Opening the filing
8-K
Emerging growth company ☐ If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On October 16, 2026, Rocky Mountain Chocolate Factory, Inc. (the “Company”) entered into a Business Loan Agreement (the “Loan Agreement”), a Promissory Note (the “Alpine Note”) and a Commercial Security Agreement (the “Security Agreement” and, together with the Loan Agreement and the Alpine Note, the “Loan Documents”) with Alpine Bank, a Colorado banking corporation (“Alpine Bank”), providing for a $2.0 million term loan (the “Alpine Loan”). The full amount of the Alpine Loan was funded on October 16, 2026, and the Company intends to use the proceeds for working capital.
The Alpine Loan matures on October 16, 2028. The Company is required to make monthly payments of accrued interest beginning November 16, 2026, with all outstanding principal and accrued interest due at maturity. The Alpine Loan bears interest at a variable rate equal to the JP Morgan Chase Bank prime rate plus 1.00%, subject to a floor of 6.00% per annum and a ceiling of the lesser of 24.00% per annum or the maximum rate permitted by law, and the interest rate increases to 24.00% upon an event of default. The Company may prepay the Alpine Loan at any time without penalty. In connection with the Alpine Loan, the Company paid a $20,000 loan origination fee and a $30,000 cash collateral fee to the Colorado Housing and Finance Authority (“CHFA”).
The Company’s obligations under the Alpine Loan are secured by a security interest in substantially all of the Company’s assets and personal property pursuant to the Security Agreement, and are further secured by an assignment to Alpine Bank of a deposit account of approximately $1.0 million held by CHFA at Alpine Bank.
The Loan Agreement contains customary representations, warranties and affirmative and negative covenants, including restrictions on the Company’s ability, without Alpine Bank’s consent, to incur additional indebtedness, grant liens, merge or consolidate, sell assets outside the ordinary course of business, and pay dividends, repurchase shares or make other restricted payments, as well as a requirement that the Company maintain its deposit accounts, including its primary operating account, with Alpine Bank. The Loan Documents also contain customary events of default, including, among others, payment defaults, covenant defaults, cross-defaults, insolvency events, a material adverse change in the Company’s financial condition, and any change in ownership of 25% or more of the Company’s common stock. Upon an event of default, Alpine Bank may declare all outstanding amounts immediately due and payable and exercise its other remedies under the Loan Documents.
The foregoing description of the Loan Documents does not purport to be complete and is qualified in its entirety by reference to the full text of the Loan Agreement, the Alpine Note and the Security Agreement, copies of which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed in the Current Report on Form 8-K filed by the Company on October 6, 2026 (the “Prior 8-K”), the Company entered into a Contract to Buy and Sell Real Estate (Commercial) (the “Purchase Agreement”) and a Commercial Lease (the “Lease”) with American Heritage Legacies, LLC (“AHL”), a company controlled by the family of Allen Harper, the Company’s Interim Chief Executive Officer, providing for the sale-leaseback of the Company’s property at 265 Turner Drive, Durango, Colorado (the “Durango Property”).
On October 16, 2026, the Company completed the sale of the Durango Property to AHL for $6.6 million, and the Lease commenced.
The Company used the net proceeds to repay in full approximately $6.6 million of principal and accrued interest outstanding under the Notes (as defined in the Prior 8-K), and the Company has no further obligations under the Notes.
The foregoing description of the Purchase Agreement and the Lease does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and the Lease, which were filed as Exhibits 10.1 and 10.2, respectively, to the Prior 8-K and are incorporated herein by reference.
Item 2.02. Results of Operations and Financial Condition.
Exhibit 99.1
David Denker, Chief Operating Officer, added, ”During the second quarter, we made progress improving production and execution across the business. August was our highest production and shipping month of the calendar year. Increasing production volume from our Durango facility remains a key priority as we prepare for the holiday season. Enhancements to our reporting platform, combined with our ERP capabilities, are providing our teams with greater visibility into demand, inventory and production requirements. These operational improvements, together with our continued focus on production efficiency and execution, contributed to the recovery in gross margin during the quarter. We believe there is additional opportunity to build on this progress as we move through the holiday season.”
Mr. Denker continued, ”The acquisition of Chino Hills in July 2026 expanded our company-owned store base to five locations, while new franchised stores opened in Folsom, California, and Tinton Falls, New Jersey. As we grow our footprint and continue to enhance operations, we remain focused on consistent execution, supporting our franchisees and preserving the product quality and longstanding recipes that distinguish Rocky Mountain Chocolate Factory.”
Fiscal Second Quarter 2027 Financial Results vs. Fiscal Second Quarter 2026 Total revenue was $6.7 million for the second quarter of fiscal 2027 compared to $6.8 million in the second quarter of fiscal 2026. Primarily due to lower Durango product sales and royalty and marketing fees which offset the increase in retail sales, driven by the larger company-owned store base and price increases.
Total product and retail gross profit increased to $0.4 million in the second quarter of fiscal 2027 compared to a gross loss of less than $0.1 million in the second quarter of fiscal 2026. Gross margin improved to 8.0% from (0.6)%, reflecting pricing actions and production efficiencies.
Total costs and expenses were $7.7 million in the second quarter of fiscal 2027, up from $7.3 million in the second quarter of fiscal 2026. The increase primarily reflects the larger company-owned store base and higher franchise and general and administrative costs. These increases were partially offset by lower cost of sales and sales and marketing expenses.
Net loss was $1.3 million or $(0.14) per share for the second quarter of fiscal 2027, compared to a net loss of $0.7 million or $(0.09) per share in the second quarter of fiscal 2026.
EBITDA loss was $0.7 million in the second quarter of fiscal 2027 compared to a loss of $0.1 million in the second quarter of fiscal 2026.
In the fiscal second quarter, the Board formed a strategic committee, which with the assistance of its advisors, is exploring strategic alternatives that may be available to the Company.
Alternatives may include, among other things, a possible sale, merger, or other business combination, or a going-private transaction.
In connection with this process, the Company has received expressions of interest from third parties. There can be no assurance that this review of strategic alternatives will result in any transaction or other strategic change.
Subsequent Events
Subsequent to quarter end, the Company completed a $6.6 million sale-leaseback transaction with American Heritage Legacies, LLC for its manufacturing facility located in Durango, Colorado.
The sale was completed and the lease commenced on October 16, 2026. Net proceeds from the sale of the property have been used to repay $6.6 million in debt, which bears interest at 12% per annum. In connection with the repayment, the Company incurred prepayment penalties and related costs of $0.3 million.
On October 16, 2026, the Company entered into a loan agreement with Alpine Bank, where the Company received an advance of $2.0 million for working capital purposes. The loan matures on October 16, 2028, and bears interest at the prime rate plus 1%. Additional information is included in the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2026.
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