Rocky Mountain Chocolate Factory Closes $2.2 Million Private Placement Led by Strategic Investment from American Heritage Railways
DURANGO, Colo., Aug. 06, 2024 (GLOBE NEWSWIRE) — Rocky Mountain Chocolate Factory Inc. (Nasdaq: RMCF) (the “Company,” “we,” or “RMCF”), an international franchisor and producer of premium chocolate and other confectionery products, including gourmet caramel apples, has entered into a securities purchase agreement for a private investment in public equity (“PIPE”) financing that generated gross proceeds to the Company of approximately $2.2 million, before offering expenses.
Pursuant to the terms of the Securities Purchase Agreement, RMCF sold an aggregate of 1.25 million common shares at a price of $1.75 per share. The issue price reflects a 15% premium to the closing share price on August 5, 2024.
The PIPE financing is being led by American Heritage Railways, a Durango-based railroad and entertainment company that offers experiences around the world. Current RMCF board member Steve Craig is also participating in the offering.
“This offering represents a first step for us to strengthen our balance sheet and provides us with the working capital needed to advance our updated three-year strategic plan,” said Jeff Geygan, Interim CEO. “We are in the final stages of completing a separate, non-equity financing that we believe will provide us with the capital needed to execute on our plans and return RMCF to a state of sustainable growth and profitability.”
“We are also pleased to welcome American Heritage Railways (“AHR”) as a new strategic shareholder,” Geygan added. “AHR is one of the most renowned organizations in Durango, Colorado, reaching more than 2 million customers annually through its own owned railroads, historic attractions and special event licenses at more than 50 additional properties. These licensing rights include The Polar Express™ and Peanuts by Schulz™, among others. Their customer base is a natural fit for our premium chocolate and confectionery products.”
The offer and sale of the securities referred to above is being made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended, and may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Concurrently with the execution of the securities purchase agreement, RMCF and the investors entered into a registration rights agreement pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the common shares sold in the PIPE financing.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains statements about our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor protection provided by those sections. These forward-looking statements involve various risks and uncertainties. Statements, other than statements of historical fact, included in this press release are forward-looking statements. Many of the forward-looking statements contained herein can be identified by the use of forward-looking words such as “will,” “intend,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “potential” or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements expressing general views about future operating results – are forward-looking statements. The Company’s management believes that these forward-looking statements are reasonable as of the date they are made. However, undue reliance should not be placed on these forward-looking statements because they speak only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause our Company’s actual results to differ materially from historical experience and our current expectations or projections. These risks and uncertainties include, but are not limited to: inflationary impacts, changes in the confectionery business environment, seasonality, consumer interest in our products, international receptivity to our products, consumer and retail trends, raw material costs and availability, competition, the success of our co-branding strategy, the success of international expansion efforts and the effect of government regulations. For a detailed discussion of the risks and uncertainties that could cause our actual results to differ from the forward-looking statements contained herein, please see the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, each filed with the Securities and Exchange Commission.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc. is an international franchisor of premium chocolate and confectionery stores and a producer of a wide range of premium chocolate and other confectionery products, including gourmet caramel apples. Rocky Mountain Chocolate Factory was named one of America’s Best Retailers in Newsweek’s “America’s Best Retailers 2023” list in the Chocolate and Confectionery Stores category. The Company is headquartered in Durango, Colorado. The Company and its franchisees and licensees operate more than 260 Rocky Mountain Chocolate stores in the United States, with several international locations. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “RMCF.”
Contact for investors
Sean Mansouri, CFA
Raise IR
720-330-2829
RMCF@elevate-ir.com
