Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | NOBLE ROMANS INC | |
Entity Central Index Key | 709,005 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | true | |
Amendment Description | This Amendment No. 2 to Form 10-Q (this "Amendment") amends the quarterly report on Form 10-Q for the quarter ended June 30, 2016 originally filed on August 11, 2016 (the "Original Filing") by Noble Roman's, Inc. (the "Company") and the Amendment No. 1 (the "Amended Filing") on November 2, 2016. The Company is filing this Amendment to correct certain typographical errors in the Amdended Filing. Except as described above, no other changes have been made to the Amended Filing. The Original Filing continues to speak as of the date of the Original Filing, the Company has not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,783,032 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 625,522 | $ 194,021 |
Accounts receivable - net | 2,222,841 | 2,007,751 |
Inventories | 640,150 | 492,222 |
Prepaid expenses | 831,155 | 634,016 |
Deferred tax asset - current portion | 925,000 | 925,000 |
Total current assets | 5,244,668 | 4,253,010 |
Property and equipment: | ||
Equipment | 1,825,392 | 1,376,190 |
Leasehold improvements | 88,718 | 88,718 |
Total | 1,914,110 | 1,464,908 |
Less accumulated depreciation and amortization | 1,124,832 | 1,092,785 |
Net property and equipment | 789,278 | 372,123 |
Deferred tax asset (net of current portion) | 7,994,699 | 8,158,523 |
Other assets including long-term portion of receivables-net | 5,911,600 | 5,681,272 |
Total assets | 19,940,245 | 18,464,928 |
Current liabilities: | ||
Current portion of long-term note payable to bank | 1,694,316 | 601,081 |
Current portion of loan payable to Super G Funding, LLC | 950,000 | 0 |
Accounts payable and accrued expenses | 200,423 | 847,418 |
Total current liabilities | 2,844,739 | 1,448,499 |
Long-term obligations: | ||
Term loans payable to bank – net of current portion | 0 | 1,366,454 |
Loan payable to Super G Funding, LLC (net of current portion) | 923,918 | 0 |
Notes payable to officers | 310,000 | 175,000 |
Note payable to Kingsway America, Inc. | 600,000 | 600,000 |
Total long-term liabilities | 1,833,918 | 2,141,454 |
Stockholders' equity: | ||
Common stock – no par value (25,000,000 shares authorized, 20,775,921 issued and outstanding as of December 31, 2015 and 20,783,032 issued and outstanding as of June 30, 2016) | 24,299,420 | 24,294,002 |
Accumulated deficit | (9,037,832) | (9,419,027) |
Total stockholders' equity | 15,261,588 | 14,874,975 |
Total liabilities and stockholders' equity | $ 19,940,245 | $ 18,464,928 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Stockholders' equity: | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, authorized shares | 25,000,000 | 25,000,000 |
Common stock, issued shares | 20,783,032 | 20,775,921 |
Common stock, outstanding shares | 20,783,032 | 20,775,921 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Royalties and fees | $ 1,874,235 | $ 2,026,510 | $ 3,590,546 | $ 3,799,082 |
Administrative fees and other | 10,635 | 14,885 | 21,709 | 26,633 |
Restaurant revenue | 55,554 | 54,390 | 107,047 | 97,076 |
Total revenue | 1,940,424 | 2,095,785 | 3,719,302 | 3,922,791 |
Operating expenses: | ||||
Salaries and wages | 232,601 | 292,357 | 483,909 | 571,874 |
Trade show expense | 130,441 | 136,470 | 258,877 | 262,585 |
Travel expense | 34,407 | 58,407 | 95,674 | 114,553 |
Broker commissions | 21,821 | 0 | 21,821 | 0 |
Other operating expenses | 179,971 | 193,964 | 375,284 | 401,590 |
Restaurant expenses | 44,173 | 49,665 | 89,905 | 101,435 |
Depreciation and amortization | 31,675 | 26,354 | 61,087 | 52,708 |
General and administrative | 384,666 | 407,669 | 790,475 | 809,827 |
Total expenses | 1,059,755 | 1,164,886 | 2,177,032 | 2,314,572 |
Operating income | 880,669 | 930,899 | 1,542,270 | 1,608,219 |
Interest | 82,735 | 42,193 | 137,941 | 88,229 |
Loss on restaurant discontinued | 0 | 47,331 | 36,776 | 93,672 |
Adjust evaluation of receivables | 750,659 | 600,000 | 750,659 | 600,000 |
Income before income taxes | 47,275 | 241,375 | 616,894 | 826,318 |
Income tax expense | 15,877 | 106,154 | 235,699 | 343,647 |
Net income | $ 431,398 | $ 135,221 | $ 381,195 | $ 482,671 |
Earnings per share - basic: | ||||
Operating income | $ 0.04 | $ 0.05 | $ 0.07 | $ 0.08 |
Net income | $ 0 | $ .01 | $ 0.02 | $ .02 |
Weighted average number of common shares outstanding | 20,783,032 | 20,483,091 | 20,780,727 | 20,291,653 |
Diluted earnings per share: | ||||
Operating income | $ 0.04 | $ 0.04 | $ 0.07 | $ 0.07 |
Net income | $ 0 | $ 0.01 | $ 0.02 | $ 0.02 |
Weighted average number of common shares outstanding | 20,974,419 | 21,844,981 | 20,972,114 | 21,653,543 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) | Common Stock | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2015 | $ 24,924,002 | $ (9,419,027) | $ 14,874,975 |
Beginning Balance, Shares at Dec. 31, 2015 | 20,775,921 | ||
Net income | 381,195 | 381,195 | |
Cashless exercise of employee stock options | 7,111 | ||
Amortization of value of employee stock options | $ 5,418 | 5,418 | |
Ending Balance, Amount at Jun. 30, 2016 | $ 24,299,420 | $ (9,037,832) | $ 15,261,588 |
Ending Balance, Shares at Jun. 30, 2016 | 20,783,032 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 381,195 | $ 482,671 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 37,466 | 68,365 |
Deferred income taxes | 163,824 | 343,647 |
(Increase) Decrease in: | ||
Accounts receivable | (215,090) | (75,764) |
Inventories | (147,928) | (763) |
Prepaid expenses | (197,139) | (191,881) |
Other assets | (674,176) | (276,655) |
Increase in: | ||
Accounts payable and accrued expenses | (588,392) | 453,880 |
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | (1,240,240) | 803,500 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (5,354) | (7,757) |
NET CASH USED IN INVESTING ACTIVITIES | (5,354) | (7,757) |
FINANCING ACTIVITIES | ||
Payment of principal on bank term loans | (273,219) | (744,236) |
Proceeds from loan | 135,000 | 0 |
Payment of principal on Super G Funding, LLC loan | (29,000) | 0 |
Proceeds from the exercise of employee stock options | 0 | 171,867 |
Proceeds from Super G Funding, LLC | 1,902,917 | 0 |
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | 1,735,698 | (572,369) |
DISCONTINUED OPERATIONS | ||
Payment of obligations from discontinued operations | (58,603) | (143,026) |
Increase in cash | 431,501 | 80,348 |
Cash at beginning of period | 194,021 | 200,349 |
Cash at end of period | 625,522 | 280,697 |
Supplemental schedule of investing and financing activities | ||
Cash paid for interest | $ 129,013 | $ 74,376 |
1. Basis of Presentation
1. Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
1. Basis of Presentation | The accompanying unaudited interim condensed consolidated financial statements, included herein, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated statements have been prepared in accordance with the Companys accounting policies described in the Companys Annual Report on Form 10-K for the year ended December 31, 2015 and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in that report. Unless the context indicates otherwise, references to the Company mean Noble Romans, Inc. and its subsidiaries. In the opinion of the management of the Company, the information contained herein reflects all adjustments necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition as of the dates indicated, which adjustments are of a normal recurring nature. The results for the three-month and six-month periods ended June 30, 2016, respectively, are not necessarily indicative of the results to be expected for the full year ending December 31, 2016. |
2. Royalties and Fees
2. Royalties and Fees | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
2. Royalties and Fees | Royalties and fees include initial franchise fees of $29,000 and $66,000 for the three-month and six-month periods ended June 30, 2015, and $77,000 and $129,000 for the three-month and six-month periods ended June 30, 2016, respectively. Royalties and fees included equipment commissions of $8,000 and $37,000 for the three-month and six-month periods ended June 30, 2015, and $6,000 and $10,000 for the three-month and six-month periods ended June 30, 2016, respectively. Royalties and fees including interest per franchise agreements, less initial franchise fees and equipment commissions, were $2.0 million and $3.7 million for the respective three-month and six-month periods ended June 30, 2015, and $1.8 million and $3.5 million for the respective three-month and six-month periods ended June 30, 2016. 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 a contractual liability of the franchisee. Generally, the Companys royalty income is paid by the Company initiating a draft on the franchisees account by electronic withdrawal. There were 2,562 franchises/licenses in operation on December 31, 2015 and 2,678 franchises/licenses in operation on June 30, 2016. During the six-month period ended June 30, 2016, there were 137 new outlets opened and 21 outlets closed. In the ordinary course, grocery stores from time to time add our licensed products, remove them and may subsequently re-offer them. Therefore, it is unknown how many licensed grocery store units included in the count above have left the system. |
3. Earnings per Share
3. Earnings per Share | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
3. Earnings per Share | The following table sets forth the calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2015: Three Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 135,221 20,483,091 $ .01 Effect of dilutive securities Options - 1,361,890 Diluted earnings per share Net income $ 135,221 21,844,981 $ .01 Six Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 482,671 20,291,653 $ .02 Effect of dilutive securities Options - 1,361,890 Diluted earnings per share Net income $ 482,671 21,653,543 $ .02 The following table sets forth the calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 31, 2016: Three Months Ended March 31, 2016 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 31,398 20,783,032 $ .00 Effect of dilutive securities Options - 191,387 - Diluted earnings per share Net income per share with assumed conversions $ 31,398 20,974,419 $ .00 Six Months Ended June 30, 2016 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 381,195 20,780,727 $ .02 Effect of dilutive securities Options - 191,387 Diluted earnings per share Net income $ 381,195 20,972,114 $ .02 |
4. Discontinued Operations
4. Discontinued Operations | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
4. Discontinued Operations | - At the end of December 2015, the Company determined to close a restaurant that had previously been used for demonstration and training purposes. This restaurant was a part of the discontinued operations in 2008, but the Company decided to continue operating this location until the lease expired. Since the restaurant was closed, the related revenue and expense were taken out of the 2015,operating income at the end of the year for the full year and the net expense shown as a loss on restaurant closed separate from the ongoing operations. The results for the three-month and six-month periods ended June 30, 2015 have been reclassified to remove those operations from ongoing operations consistent with the full year 2015 for comparison purposes to the three-month and six-month periods ended June 30, 2016. |
5. Note Payable
5. Note Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
5. Note Payable | In June 2016, the Company borrowed $2.0 million from Super G Funding, LLC ("Super G") and used those funds: (1) to repay the $500,000 revolving loan with the Bank, (2) for working capital purposes, and (3) to provide for construction of two new prototype locations to be used as a basis for additional franchising. This loan is to be repaid in the total amount of $2.7 million in regular bi-monthly payments over a two year period. |
6. Subsequent Events
6. Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
6. Subsequent Events | The Company evaluated subsequent events through the date the financial statements were issued and filed with SEC. There were no subsequent events that required recognition or disclosure beyond what is disclosed in this report. |
3. Earnings per Share (Tables)
3. Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share Tables | |
Earnings Per Share | Three Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 135,221 20,483,091 $ .01 Effect of dilutive securities Options - 1,361,890 Diluted earnings per share Net income $ 135,221 21,844,981 $ .01 Six Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 482,671 20,291,653 $ .02 Effect of dilutive securities Options - 1,361,890 Diluted earnings per share Net income $ 482,671 21,653,543 $ .02 The following table sets forth the calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 31, 2016: Three Months Ended March 31, 2016 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 31,398 20,783,032 $ .00 Effect of dilutive securities Options - 191,387 - Diluted earnings per share Net income per share with assumed conversions $ 31,398 20,974,419 $ .00 Six Months Ended June 30, 2016 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 381,195 20,780,727 $ .02 Effect of dilutive securities Options - 191,387 Diluted earnings per share Net income $ 381,195 20,972,114 $ .02 |
2. Royalties and Fees (Details
2. Royalties and Fees (Details Narrative) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)Integer | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)Integer | Jun. 30, 2015USD ($) | Dec. 31, 2015Integer | |
Royalties and Fees | $ | $ 1,800,000 | $ 2,000,000 | $ 3,500,000 | $ 3,700,000 | |
Number of Franchisee | Integer | 2,678 | 2,678 | 2,562 | ||
Outlets opened | Integer | 137 | ||||
Outlets closed | Integer | 21 | ||||
Initial Franchisee Fees | |||||
Royalties and Fees | $ | $ 77,000 | 29,000 | $ 129,000 | 66,000 | |
Equipment Commission | |||||
Royalties and Fees | $ | $ 6,000 | $ 8,000 | $ 10,000 | $ 37,000 |
3. Earnings Per Share (Details)
3. Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income (Numerator) | ||||
Net income | $ 431,398 | $ 135,221 | $ 381,195 | $ 482,671 |
Shares (Denominator) | ||||
Shares, basic | 20,783,032 | 20,483,091 | 20,780,727 | 20,291,653 |
Dilutive earnings per share: Income available to common stockholders and assumed conversions | 20,974,419 | 21,844,981 | 20,972,114 | 21,653,543 |
Per-Share (Amount) | ||||
Earnings per share | $ 0 | $ .01 | $ 0.02 | $ .02 |
Diluted earnings per share Income available to common stockholders and assumed conversions | $ 0 | $ 0.01 | $ 0.02 | $ 0.02 |