Rocky Mountain Chocolate Factory, Inc.
For the period ended Nov 30, 2025. Filed Jan 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2025 · Filed Jan 13, 2026
RMCF$0.83+7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-08-31; filed 2025-10-14.
0001193125-25-239065
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-11-30; filed 2026-01-13.
0001193125-26-011914
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 98 current paragraphs.
61 unchanged; 33 reworded; 3 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
On December 18, 2025, the Company entered into a securities purchase agreement with ARM-D Rocky Mountain Chocolate Holdings LLC (the “Purchaser”) , pursuant to which, among other things, the Purchaser agreed to subscribe for and purchase, and the Company agreed to issue and sell to the Purchaser, an aggregate of 1,500,000 shares of the Company's common stock at a price per share of $1.80, for total proceeds of approximately $2.7 million. We plan to subsequently register the shares for resale by the Purchaser on a Form S-1.
Current report
Nine Months Ended November 30, 2025 Compared To the Nine Months Ended November 30, 2024
Current report
On December 18, 2025, the Company entered into a securities purchase agreement with the Purchaser, pursuant to which, among other things, the Purchaser agreed to subscribe for and purchase, and the Company agreed to issue and sell to the Purchaser, an aggregate of 1,500,000 shares of the Company's common stock at a price per share of $1.80, for total proceeds of approximately $2.7 million. We plan to subsequently register the shares for resale by the Purchaser on a Form S-1.
Removed paragraphs (3)
Previous report
Six Months Ended August 31, 2025 Compared To the Six Months Ended August 31, 2024
Previous report
Adjusted Gross Margin
Previous report
Non-GAAP Measures
Reworded paragraphs (33)
Previous wording
Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, and its subsidiaries (including its operating subsidiary with the same name, Rocky Mountain Chocolate Factory, Inc., a Colorado corporation) (“RMCF”) (referred to as the “Company,” “we,” “us,” or “our”) is an international franchisor, confectionery producer and retail operator. Founded in 1981, we are headquartered in Durango, Colorado and produce an extensive line of premium chocolate products and other confectionery products. Our revenues and profitability are derived principally from our franchised/licensed system of retail stores that feature chocolate and other confectionery products including gourmet caramel apples. We also sell our confectionery products in select locations outside of our system of retail stores and license the use of our brand with certain consumer products. As of August 31, 2025, there was 3 Company-owned, 114 licensee-owned and 139 franchised Rocky Mountain Chocolate Factory stores operating in 36 states and the Philippines.
Current wording
Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, and its subsidiaries (including its operating subsidiary with the same name, Rocky Mountain Chocolate Factory, Inc., a Colorado corporation) (“RMCF”) (referred to as the “Company,” “we,” “us,” or “our”) is an international franchisor, confectionery producer and retail operator. Founded in 1981, we are headquartered in Durango, Colorado and produce an extensive line of premium chocolate products and other confectionery products. Our revenues and profitability are derived principally from our franchised/licensed system of retail stores that feature chocolate and other confectionery products including gourmet caramel apples. We also sell our confectionery products in select locations outside of our system of retail stores and license the use of our brand with certain consumer products. As of November 30, 2025, there were 3 Company-owned, 112 licensee-owned and 139 franchised Rocky Mountain Chocolate Factory stores operating in 36 states and the Philippines.
Previous wording
On August 28, 2025, the Company entered into a first amendment to the Credit Agreement. RMC agreed to make an additional advance to the Company in the principal amount of $0.6 million, There was no change to other terms of the agreement. In connection with the amendment, the Company and RMC agreed to waive the financial covenant providing for a maximum ratio of total liabilities to total net worth for each of the fiscal quarters ending August 31, 2025 and November 30, 2025. The Company was not in compliance with the covenant as of August 31, 2025. All other covenants were met.
Current wording
On August 28, 2025, the Company entered into a first amendment to the Credit Agreement. RMC agreed to make an additional advance to the Company in the principal amount of $0.6 million, There was no change to other terms of the agreement. In connection with the amendment, the Company and RMC agreed to waive the financial covenant providing for a maximum ratio of total liabilities to total net worth for each of the fiscal quarters ending August 31, 2025 and November 30, 2025. The Company was not in compliance with the covenant as of November 30, 2025. All other covenants were met. Subsequent to November 30, 2025, the Company repaid $0.6 million of the $6.6 million outstanding.
Previous wording
November 30, 2025. At August 31, 2025, all covenants were met with the exception of the covenant for the maximum ratio of total liabilities to total net worth.
Current wording
November 30, 2025. At November 30, 2025, all covenants were met with the exception of the covenant for the maximum ratio of total liabilities to total net worth. Subsequent to November 30, 2025, the Company repaid $0.6 million of the $1.2 million outstanding.
Previous wording
As a result of recent macroeconomic inflationary trends, we have experienced and expect to continue experiencing higher raw material, labor, and freight costs. We have experienced labor and logistics challenges, which have contributed to higher cost of goods sold. In addition, we could experience additional lost sale opportunities if our products are not available for purchase as a result of continued disruptions in our supply chain relating to an inability to obtain raw materials or packaging, or if we or our franchisees experience delays in stocking our products.
Current wording
As a result of recent macroeconomic inflationary trends and federally imposed tariffs on certain imported items, we have experienced and expect to continue experiencing higher raw material, labor, and freight costs, although these trends have moderated during the quarter. We have experienced labor and logistics challenges, which have contributed to higher cost of goods sold. In addition, we could experience additional lost sale opportunities if our products are not available for purchase as a result of continued disruptions in our supply chain relating to an inability to obtain raw materials or packaging, or if we or our franchisees experience delays in stocking our products.
Previous wording
The most important factors in continued growth in our earnings are our ability to increase the sales of premium chocolate products produced in our Durango production facility, and the support of our franchisees in increasing the frequency of customer visits and the average value of each customer transaction, along with ongoing e-commerce revenue growth, and new franchise store growth.
Current wording
The most important factors in continued growth in our earnings are our ability to increase the sales of premium chocolate products produced in our Durango production facility, and the support of our franchisees in increasing the frequency of customer visits and the average value of each customer transaction, along with ongoing e-commerce revenue growth, and new franchise store growth. The Company recently signed four area development agreements that include the addition of 34 new franchise stores over the next three to five years.
Previous wording
Basic loss per share decreased from a loss of $(0.11) per share for the three months ended August 31, 2024 to a loss of $(0.09) per share for the three months ended August 31, 2025. Revenues increased by 6.9% from $6.4 million for the three months ended August 31, 2024 to $6.8 million for the three months ended August 31, 2025. Operating loss was $0.9 million for the three months ended August 31, 2024 compared to an operating loss of $0.5 million for the three months ended August 31, 2025.
Current wording
Basic loss per share improved from a loss of $(0.11) per share for the three months ended November 30, 2024 to a loss of $(0.02) per share for the three months ended November 30, 2025. Revenues decreased by 4.4% from $7.9 million for the three months ended November 30, 2024 to $7.5 million for the three months ended November 30, 2025. Operating loss was $0.7 million for the three months ended November 30, 2024 compared to an operating income of $0.1 million for the three months ended November 30, 2025.
Previous wording
The decrease in Durango product and retail sales of 2.9%, or $0.3 million for the six months ended August 31, 2025 compared to the six months ended August 31, 2024 was primarily due to the non-renewal of an unprofitable contract with a specialty market customer.
Current wording
The decrease in Durango product and retail sales of 5.8%, or $0.4 million for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was primarily due to the non-renewal of an unprofitable contract with a specialty market customer.
Previous wording
Royalty and marketing fees increased $0.2 million during the three months ended August 31, 2025 compared to the three months ended August 31, 2024, primarily due to the increase in store sales subject to royalty fees. The decrease in franchise fee revenue of $6 thousand during the three months ended August 31, 2025 compared to the three months ended August 31, 2024 was not material.
Current wording
Royalty and marketing fees increased 2.1% or $23 thousand during the three months ended November 30, 2025 compared to the three months ended November 30, 2024. Franchisees pay higher royalties on sales of revenue generated from products made in the store than products purchased from the Company under the Company's historic franchise agreement. Franchisees generally sell more products purchased from the Company during the holidays. The increase in franchise fee revenue of $14 thousand during the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was not material.
Previous wording
Total gross margin percentage increased to 2.9% for the six months ended August 31, 2025 compared to a gross margin of 2.6% during the six months ended August 31, 2024, due primarily to sales price increases.
Current wording
Total gross margin percentage increased to 21.4% for the three months ended November 30, 2025 compared to a gross margin of 10.0% during the three months ended November 30, 2024, due primarily to sales price increases.
Previous wording
The decrease in franchise costs for the three months ended August 31, 2025 compared to the three months ended August 31, 2024 was due to operational efficiencies and cost cutting measures and in part due to the timing of expenses. As a percentage of total royalty and marketing fees and franchise fee revenue, franchise costs decreased to 33.7% for the three months ended August 31, 2025 from 65.1% for the three months ended August 31, 2024.
Current wording
The decrease in franchise costs for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was due to operational efficiencies and cost cutting measures.
Previous wording
The increase in sales and marketing costs during the three months ended August 31, 2025 compared to the three months ended August 31, 2024 was due to an increase in activity related to new packaging designs and branding activities and in part due to timing of anticipated expenses.
Current wording
The decrease in sales and marketing costs during the three months ended November 30, 2025 compared to the three months ended November 30, 2024 was due to operational efficiencies and in part due to timing of anticipated expenses.
Previous wording
The decrease in general and administrative costs during the three months ended August 31, 2025 compared to the three months ended August 31, 2024, was due primarily to cost cutting measures. As a percentage of total revenues, general and administrative expenses decreased to 14.3% during the three months ended August 31, 2025, compared to 25.4% during the three months ended August 31, 2024.
Current wording
The decrease in general and administrative costs during the three months ended November 30, 2025 compared to the three months ended November 30, 2024, was due primarily to cost cutting measures. As a percentage of total revenues, general and administrative expenses decreased to 15.4% during the three months ended November 30, 2025, compared to 18.1% during the three months ended November 30, 2024.
Previous wording
Retail operating expenses increased 17.0% during the three months ended August 31, 2025 compared to the three months ended August 31, 2024. This increase is primarily the result of increases in operating costs and in part due to the timing of expenses.
Current wording
Retail operating expenses increased 122.2% during the three months ended November 30, 2025 compared to the three months ended November 30, 2024. This increase is primarily the result of the purchase of a third retail store during in August 2025 and in part due to the timing of expenses.
Previous wording
Depreciation and amortization, exclusive of depreciation and amortization included in cost of sales was $0.1 million during the three months ended August 31, 2025, an increase of 184.2% from $38 thousand during the three months ended August 31, 2024. Depreciation and amortization included in cost of sales increased 25.3% from $0.19 million during the three months ended August 31, 2024 to $0.24 million during the three months ended August 31, 2025. This increase was the result of prior year investments in equipment.
Current wording
Depreciation and amortization, exclusive of depreciation and amortization included in cost of sales was $0.1 million during the three months ended November 30, 2025, an increase of 77.8% from $63 thousand during the three months ended November 30, 2024. Depreciation and amortization included in cost of sales increased 10.4% from $0.21 million during the three months ended November 30, 2024 to $0.23 million during the three months ended November 30, 2025. This increase was the result of prior year investments in equipment.
Previous wording
Total other expense was $0.2 million during the three months ended August 31, 2025, compared to other income of $0.2 million during for the three months ended August 31, 2024. Interest expense increased to $0.2 million for the three months ended August 31, 2025 compared to $0.1 million for the three months ended August 31, 2024 due to an increase in our debt balance outstanding. In addition, a net gain on the disposal of assets for $0.2 million relating to gain on sale of equipment of $0.5 million was offset by loss on the factoring of the U-Swirl promissory note of $0.3 million during the three months ended August 31, 2024.
Current wording
Total other expense was $0.2 million during the three months ended November 30, 2025, compared to other expense of $0.1 million during for the three months ended November 30, 2024. Interest expense increased to $0.2 million for the three months ended November 30, 2025 compared to $0.1 million for the three months ended November 30, 2024 due to an increase in our debt balance outstanding.
Previous wording
Basic loss per share decreased from a loss of $(0.37) per share for the six months ended August 31, 2024 to a loss of $(0.13) per share for the six months ended August 31, 2025. Revenues increased by 3.2% from $12.8 million for the six months ended August 31, 2024 to $13.2 million for the six months ended August 31, 2025. Operating loss was $2.5 million for the six months ended August 31, 2024 compared to an operating loss of $0.6 million for the six months ended August 31, 2025.
Current wording
Basic loss per share improved from a loss of $(0.47) per share for the nine months ended November 30, 2024 to a loss of $(0.15) per share for the nine months ended November 30, 2025. Revenues increased for the nine months ended November 30, 2025 when compared with the nine months ended November 30, 2024 by 0.3% or $59 thousand. The operating loss was $3.2 million for the nine months ended November 30, 2024 compared to an operating loss of $0.5 million for the nine months ended November 30, 2025.
Previous wording
The increase in Durango product and retail sales of 5.4%, or $0.3 million for the three months ended August 31, 2025 compared to the three months ended August 31, 2024 was primarily due to sales price increases.
Current wording
The decrease in Durango product and retail sales of 4.0%, or $0.7 million for the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024 was primarily due to the non-renewal of an unprofitable contract with a specialty market customer.
Previous wording
Royalty and marketing fees increased $0.7 million during the six months ended August 31, 2025 compared to the six months ended August 31, 2024, Franchisees pay higher royalties on sales revenue generated from products made in the store than products purchased from the Company. Sales of store made product increased in the current period. The decrease in franchise fee revenue of $40 thousand during the six months ended August 31, 2025 compared to the six months ended August 31, 2024 was primarily the result of fewer store openings over time.
Current wording
Royalty and marketing fees increased $0.8 million during the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024. Franchisees pay higher royalties on sales revenue generated from products made in the store than products purchased from the Company under the Company's historic franchise agreement. Sales of store made product increased in the current period. The decrease in franchise fee revenue of $27 thousand during the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024 was primarily the result of fewer store openings over time.
Previous wording
Total gross margin percentage decreased to (0.6)% for the three months ended August 31, 2025 compared to a gross margin of 11.5% during the three months ended August 31, 2024, due primarily to an increase in the cost of raw materials, such as cocoa, and transportation.
Current wording
Total gross margin percentage increased to 10.1% for the nine months ended November 30, 2025 compared to a gross margin of 5.5% during the nine months ended November 30, 2024, due primarily to sales price increases.
Previous wording
The decrease in franchise costs for the six months ended August 31, 2025 compared to the six months ended August 31, 2024 was due primarily to operational efficiencies and cost cutting measures and in part due to the timing of expenses. As a percentage of total royalty and marketing fees and franchise fee revenue, franchise costs decreased to 34.8% for the six months ended August 31, 2025 from 57.6% for the six months ended August 31, 2024.
Current wording
The decrease in franchise costs for the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024 was due primarily to operational efficiencies and cost cutting measures and in part due to the timing of expenses.
Previous wording
The decrease in sales and marketing costs during the six months ended August 31, 2025 compared to the six months ended August 31, 2024 was due primarily to operational efficiencies and in part to timing of anticipated expenses.
Current wording
The decrease in sales and marketing costs during the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024 was due primarily to operational efficiencies and in part to timing of anticipated expenses.
Previous wording
The decrease in general and administrative costs during the six months ended August 31, 2025 compared to the six months ended August 31, 2024, was due primarily to cost cutting measures. As a percentage of total revenues, general and administrative expenses decreased to 15.0% during the six months ended August 31, 2025, compared to 22.4% during the six months ended August 31, 2024.
Current wording
The decrease in general and administrative costs during the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024, was due primarily to cost cutting measures. As a percentage of total revenues, general and administrative expenses decreased to 15.1% during the nine months ended November 30, 2025, compared to 20.7% during the nine months ended November 30, 2024.
Previous wording
Retail operating expenses increased 10.2% during the six months ended August 31, 2025 compared to the six months ended August 31, 2024. This increase is primarily the result of increases in operating costs and in part due to the timing of expenses.
Current wording
Retail operating expenses increased 44.1% during the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024. This increase is primarily the result of the purchase of a third retail store during in August 2025 and in part due to the timing of expenses.
Previous wording
Depreciation and amortization, exclusive of depreciation and amortization included in cost of sales was $226 thousand during the six months ended August 31, 2025, an increase of 182.5% from $80 thousand during the six months ended August 31, 2024. Depreciation and amortization included in cost of sales increased 182.5% from $0.1 million during the six months ended August 31, 2024 to $0.2 million during the six months ended August 31, 2025. This increase was the result of prior year investments in production equipment.
Current wording
Depreciation and amortization, exclusive of depreciation and amortization included in cost of sales was $338 thousand during the nine months ended November 30, 2025, an increase of 136.4% from $143 thousand during the nine months ended November 30, 2024. Depreciation and amortization included in cost of sales increased 16.7% from $0.6 million during the nine months ended November 30, 2024 to $0.7 million during the nine months ended November 30, 2025. This increase was the result of prior year investments in production equipment.
Previous wording
Other expense was $0.4 million during the six months ended August 31, 2025, compared to other income of $0.2 million during for the six months ended August 31, 2024. Interest expense increased to $0.4 million, for the six months ended August 31, 2025 compared to $0.1 million during the six months ended August 31, 2024 due to an increase in our debt balance outstanding. In addition, a net gain on the disposal of assets for $0.2 million relating to gain on sale of equipment of $0.5 million was offset by loss on the factoring of the U-Swirl promissory note of $0.3 million during the six months ended August 31, 2024.
Current wording
Other expense was $0.6 million during the nine months ended November 30, 2025, compared to other income of $17 thousand during for the nine months ended November 30, 2024. Interest expense increased to $0.6 million, for the nine months ended November 30, 2025 compared to $0.3 million during the nine months ended November 30, 2024 due to an increase in our debt balance outstanding. In addition, a net gain on the disposal of assets for $0.3 million relating to gain on sale of equipment of $0.5 million was offset by loss on the factoring of the U-Swirl promissory note of $0.3 million during the nine months ended November 30, 2024.
Previous wording
As of August 31, 2025, working capital was $3.5 million compared with $2.4 million as of February 28, 2025. The increase in working capital was due primarily to the increase in cash and cash equivalents, increase in notes receivable, and decrease in accrued salaries and wages during the six months ended August 31, 2025. Expected future cash requirements include lease liabilities, purchase obligations, and capital expenditures to support the expected future growth of the business. Our credit agreements do not require repayment until maturity in September 2027
Current wording
As of November 30, 2025, working capital was $3.6 million compared with $2.4 million as of February 28, 2025. The increase in working capital was due primarily to the proceeds of $1.8 million from notes payable during the nine months ended November 30, 2025. Expected future cash requirements include lease liabilities, purchase obligations, and capital expenditures to support the expected future growth of the business. Our credit agreements do not require repayment until maturity in September 2027, however $1.2 million was repaid subsequent to November 30, 2025.
Previous wording
Cash and cash equivalent balances increased from $0.7 million as of February 28, 2025 to $2.0 million as of August 31, 2025 primarily as a result of proceeds of $1.8 million from notes payable. Our current ratio was 1.53 to 1.0 on August 31, 2025 compared to 1.34 to 1.0 on February 28, 2025. We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, financing and investing requirements necessary to implement our long-term business plan.
Current wording
Cash and cash equivalent balances decreased from $0.7 million as of February 28, 2025 to $0.6 million as of November 30, 2025 primarily as a result of proceeds of $1.8 million from notes payable offset by changes in operating assets and liabilities that resulted in net cash outflows of $1.4 million and net cash used in financing activities of $0.5 million. Our current ratio was 1.66 to 1.0 on November 30, 2025 compared to 1.34 to 1.0 on February 28, 2025. We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, financing and investing requirements necessary to implement our long-term business plan.
Previous wording
During the six months ended August 31, 2025, we had a consolidated net loss of $1.0 million. Operating activities used cash of $0.1 million, with the principal adjustment to reconcile net income to net cash used in operating activities being depreciation and amortization of $0.7 million and stock compensation expense of $0.1 million, partially offset by recovery on accounts and notes receivable of $0.1 million. Changes in operating assets and liabilities resulted in a net cash outflow of $0.1 million from cash used in the normal course of business. During the six months ended August 31, 2024, we had a consolidated net loss of $2.4 million. Operating activities used cash of $5.7 million, with the principal adjustment to reconcile net income to net cash used in operating activities being depreciation and amortization of $0.5 million and a gain on the sale of assets of $0.2 million.
Current wording
During the nine months ended November 30, 2025, we had a consolidated net loss of $1.1 million. Operating activities used cash of $1.4 million, with the principal adjustment to reconcile net income to net cash used in operating activities being depreciation and amortization of $1.0 million and stock compensation expense of $0.2 million, partially offset by recovery on accounts and notes receivable of $0.1 million. Changes in operating assets and liabilities resulted in a net cash outflow of $1.4 million from cash used in the normal course of business. During the nine months ended November 30, 2024, we had a consolidated net loss of $3.2 million. Operating activities used cash of $7.8 million, with the principal adjustment to reconcile net income to net cash used in operating activities being depreciation and amortization of $0.7 million and a gain on the sale of assets of $0.3 million. Changes in operating assets and liabilities resulted in a net cash outflow of $7.8 million from cash used in the normal course of business.
Previous wording
During the six months ended August 31, 2025, cash flows used in investing activities was $0.4 million, primarily due to the purchases of property and equipment of $0.2 million, and the acquisition of the retail store in Camarillo, CA for $0.2 million. In comparison, investing activities provided for cash of $0.2 million during the six months ended August 31, 2024, primarily due to the purchases of property and equipment of $1.5 million, offset by proceeds from the sale of assets of $1.6 million.
Current wording
During the nine months ended November 30, 2025, cash flows used in investing activities was $0.5 million, primarily due to the purchases of property and equipment of $0.3 million, and the acquisition of the retail store in Camarillo, CA for $0.2 million. In comparison, investing activities used cash of $0.1 million during the nine months ended
Previous wording
There were $1.8 million cash flows from financing activities during the six months ended August 31, 2025 compared to $4.4 million cash flows from financing activities during the six months ended August 31, 2024. During the six months ended August 31, 2025, the Company received $1.8 million in proceeds from notes payable. The Company received $2.2 million on its revolving line of credit, in addition to proceeds of $2.2 million from the issuance and sale of common stock during the six months ended August 31, 2024.
Current wording
There were $1.8 million cash flows from financing activities during the nine months ended November 30, 2025 compared to $6.9 million cash flows from financing activities during the nine months ended November 30, 2024. During the nine months ended November 30, 2025, the Company received $1.8 million in proceeds from notes payable. The Company received $6.0 million in proceeds from its RMCF2 Credit Agreement, $2.2 million from the issuance and sales of common stock and $2.2 million on its revolving line of credit, offset by payment of the line of credit at maturity of $3.5 million during the nine months ended November 30, 2024. Subsequent to November 30, 2025, the Company received proceeds of $2.7 million from the issuance and sale of common stock.
Previous wording
On September 30, 2024, we entered into the Credit Agreement with RMC. Proceeds from the Credit Agreement were used to repay a $3.5 million line of credit and for capital investments. Pursuant to the Credit Agreement, we received an advance in the principal amount of $6.0 million, which advance is evidenced by the Note. The Note will mature on the maturity date, and interest accrues at a rate of 12% per annum and is payable monthly in arrears. All outstanding principal and interest will be due on the maturity date. The Credit Agreement is collateralized by our Durango real estate property and the related inventory and property, plant and equipment located on that property, as well as our accounts receivable and cash accounts. On August 28, 2025, we amended the agreement and received an additional $0.6 million. As of August 31, 2025, $6.6 million was outstanding on the Credit Agreement.
Current wording
On September 30, 2024, we entered into the Credit Agreement with RMC. Proceeds from the Credit Agreement were used to repay a $3.5 million line of credit and for capital investments. Pursuant to the Credit Agreement, we received an advance in the principal amount of $6.0 million, which advance is evidenced by the Note. The Note will mature on the maturity date, and interest accrues at a rate of 12% per annum and is payable monthly in arrears. All outstanding principal and interest will be due on the maturity date. The Credit Agreement is collateralized by our Durango real estate property and the related inventory and property, plant and equipment located on that property, as well as our accounts receivable and cash accounts. On August 28, 2025, we amended the agreement and received an additional advance of $0.6 million. As of November 30, 2025, $6.6 million was outstanding on the Credit Agreement. Subsequent to November 30, 2025, the Company repaid $0.6 million of the $6.6 million outstanding.
Previous wording
Pursuant to the new credit agreement, RMCF2 agreed to make an advance to the Company in the principal amount of $1.2 million, which advance is evidenced by the RMCF2 Note. The RMCF2 Note matures on September 30, 2027 and interest accrues at a rate of 12% per annum and is payable monthly in arrears. All outstanding principal and interest will be due on the maturity date. The RMCF2 Credit Agreement is collateralized by the Company's Durango real estate property and the related inventory and property, plant and equipment located on that property, as well as the Company's accounts receivable and cash accounts.
Current wording
Pursuant to the new credit agreement, RMCF2 agreed to make an advance to the Company in the principal amount of $1.2 million, which advance is evidenced by the RMCF2 Note. The RMCF2 Note matures on September 30, 2027 and interest accrues at a rate of 12% per annum and is payable monthly in arrears. All outstanding principal and interest will be due on the maturity date. The RMCF2 Credit Agreement is collateralized by the Company's Durango real estate property and the related inventory and property, plant and equipment located on that property, as well as the Company's accounts receivable and cash accounts. Subsequent to November 30, 2025, the Company repaid $0.6 million of the $1.2 million outstanding.
Previous wording
As of August 31, 2025, we had purchase obligations of approximately $2.4 million. These purchase obligations primarily consist of contractual obligations for future purchases of commodities for use in our manufacturing.
Current wording
As of November 30, 2025, we had purchase obligations of approximately $4.2 million. These purchase obligations primarily consist of contractual obligations for future purchases of commodities for use in our manufacturing.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
November 30, 2024, primarily due to the purchases of property and equipment of $2.1 million, offset by proceeds from the sale of assets of $1.9 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In addition to the results provided in accordance with GAAP, we provide certain non-GAAP measures, which present results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP. Adjusted gross margin is a non-GAAP measure. Adjusted gross margin is equal to the sum of our total gross margin plus depreciation and amortization calculated in accordance with GAAP. We believe adjusted gross margin is helpful in understanding our past performance as a supplement to gross margin, and other performance measures calculated in conformity with GAAP. We believe that adjusted gross margin is useful to investors because they provide a measure of operating performance and our ability to generate cash that is unaffected by non-cash accounting measures. Additionally, we use adjusted gross margin rather than gross margin to make incremental pricing decisions. Adjusted gross margin has limitations as analytical tools because they exclude the impact of depreciation and amortization expense and you should not consider it in isolation or as a substitute for any measure reported under GAAP. Our use of capital assets makes depreciation and amortization expense a necessary element of our costs and our ability to generate income. Due to these limitations, we use adjusted gross margin as measures of performance only in conjunction with GAAP measures of performance such as gross margin.