. As of December 31, 2021, total unamortized compensation cost related to options was $50,941, which will be recognized as compensation cost over the next six to 36 months. No cash was used to settle equity instruments under share-based payment arrangements.

Statements of Financial Account

Statements of Financial Accounting Standards	12 Months Ended
Statements of Financial Accounting Standards	Dec. 31, 2021
Statements of Financial Accounting Standards
Statements of Financial Accounting Standards	Note 8: Statements of Financial Accounting Standards The Company does not believe that the recently issued Statements of Financial Accounting Standards will have any material impact on the Company’s Consolidated Statements of Operations or its Consolidated Balance Sheets. On February 25, 2016, the ASU2016-02, its leasing standard for both lessees and lessors. Under its core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer than 12 months. The new standard took effect in 2019 for public business entities and, therefore, is included in the current financial statements. This had the effect of increasing the value of the assets and liabilities of the Company and incurred an additional expense for rent on the Consolidated Statement of Operations by $36,222 in 2021.

Contingencies

Contingencies	12 Months Ended
Contingencies	Dec. 31, 2021
Contingencies
Contingencies	Note 9: Contingencies The Company, from time to time, is or may become involved in litigation or regulatory proceedings arising out of its normal business operations. Currently, there are no such pending proceedings which the Company considers to be material.

Certain Relationships and Relat

Certain Relationships and Related Transactions	12 Months Ended
Certain Relationships and Related Transactions	Dec. 31, 2021
Certain Relationships and Related Transactions
Certain Relationships and Related Transactions	Note 10: Certain Relationships and Related Transactions The following is a summary of transactions to which the Company and certain officers and directors of the Company are a party or have a financial interest. The Board of Directors of the Company has adopted a policy that all transactions between the Company and its officers, directors, principal shareholders and other affiliates must be approved by a majority of the Company’s disinterested directors, and be conducted on terms no less favorable to the Company than could be obtained from unaffiliated third parties. Of the 48 Units sold in the private placement which began in October 2016, three Units were purchased by Paul W. Mobley, Executive Chairman,and four Units were purchased by Marcel Herbst, Director. Each Unit consists of a Note in the principal amount of $50,000 and a Warrant to purchase 50,000 shares of the Company’s Common Stock. These transactions were all completed on the same terms and conditions as all of the independent investors who purchased the other 41Units. The Notes, at the time of issue, were to mature three years after issue date. In late 2018, the Company sent an offer to each remaining Note holder offering to extend the maturity of the Notes to January 31, 2023. Holders of $775,000 in principal amount of the Notes accepted that offer of extension including the Notes held by Paul W. Mobley and Herbst Capital Management, LLC. In conjunction with the refinancing of the Company in February 2020, Notes held by Paul Mobley were included in the $1,275,000 in principal amount of Notes that were repaid out of the proceeds of the new financing.

Unaudited Quarterly Financial I

Unaudited Quarterly Financial Information	12 Months Ended
Unaudited Quarterly Financial Information	Dec. 31, 2021
Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information	Note 11: Unaudited Quarterly Financial Information 2021 Quarter Ended December 31 September 30 June 30 March 31 (in thousands, except per share data) Total revenue $ 3,594 $ 3,424 $ 3,585 $ 3,282 Operating income (106 ) 264 424 1,162 Net income (loss) before income taxes (451 ) (79 ) 85 827 Net income (loss) (324 ) (79 ) 85 827 Net income (loss) per common share Basic (.01 ) 0 0 .04 Diluted (.01 ) 0 0 .04 2020 Quarter Ended December 31 September 30 June 30 March 31 (in thousands, except per share data) Total revenue $ 3,268 $ 2,938 $ 2,610 $ 2,719 Operating income 295 411 1,019 589 Net income (loss)before income taxes (4,984 ) 83 696 (337 ) Net income (loss) (5,906 ) 83 696 (255 ) Net income (loss) per common share Basic (.26 ) .00 .03 (.01 ) Diluted (.26 ) .00 .03 (.01 )

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2021
Summary of Significant Accounting Policies
Leases	Leases: The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets ("ROU"), and lease liability obligations are included in the Company's balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company's leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes in the lease payments made and excludes lease incentives and lease direct costs. The Company's lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company adopted the new standard to all material leases existing on January 1, 2019 and recognized a cumulative effect adjustment to the opening balance of accumulated deficit on that date.
Organization	Organization: The Company, with two wholly-owned subsidiaries, sells and services franchises and licenses and operates Company-owned stand-alone restaurants and non-traditional foodservice operations under the trade names “Noble Roman’s Pizza”, “Noble Roman’s Craft Pizza & Pub” and “Tuscano’s Italian Style Subs”. Unless the context otherwise indicates, reference to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries.
Principles of Consolidation	Principles of Consolidation: The consolidated financial statements include the accounts of Noble Roman’s, Inc. and its wholly-owned subsidiaries, RH Roanoke, Inc. and Pizzaco, Inc. Inter-company balances and transactions have been eliminated in consolidation.
Inventories	Inventories: Inventories consist of food, beverage, restaurant supplies, restaurant equipment and marketing materials and are stated at the lower of cost (first-in, first-out) or net realizable value.
Property and Equipment	Property and Equipment: Equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives ranging from 5 years to 20 years. Leasehold improvements are amortized over the shorter of estimated useful life or the term of the lease including likely renewals. Construction and equipment in progress are stated at cost for leasehold improvements, equipment for a new restaurant being constructed and for pre-opening costs of any restaurant not yet open as of the date of the statements.
Significant Accounting Policies	Significant Accounting Policies: There have been no significant changes in the Company's accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020.
Cash and Cash Equivalents	Cash and Cash Equivalents: Includes actual cash balance. The cash is not pledged nor are there any withdrawal restrictions.
Advertising Costs	Advertising Costs: The Company records advertising costs consistent with the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) “Other Expense” topic and “Advertising Costs” subtopic. This statement requires the Company to expense advertising production costs the first time the production material is used.
Fair Value Measurements and Disclosures	Fair Value Measurements and Disclosures: The Fair Value Measurements and Disclosures topic of the FASB’s ASC requires companies to determine fair value based on the price that would be received to sell the assets or paid to transfer to liability to a market participant. The fair value measurements and disclosure topic emphasis that fair value is a market based measurement, not an entity specific measurement. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories: Level One: Quoted market prices in active markets for identical assets or liabilities. Level Two: Observable market–based inputs or unobservable inputs that are corroborated by market data. Level Three: Unobservable inputs that are not corroborated by market data.
Use of Estimates	Use of Estimates: The preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. After a thorough review by management in 2018, the Company permanently wrote off $1.3 million and created an additional reserve for possible non-collection of $2.8 million. After a review in 2019 and also considering the impact of the COVID-19 pandemic, it was decided to add an additional reserve of $1.3 million for possible non-collections. In 2020, in light of the additional uncertainty created as a result of the COVID-19 pandemic, the Company decided to create a reserve for uncollectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional income at the time received. The Company evaluates its property and equipment and related costs periodically to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the recovery of recorded value. If any impairment of an individual asset is evident, a loss would be provided to reduce the carrying value to its estimated fair value.
Debt Issuance Costs	Debt Issuance Costs: Debt issuance cost is presented on the balance sheet as a direct reduction from the carrying amount of the associated liability. Debt issuance costs are amortized to interest expense ratably over the term of the applicable debt. The unamortized debt issuance cost at December 31, 2021 was $574,776.
Intangible Assets	Intangible Assets: The Company recorded goodwill of $278,000 as a result of the acquisition of RH Roanoke, Inc.of certain assets of a former franchisee of the Company.Goodwill has an indeterminable life and is assessed for impairment at least annually and more frequently as triggering events may occur. In making this assessment, management relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data. Any impairment losses determined to exist are recorded in the period the determination is made. There are inherent uncertainties related to these factors and management’s judgment is involved in performing goodwill and other intangible assets valuation analysis, thus there is risk that the carrying value of goodwill and other intangible assets may be overstated or understated. The Company has elected to perform the annual impairment assessment of recorded goodwill as of the end of the Company’s fiscal year. The results of this annual impairment assessment indicated that the fair value of the reporting unit as of December 31, 2021, exceeded the carrying or book value, including goodwill, and therefore recorded goodwill was not subject to impairment.
Royalties, Administrative and Franchise Fees	Royalties, Administrative and Franchise Fees: Royalties are generally recognized as income monthly based on a percentage of monthly sales of franchised or licensed restaurants and from audits and other inspections as they come due and payable by the franchisee. Fees from the retail products in grocery stores are recognized monthly based on the distributors’ sale of those retail products to the grocery stores or grocery store distributors. Administrative fees are recognized as income monthly as earned. The Company adopted Accounting Standards Updated (“ASU”) 2014-09 effective January 2018 which did not materially affect the Company's recognition of royalties, fees from the sale of retail products in grocery stores, administrative fees or sales from Company-owned restaurants. However, initial franchise fees and related contract costs are now deferred and amortized on a straight-line basis over the term of the franchise agreements, generally five to ten years. The effect to comparable periods within the financial statements is not material as the initial franchise fee for the non-traditional franchise is intended to defray the initial contract cost, and the franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same periods.
Exit or Disposal Activities Related to Discontinued Operations	Exit or Disposal Activities Related to Discontinued Operations: The Company records exit or disposal activity for discontinued operations when management commits to an exit or disposal plan and includes those charges under results of discontinued operations, as required by the ASC “Exit or Disposal Cost Obligations” topic.
Income Taxes	Income Taxes: The Company provides for current and deferred income tax liabilities and assets utilizing an asset and liability approach along with a valuation allowance as appropriate. The Company evaluated its deferred tax assets in 2018 and determined that $1,422,960 of the deferred tax credits may expire in 2019 and 2020 before they are fully utilized, which increased the Company’s tax expense for 2018 and reduced the deferred tax credit on the balance sheet. The Company again evaluated its deferred tax assets in 2019 and determined that $1.7 million of its net operating loss carry-forward may expire before they are used resulting in an additional $400,000 in tax expense in 2019. In 2020, the Company again reviewed its deferred tax asset and determined that 2020 taxable income used up $267,528 and $572,400 deferred credits were expiring. U.S. generally accepted accounting principles require the Company to examine its tax positions for uncertain positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would not sustain an examination by applicable taxing authorities. The Company’s policy is to recognize penalties and interest as incurred in its Consolidated Statements of Operations. None were included for the years ended December 31, 2019, 2020 and 2021. The Company’s federal and various state income tax returns for 2018 through 2020 are subject to examination by the applicable tax authorities, generally for three years after the later of the original or extended due date.
Basic and Diluted Net Income Per Share	Basic and Diluted Net Income Per Share: Net income per share is based on the weighted average number of common shares outstanding during the respective year. When dilutive, stock options and warrants are included as share equivalents using the treasury stock method. 31 Table of Contents The following table sets forth the calculation of basic and diluted loss per share for the year ended December 31, 2019: Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (378,065 ) 22,052,859 $ (.02 ) Effect of dilutive securities Options - 12,836 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (316,105 ) 23,315,695 $ (.02 ) (1) Net loss per share is shown the same as basic loss per share because the underlying dilutive securities have an anti-dilutive effect. The following table sets forth the calculation of basic and diluted loss per share for the year ended December 31, 2020: Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (5,381,946 ) 22,215,512 $ (.24 ) Effect of dilutive securities Options - - Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (5,319,446 ) 23,465,512 $ (.24 ) (1) Net loss per share is shown the same as basic loss per share because the underlying dilutive securities have an anti-dilutive effect The following table sets forth the calculation of basic and diluted income per share for the year ended December 31, 2021: Income (Numerator) Shares (Denominator) Per Share Amount Net income per share - basic Net income $ 509,465 22,215,512 $ .02 Effect of dilutive securities Options - 176,166 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net income $ 571,965 23,641,678 $ .02
Subsequent Events	Subsequent Events: The Company evaluated subsequent events through the date the consolidated statements were issued and filed with the Annual Report on Form 10-K. No subsequent event required recognition or disclosure.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
Summary of Significant Accounting Policies (Tables)	Dec. 31, 2021
Summary of Significant Accounting Policies
Basic and diluted earnings per share	Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (378,065 ) 22,052,859 $ (.02 ) Effect of dilutive securities Options - 12,836 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (316,105 ) 23,315,695 $ (.02 ) Income (Numerator) Shares (Denominator) Per Share Amount Net loss per share - basic Net loss $ (5,381,946 ) 22,215,512 $ (.24 ) Effect of dilutive securities Options - - Convertible Notes 62,500 1,250,000 Diluted net loss per share Net loss (1) $ (5,319,446 ) 23,465,512 $ (.24 ) Income (Numerator) Shares (Denominator) Per Share Amount Net income per share - basic Net income $ 509,465 22,215,512 $ .02 Effect of dilutive securities Options - 176,166 Convertible Notes 62,500 1,250,000 Diluted net loss per share Net income $ 571,965 23,641,678 $ .02

Notes Payable (Tables)

Notes Payable (Tables)	12 Months Ended
Notes Payable (Tables)	Dec. 31, 2021
Notes Payable
Credit facility	Principal Due $ 8,474,985 Unamortized Loan Closing Cost 547,007 Carrying Value $ 7,927,978
Notes payable	Face Value $ 625,000 Unamortized OID 27,771 Carrying Value $ 597,229

Common Stock (Tables)

Common Stock (Tables)	12 Months Ended
Common Stock (Tables)	Dec. 31, 2021
Common Stock
Employee stock options outstanding	# Common Shares Issuable Exercise Price 1,756,167 $ 0.58 727,500 1.00 280,000 0.53 35,000 0.50 372,500 0.51 332,500 0.623 474,500 0.60 413,500 0.40 463,500 0.70
Assumptions for grants	Expected volatility 20% Expected dividend yield None Expected term (in years) 3 Risk-free interest rate 1.68 to 2.82%
Options outstanding	Balance of employee stock options outstanding as of 12/31/18 3,643,667 Stock options granted during the year ended 12/31/19 529,500 Stock options exercised during the year ended 12/31/19 0 Stock options forfeited during the year ended 12/31/19 (195,000 ) Balance of employee stock options outstanding as of 12/31/19 3,978,167 Stock options granted during the year ended 12/31/20 443,500 Stock options exercised during the year ended 12/31/20 0 Stock options forfeited during the year ended 12/31/20 0 Balance of employee stock options outstanding as of 12/31/20 4,421,667 Stock options granted during the year ended 12/31/21 463,500 Stock options exercised during the year ended 12/31/21 0 Stock options forfeited during the year ended 12/31/21 (30,000 ) Balance of employee stock options outstanding as of 12/31/21 4,855,167
Number of non-vested options outstanding	Balance of employee non-vested stock options outstanding as of 12/31/18 721,836 Stock options granted during the year ended 12/31/19 529,500 Stock options vested during the year ended 12/31/19 (325,000 ) Stock options forfeited during the year ended 12/31/19 (195,000 ) Balance of employee non-vested stock options outstanding as of 12/31/19 731,336 Stock options granted during the year ended 12/31/20 443,500 Stock options vested during the year ended 12/31/20 (212,500 ) Stock options forfeited during the year ended 12/31/20 0 Balance of employee non-vested stock options outstanding as of 12/31/20 962,336 Stock options granted during the year ended 12/31/21 463,500 Stock options vested during the year ended 12/31/21 (354,336 ) Stock options forfeited during the year ended 12/31/21 (30,000 ) Balance of employee non-vested stock options outstanding as of 12/31/21 1,041,500

Unaudited Quarterly Financial_2

Unaudited Quarterly Financial Information (Tables)	12 Months Ended
Unaudited Quarterly Financial Information (Tables)	Dec. 31, 2021
Unaudited Quarterly Financial Information
Unaudited quarterly financial information	2021 Quarter Ended December 31 September 30 June 30 March 31 (in thousands, except per share data) Total revenue $ 3,594 $ 3,424 $ 3,585 $ 3,282 Operating income (106 ) 264 424 1,162 Net income (loss) before income taxes (451 ) (79 ) 85 827 Net income (loss) (324 ) (79 ) 85 827 Net income (loss) per common share Basic (.01 ) 0 0 .04 Diluted (.01 ) 0 0 .04 2020 Quarter Ended December 31 September 30 June 30 March 31 (in thousands, except per share data) Total revenue $ 3,268 $ 2,938 $ 2,610 $ 2,719 Operating income 295 411 1,019 589 Net income (loss)before income taxes (4,984 ) 83 696 (337 ) Net income (loss) (5,906 ) 83 696 (255 ) Net income (loss) per common share Basic (.26 ) .00 .03 (.01 ) Diluted (.26 ) .00 .03 (.01 )

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net income (loss)	$ (324)	$ (79,000)	$ 85,000	$ 827,000	$ (5,906,000)	$ 83,000	$ 696,000	$ (255,000)	$ 509,465	$ (5,381,946)	$ (378,065)
Weighted average number of common shares outstanding, basic									22,215,512	22,215,512	22,052,859
Earnings per share, basic	$ (0.01)	$ 0	$ 0	$ 0.04	$ (0.26)	$ 0	$ 0.03	$ (0.01)	$ 0.02	$ (0.24)	$ (0.02)
Net loss per share with assumed conversions									$ 571,965	$ (5,319,446)	$ (316,105)
Weighted average number of common shares outstanding, diluted									23,641,678	23,465,512	23,315,695
Earnings per share, diluted	$ (0.01)	$ 0	$ 0	$ 0.04	$ (0.26)	$ 0	$ 0.03	$ (0.01)	$ 0.02	$ (0.24)	$ (0.02)
Options
Effect of dilutive securities									$ 0	$ 0	$ 0
Effect of dilutive securities, shares									176,166		12,836
Convertible Notes
Effect of dilutive securities									$ 62,500	$ 62,500	$ 62,500
Effect of dilutive securities, shares									1,250,000	1,250,000	1,250,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Permanently wrote off	$ 1,300,000
Additional reserve for non-collection	2,800,000
Additional reserve	1,300,000
Deferred tax credits	1,422,960	$ 572,400	$ 1,422,960
Net operating loss carry-forward			1,700,000
Additional tax expense		267,528	$ 400,000
Unamortized debt issuance cost	574,776
Goodwill	278,466	$ 278,466
RH Roanoke, Inc
Goodwill	$ 278,000
Minimum
Property and equipment estimated useful life	5 years
Maximum
Property and equipment estimated useful life	20 years

Notes Payable (Details)

Notes Payable (Details)	Dec. 31, 2021USD ($)
Notes Payable
Principal due	$ 8,474,985
Unamortized loan closing cost	(547,007)
Carrying value	$ 7,927,978

Notes Payable (Details 1)

Notes Payable (Details 1)	Dec. 31, 2021USD ($)
Notes Payable
Face value	$ 625,000
Unamortized OID	(50,521)
Carrying value	$ 597,229

Note payable (Details Narrative

Note payable (Details Narrative)	Feb. 07, 2020USD ($)$ / sharesshares	Dec. 31, 2021USD ($)$ / sharesshares	Dec. 31, 2016USD ($)integer	Dec. 31, 2020USD ($)	Jan. 31, 2017USD ($)integer
Exercise price \| $ / shares		$ 0.57
Description of warrant price	Warrants at a price of $0.001 per share of Common Stock subject to the Warrant upon 30 days’ notice if the daily average weighted trading price of the Common Stock equals or exceeds $2.00 per share for a period of 30 consecutive trading days.
Interest on Notes accrued description		the Company offered to extend the maturity of the Notes and the expiration date of the Warrants to January 2023. Certain of the holders of the Notes and Warrants accepted the Company’s offer. Accordingly, of the principal amount of the Notes, holders of $775,000 in principal amount extended their Notes until January 31, 2023. In 2018 and 2019, holders of $500,000 in principal amount of the Notes converted those Notes to 1,000,000 shares of the Company’s Common Stock in accordance with the terms of the Note. In February 2020, in conjunction with the Company’s refinancing of its debt, $1,275,000 in principal amount of those Notes was repaid leaving a balance of $625,000 which mature on January 31, 2023. The holders of the remaining $625,000 principal amount of Notes can elect, at their option any time prior to maturity, convert those Notes to Common Stock in accordance with the terms of the Notes.
Annual interest rate		10.00%
Interest accrued		$ 1,360,000		$ 1,900,000
Number of issued units \| integer			32		16
Purchase price shares			$ 50,000		$ 800,000
Aggregate shares of note payable			$ 1,600,000
Unsecured promissory note		$ 50,000
Warrant purchase shares \| shares		50,000
Aggregate principal amount of note payable		$ 50,000
Purchase shares of common stock \| shares		2,250,000
Note payable principle amount		$ 597,229		$ 574,479
Maturity date		February 2023
Paul Mobley
Aggregate principal amount of note payable		$ 200,000
Holders
Aggregate principal amount of note payable		$ 150,000
Note Warrant
Exercise price \| $ / shares	$ 0.57
Note payable principle amount	$ 775,000
Maturity date	January 31, 2023
Tranche 1
Exercise price \| $ / shares	$ 0.57
Purchase shares of common stock \| shares	1,200,000
Tranche 2
Exercise price \| $ / shares	$ 0.72
Purchase shares of common stock \| shares	900,000
Trading price per share \| $ / shares	$ 1.50
Tranche 3
Exercise price \| $ / shares	$ 0.97
Purchase shares of common stock \| shares	150,000
Secured Promissory Note [Member]
Purchase shares of common stock \| shares	2,250,000
Note payable principle amount	$ 33,333
Bank loan	8,000,000
Repay bank debt	4,200,000
Original amount	6,100,000
Convertible debt	$ 1,275,000
Interest rate	7.75%
Maturity date	February 7, 2025
Trading price per share \| $ / shares	$ 1.40

Royalties and Fees (Details Nar

Royalties and Fees (Details Narrative)	12 Months Ended
Royalties and Fees (Details Narrative)	Dec. 31, 2021USD ($)integer	Dec. 31, 2020USD ($)integer	Dec. 31, 2019USD ($)
Deferred contract income and costs \| $	$ 810,000	$ 834,000
Number of franchisee \| integer	3,069	3,064
Outlets opened \| integer	24
Outlets closed \| integer	19
Initial Franchisee Fees
Royalties and fees \| $	$ 204,000	$ 198,000	$ 307,000
Equipment Commission
Royalties and fees \| $	$ 32,000	$ 45,000	$ 70,000

Liabilities for Leased Facili_2

Liabilities for Leased Facilities (Details Narrative)	12 Months Ended
Liabilities for Leased Facilities (Details Narrative)	Dec. 31, 2021USD ($)
Liabilities for Leased Facilities
Due in less than one year	$ 656,000
Due in one to three years	4,130,000
Due in three to five years	9,130,000
Due in more than five years	$ 1,500,000
Weighted average discount rate	7.00%
Future obligations operating leases	$ 15,370,000
Lease expense	$ 36,222
Weighted average lease term	7 years 3 months 18 days

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	12 Months Ended
Income Taxes (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Deferred tax asset	$ 3,232,406	$ 3,104,904
Net operating loss carry-forward	$ 12,000,000

Common Stock (Details)

Common Stock (Details) - $ / shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Common shares issuable	4,855,167	4,421,667	3,978,167	3,643,667	3,334,167
Employee Stock Option 1
Common shares issuable	1,756,167
Exercise price	$ 0.58
Employee Stock Option 2
Common shares issuable	727,500
Exercise price	$ 1
Employee Stock Option 3
Common shares issuable	280,000
Exercise price	$ 0.53
Employee Stock Option 4
Common shares issuable	35,000
Exercise price	$ 0.50
Employee Stock Option 5
Common shares issuable	372,500
Exercise price	$ 0.51
Employee Stock Option 6
Common shares issuable	332,500
Exercise price	$ 0.623
Employee Stock Option 7
Common shares issuable	474,500
Exercise price	$ 0.60
Employee Stock Option 8
Common shares issuable	413,500
Exercise price	$ 0.40
Employee Stock Option 9
Common shares issuable	463,500
Exercise price	$ 0.70

Common Stock (Details 1)

Common Stock (Details 1)	12 Months Ended
Common Stock (Details 1)	Dec. 31, 2021
Common Stock
Expected volatility	20.00%
Expected dividend yield	0.00%
Expected term (in years)	3 years
Risk-free interest rate, minimum	1.68%
Risk-free interest rate, maximum	2.82%

Common Stock (Details 2)

Common Stock (Details 2) - shares	12 Months Ended
Common Stock (Details 2) - shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Common Stock
Stock options outstanding, ending	4,855,167	4,421,667	3,978,167
Stock options granted	463,500	443,500	529,500
Stock options exercised	0	0	0
Stock options forfeited	(30,000)	0	(195,000)

Common Stock (Details 3)

Common Stock (Details 3) - shares	12 Months Ended
Common Stock (Details 3) - shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Common Stock
Non-vested stock options outstanding, ending	1,041,500	962,336	731,336
Non-vested stock options granted	463,500	443,500	529,500
Non-vested stock options vested	(354,336)	(212,500)	(325,000)
Non-vested stock options forfeited	(30,000)	0	(195,000)

Common Stock (Details Narrative

Common Stock (Details Narrative) - USD ($)	12 Months Ended
Common Stock (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Common Stock
Stock options exercisable	3,813,667
Common stock price per shares	$ 0.50
Warrants purchase shares	775,000
Stock options granted	463,500	443,500	529,500
Purchase shares of common stock	2,250,000
Stock options forfeited	30,000	0	195,000
Weighted average grant date fair value of non-vested options	$ 0.58
Exercise price	0.57
Weighted average grant date fair value of vested options	0.66
Weighted average grant date fair value of employee stock options granted	$ 0.70	$ 0.40	$ 0.66
Share based compensation	$ 28,119	$ 21,536	$ 18,829
Tax benefit	6,861	$ 5,168	$ 4,995
Unamortized compensation cost related to options	$ 50,941
Unamortized compensation cost related to options recognition period	36 years
Outstanding principal balance	$ 625,000
Maturity date	February 2023

Statements of Financial Accou_2

Statements of Financial Accounting Standards (Details Narrative)	12 Months Ended
	Dec. 31, 2021USD ($)
Statements of Financial Accounting Standards
Additional expense for rent	$ 36,222

Certain Relationships and Rel_2

Certain Relationships and Related Transactions (Details Narrative)	Dec. 31, 2021USD ($)shares
Warrant purchase shares \| shares	50,000
Aggregate principal amount of note payable	$ 50,000
Paul Mobley
Aggregate principal amount of note payable	200,000
Aggregate principal amount of note payable	1,275,000
Holders
Aggregate principal amount of note payable	150,000
Aggregate principal amount of note payable	$ 775,000

Unaudited Quarterly Financial_3

Unaudited Quarterly Financial Information (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Unaudited Quarterly Financial Information
Total revenue	$ 3,594	$ 3,424,000	$ 3,585,000	$ 3,282,000	$ 3,268,000	$ 2,938,000	$ 2,610,000	$ 2,719,000	$ 13,884,888	$ 11,535,664	$ 11,704,624
Operating income	(106)	264,000	424,000	1,162,000	295,000	411,000	1,019,000	589,000	1,743,588	2,314,044	2,613,588
Net (loss) income before income taxes	(451)	(79,000)	85,000	827,000	(4,984,000)	83,000	696,000	(337,000)
Net income (loss)	$ (324)	$ (79,000)	$ 85,000	$ 827,000	$ (5,906,000)	$ 83,000	$ 696,000	$ (255,000)	$ 509,465	$ (5,381,946)	$ (378,065)
Net income (loss) per common share
Basic	$ (0.01)	$ 0	$ 0	$ 0.04	$ (0.26)	$ 0	$ 0.03	$ (0.01)	$ 0.02	$ (0.24)	$ (0.02)
Earnings per share, diluted	$ (0.01)	$ 0	$ 0	$ 0.04	$ (0.26)	$ 0	$ 0.03	$ (0.01)	$ 0.02	$ (0.24)	$ (0.02)