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Document And Entity Information (USD $)
12 Months Ended
Feb. 28, 2015
May 18, 2015
Aug. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name Rocky Mountain Chocolate Factory, Inc.
Document Type 10-K
Current Fiscal Year End Date --02-28
Entity Common Stock, Shares Outstanding 5,941,893
Entity Public Float $ 56,169,065
Amendment Flag false
Entity Central Index Key 0001616262
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Filer Category Smaller Reporting Company
Entity Well-known Seasoned Issuer No
Document Period End Date Feb 28, 2015
Document Fiscal Year Focus 2015
Document Fiscal Period Focus FY
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Consolidated Statements of Income (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Revenues
Sales $ 32,100,824 $ 31,662,273 $ 30,144,059
Franchise and royalty fees 9,407,552 7,522,534 6,171,142
Total revenues 41,508,376 39,184,807 36,315,201
Costs and Expenses
Cost of sales, exclusive of depreciation and amortization expense of $393,776, $292,914 and $286,541, respectively 20,215,833 19,613,411 18,955,136
Franchise costs 2,264,138 2,062,548 2,080,128
Sales & marketing 2,474,027 2,153,766 1,939,006
General and administrative 4,831,903 5,003,337 3,846,940
Retail operating 3,509,584 3,303,436 3,371,702
Depreciation and amortization 1,440,448 1,026,775 935,377
Loss on the sale of assets – Aspen Leaf Yogurt long-lived assets 2,011,917
Restructuring and acquisition related charges 807,476 786,013 635,168
Total costs and expenses 35,543,409 33,949,286 33,775,374
Operating Income 5,964,967 5,235,521 2,539,827
Other Income (Expense)
Interest expense (243,188) (49,333)
Interest income 58,662 84,596 43,667
Investment gain 18,380
Other, net (184,526) 53,643 43,667
Income Before Income Taxes 5,780,441 5,289,164 2,583,494
Income Tax Expense 2,037,695 2,154,660 1,233,460
Consolidated Net Income 3,742,746 3,134,504 1,350,034
Less: Net loss attributable to non-controlling interest (195,094) (1,257,940) (128,178)
Net Income attributable to RMCF $ 3,937,840 $ 4,392,444 $ 1,478,212
Basic Earnings per Common Share (in Dollars per share) $ 0.64 $ 0.72 $ 0.24
Diluted Earnings per Common Share (in Dollars per share) $ 0.61 $ 0.68 $ 0.24
Weighted Average Common Shares Outstanding (in Shares) 6,144,426 6,100,032 6,078,575
Dilutive Effect of Employee Stock Awards (in Shares) 268,913 336,879 140,426
Weighted Average Common Shares Outstanding, Assuming Dilution (in Shares) 6,413,339 6,436,911 6,219,001
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Consolidated Statements of Income (Parentheticals) (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Cost of sales, depreciation and amortization $ 393,776 $ 292,914 $ 286,541
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Consolidated Balance Sheets (USD $)
Feb. 28, 2015
Feb. 28, 2014
Current Assets
Cash and cash equivalents $ 7,157,371 $ 5,859,729
Accounts receivable, less allowance for doubtful accounts of $696,798 and $543,683, respectively* 4,291,470 [1] 5,198,223 [1]
Notes receivable, current portion, less current portion of the valuation allowance of $3,762 and $33,047, respectively 359,493 357,360
Refundable income taxes 172,945 160,890
Inventories, less reserve for slow moving inventory of $197,658 and $204,068, respectively 4,785,376 4,410,763
Deferred income taxes 572,957 538,871
Other 318,275 316,378
Total current assets 17,657,887 16,842,214
Property and Equipment, Net 6,797,536 8,488,198
Other Assets
Notes receivable, less current portion and allowance for doubtful accounts of $28,500 and $24,200, respectively 668,302 509,784
Goodwill, net* 2,977,473 [1] 3,063,473 [1]
Franchise rights* 5,439,460 [1] 5,613,248 [1]
Intangible assets, net* 440,428 [1] 468,183 [1]
Other 157,127 167,939
Total other assets 9,682,790 9,822,627
Total Assets 34,138,213 35,153,039
Current Liabilities
Current maturities of long term debt 1,208,888 108,023
Accounts payable 1,675,746 1,971,530
Accrued salaries and wages 819,184 776,567
Other accrued expenses 2,910,777 2,627,872
Dividend payable 721,536 675,422
Deferred income 951,241 1,798,781
Total current liabilities 8,287,372 7,958,195
Long-Term Debt, Less Current Maturities 5,083,479 6,291,977
Deferred Income Taxes 1,029,507 1,050,489
Commitments and Contingencies      
Stockholders' Equity
Common stock, $.03 par value; 100,000,000 shares authorized; 6,012,799 and 6,140,200 shares issued and outstanding, respectively 180,384 184,206
Additional paid-in capital* 7,163,092 [1] 8,921,723 [1]
Retained earnings 11,524,708 10,344,794
Non-controlling interest in equity of subsidiary* 869,671 [1] 401,655 [1]
Total stockholders’ equity 19,737,855 19,852,378
Total liabilities and stockholders’ equity 34,138,213 35,153,039
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, $.10 par value; 250,000 authorized; -0- shares issued and outstanding Series A Junior Participating Preferred Stock, authorized 50,000 shares 0 0
Undesignated series, authorized 200,000 shares 0 0
Undesignated Series [Member]
Stockholders' Equity
Preferred stock, $.10 par value; 250,000 authorized; -0- shares issued and outstanding Series A Junior Participating Preferred Stock, authorized 50,000 shares 0 0
Undesignated series, authorized 200,000 shares $ 0 $ 0
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Consolidated Balance Sheets (Parentheticals) (USD $)
Feb. 28, 2015
Feb. 28, 2014
Accounts receivable, allowance for doubtful accounts (in Dollars) $ 696,798 $ 543,683
Notes receivable, current portion of the valuation allowance (in Dollars) 3,762 33,047
Inventories, reserve (in Dollars) 197,658 204,068
Notes receivable, current portion and allowance for doubtful accounts (in Dollars) $ 28,500 $ 24,200
Preferred stock, par value (in Dollars per share) $ 0.1 $ 0.1
Preferred stock, authorized 250,000 250,000
Preferred stock, issued 0 0
Preferred stock, outstanding 0 0
Common stock, par value (in Dollars per share) $ 0.03 $ 0.03
Common stock, authorized 100,000,000 100,000,000
Common stock, issued 6,012,799 6,140,200
Common stock, outstanding 6,012,799 6,140,200
Series A Preferred Stock [Member]
Preferred stock, authorized 50,000 50,000
Undesignated Series [Member]
Preferred stock, authorized 200,000 200,000
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Consolidated Statements of Changes in Stockholders' Equity (USD $)
3 Months Ended 12 Months Ended
Feb. 28, 2015
May 31, 2014
Feb. 28, 2014
May 31, 2013
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Common Stock
Balance at beginning of year $ 184,206 $ 182,054 $ 184,206 $ 182,054 $ 184,872
Repurchase and retirement of common stock 3,127,624 1,715,352
Issuance of common stock 120 120 120
Exercise of stock options, vesting of restricted stock units and other 3,441 2,032 1,961
Balance at end of year 180,384 184,206 180,384 184,206 182,054
Additional Paid-In Capital
Balance at beginning of year 8,921,723 7,559,442 8,921,723 7,559,442 8,712,743
Repurchase and retirement of common stock (3,120,241) (1,710,453)
Issuance of common stock 47,360 48,280 37,080
Exercise of stock options, vesting of restricted stock units and other 731,400 746,667 461,695
Transfers from non-controlling interest* 382,306 498,502
Tax benefit from employee stock transactions 200,544 68,832 58,377
Balance at end of year 7,163,092 8,921,723 7,163,092 8,921,723 7,559,442
Retained Earnings
Balance at beginning of year 10,344,794 8,642,093 10,344,794 8,642,093 9,838,205
Net income attributable to RMCF 1,386,772 711,334 1,486,179 1,179,307 3,937,840 4,392,444 1,478,212
Cash dividends declared (2,757,926) (2,689,743) (2,674,324)
Balance at end of year 11,524,708 10,344,794 11,524,708 10,344,794 8,642,093
Non-controlling Interest in Equity of Subsidiary
Balance at beginning of year 401,655 [1] 1,005,523 401,655 [1] 1,005,523
Net loss (195,094) (1,257,940) (128,178)
Non-controlling interest in acquired business 664,612
Contributions * 663,110 [2] 654,072 [2] 469,089 [2]
Balance at end of year 869,671 [1] 401,655 [1] 869,671 [1] 401,655 [1] 1,005,523
Total Stockholders’ Equity 19,737,855 19,852,378 19,737,855 19,852,378 17,389,112
Common Shares
Balance at beginning of year (in Shares) 6,140,200 6,068,470 6,140,200 6,068,470 6,162,389
Repurchase and retirement of common stock (in Shares) (246,106) (163,300)
Issuance of common stock (in Shares) 4,000 4,000 4,000
Exercise of stock options, vesting of restricted stock units and other (in Shares) 114,705 67,730 65,381
Balance at end of year (in Shares) 6,012,799 6,140,200 6,012,799 6,140,200 6,068,470
Repurchase and Retirement of Common Stock [Member]
Common Stock
Repurchase and retirement of common stock $ (7,383) $ (4,899)
[2] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.The accompanying notes are an integral part of these consolidated financial statements.
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Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Cash Flows From Operating Activities:
Net income $ 3,742,746 $ 3,134,504 $ 1,350,034
Depreciation and amortization 1,440,448 1,026,775 935,377
Provision for loss on accounts and notes receivable 214,600 216,000 330,000
Provision for inventory loss 58,836 44,127 60,000
Asset impairment and store closure losses 225,640 65,000 172,000
(Gain) loss on sale of assets (46,857) 21,236 1,994,069
Expense recorded for stock compensation 865,240 660,325 535,809
Deferred income taxes (55,068) 258,557 (1,144,622)
Accounts receivable 662,625 (1,408,048) (235,345)
Refundable income taxes (12,055) (160,890) 724,911
Inventories (202,333) 12,793 98,478
Other assets (16,087) (63,958) 18,664
Accounts payable (451,080) (439,014) 513,119
Accrued liabilities 325,544 915,213 1,065,090
Deferred income (880,684) 1,381,297 (58,516)
Net cash provided by operating activities 5,871,515 5,663,917 6,359,068
Cash Flows From Investing Activities:
Additions to notes receivable (179,569) (784,098) (285,191)
Proceeds received on notes receivable 488,691 344,010 113,633
Proceeds from sale or distribution of assets 530,175 2,600 888,700
Acquisitions, net of cash acquired and franchise rights (1,688)
Intangible assets (5,677,034) (800,000)
Increase in other assets (2,395) (582,752) (137,616)
Purchase of property and equipment (626,744) (2,518,317) (742,871)
Net cash provided by (used in) investing activities 210,158 (9,215,591) (965,033)
Cash Flows From Financing Activities:
Proceeds from long-term debt 6,400,000
Payments on long-term debt (107,633)
Repurchase of common stock (3,127,624) (1,715,352)
Issuance of common stock 69,599 195,130 82,223
Proceeds from issuance of common stock in subsidiary 892,895 107,598
Tax benefit of stock option exercise 200,544 68,832 58,377
Dividends paid (2,711,812) (2,681,853) (2,623,031)
Net cash provided by (used in) financing activities (4,784,031) 4,089,707 (4,197,783)
Net Increase (Decrease) In Cash And Cash Equivalents 1,297,642 538,033 1,196,252
Cash And Cash Equivalents At Beginning Of Year 5,859,729 5,321,696 4,125,444
Cash And Cash Equivalents At End Of Year $ 7,157,371 $ 5,859,729 $ 5,321,696
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Note 1 - Nature of Operations and Summary of Significant Accounting Policies
12 Months Ended
Feb. 28, 2015
Disclosure Text Block [Abstract]
Business Description and Accounting Policies [Text Block]

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Nature of Operations


The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., its wholly-owned subsidiary, Aspen Leaf Yogurt, LLC (“ALY”) and its 39%-owned subsidiary, U-Swirl, Inc. (“U-Swirl”) of which, Rocky Mountain Chocolate Factory, Inc. has financial control (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.


The Company is an international franchisor, confectionery manufacturer and retail operator. Founded in 1981, the Company is headquartered in Durango, Colorado and manufactures an extensive line of premium chocolate candies and other confectionery products. U-Swirl franchises and operates soft-serve frozen yogurt stores. The Company also sells its candy in selected locations outside of its system of retail stores and license the use of its brand with certain consumer products.


Effective March 1, 2015, the Company was reorganized to create a holding company structure. The operating subsidiary with the same name , Rocky Mountain Chocolate Factory, Inc., a Colorado corporation (“RMCF”), which was previously the public company, became a wholly-owned subsidiary of a newly formed entity, Rocky Mountain Chocolate Factory, Inc., a Delaware corporation (“Newco”), and all of the outstanding shares of common stock of RMCF, par value $0.03 per share, was exchanged on a one-for-one basis for shares of common stock, par value $0.001, of Newco. The new holding company began trading on March 2, 2015 on the NASDAQ Global Market under the symbol “RMCF”, which was the same symbol used by RMCF prior to the holding company reorganization.


In January 2013, through the Company’s wholly-owned subsidiaries, including Aspen Leaf Yogurt, LLC (“ALY”), the Company entered into two agreements to sell all of the assets of its ALY frozen yogurt stores, along with its interest in the self-serve frozen yogurt franchises and retail units branded as “Yogurtini” which the Company also acquired in January 2013, to U-Swirl, a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl. Upon completion of these transactions, the Company ceased to directly operate any Company-owned ALY locations or sell and support frozen yogurt franchise locations, which is now being supported by U-Swirl. As of February 28, 2015, the Company held a 39% interest in U-Swirl. Additionally, the Company has the right to acquire approximately 26,271,000 shares of common stock of U-Swirl through the conversion of convertible debt owed by U-Swirl to the Company. If the Company exercised this conversion right, the Company believes it would hold approximately 72% of U-Swirl’s common stock. The U-Swirl Board of Directors is composed solely of Board members also serving the Rocky Mountain Chocolate Factory, Inc. Board of Directors.


In fiscal year (“FY”) 2014, U-Swirl acquired the franchise rights of frozen yogurt stores branded as “Cherryberry”, “Yogli Mogli” and “Fuzzy Peach” (see Note 18), and U-Swirl operates self-serve frozen yogurt cafes under the names “U-Swirl,” “Yogurtini,” “CherryBerry,” “Josie’s Frozen Yogurt,” “Yogli Mogli Frozen Yogurt,” “Fuzzy Peach Frozen Yogurt,” and “Aspen Leaf Yogurt”.


The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from franchisees’ sales; and sales at Company-owned stores of chocolates, frozen yogurt, and other confectionery products. The following table summarizes the number of stores operating under the Rocky Mountain Chocolate Factory brand and its subsidiaries at February 28, 2015:


   

Sold, Not Yet Open

   

Open

   

Total

 

Rocky Mountain Chocolate Factory

                       

Company-owned stores

    -       4       4  

Franchise stores – Domestic stores

    3       196       199  

Franchise stores – Domestic kiosks

    -       5       5  

International License Stores

    1       72       73  

Cold Stone Creamery – co-branded

    10       68       78  

U-Swirl Stores (Including all associated brands)

                       

Company-owned stores

    -       7       7  

Company-owned stores – co-branded

    -       3       3  

Franchise stores – North American stores

    *       214       214  

Franchise stores – North American – co-branded

    *       18       18  

International License Stores

    1       6       7  

Total

    15       593       608  

*U-Swirl cafés and the brands franchised by U-Swirl have historically utilized a development area sales model. The result is that many areas are under development and the rights to open cafés within the development areas have been established, but there is no assurance that any individual development area will result in a determinable number of café openings.


Consolidation


Management accounts for the activities of the Company and its subsidiaries, and the accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. As described above, on January 14, 2013, the Company acquired a controlling interest in U-Swirl. Prior to January 14, 2013, the Company’s consolidated financial statements exclude the financial information of U-Swirl. Beginning on January 14, 2013, the results of operations, assets and liabilities of U-Swirl have been included in these consolidated financial statements.


Cash Equivalents


The Company considers all highly liquid instruments purchased with an original maturity of six months or less to be cash equivalents. The Company classifies certain instruments with a maturity of between three and six months to be cash equivalents because these instruments allow for early termination with minimal penalty and are readily convertible to known amounts of cash. As of February 28, 2015 and February 28, 2014, the Company held a Certificate of Deposit with an original maturity date of six-months totaling $108,000 and classified this amount as a cash equivalent. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. As of the balance sheet date, and periodically throughout the year, the Company has maintained balances in various operating accounts in excess of federally insured limits. This amount was approximately $6.5 million at February 28, 2015.


Accounts and Notes Receivable


In the normal course of business, we extend credit to customers, primarily franchisees that satisfy pre-defined credit criteria. The Company believes that it has limited concentration of credit risk primarily because its receivables are secured by the assets of the franchisees to which the Company ordinarily extends credit, including, but not limited to, their franchise rights and inventories. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable, assessments of collectability based on historical trends, and an evaluation of the impact of current and projected economic conditions. The process by which the Company performs its analysis is conducted on a customer by customer, or franchisee by franchisee, basis and takes into account, among other relevant factors, sales history, outstanding receivables, customer financial strength, as well as customer specific and geographic market factors relevant to projected performance. The Company monitors the collectability of its accounts receivable on an ongoing basis by assessing the credit worthiness of its customers and evaluating the impact of reasonably likely changes in economic conditions that may impact credit risks. Estimates with regard to the collectability of accounts receivable are reasonably likely to change in the future. At February 28, 2015, the Company has $1,060,057 of notes receivable outstanding and an allowance for doubtful accounts of $32,262 associated with these notes. The notes require monthly payments and bear interest rates ranging from 4.5% to 8%. The notes mature through July, 2019 and approximately $954,000 of notes receivable are secured by the assets financed.


Inventories


Inventories are stated at the lower of cost or market. An inventory reserve is established to reduce the cost of obsolete, damaged and excess inventories to the lower of cost or market based on actual differences. This inventory reserve is determined through analysis of items held in inventory, and, if the recorded value is higher than the market value, the Company records an expense to reduce inventory to its actual market value. The process by which the Company performs its analysis is conducted on an item by item basis and takes into account, among other relevant factors, market value, sales history and future sales potential. Cost is determined using the first-in, first-out method.


Property and Equipment and Other Assets


Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method based upon the estimated useful life of the asset, which range from five to thirty-nine years. Leasehold improvements are amortized on the straight-line method over the lives of the respective leases or the service lives of the improvements, whichever is shorter.


The Company reviews its long-lived assets through analysis of estimated fair value, including identifiable intangible assets, whenever events or changes indicate the carrying amount of such assets may not be recoverable. The Company’s policy is to review the recoverability of all assets, at a minimum, on an annual basis.


Income Taxes


We provide for income taxes pursuant to the liability method. The liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset, including the utilization of a net operating loss or other carryforward prior to its expiration, is more likely than not. Due to historical losses, we established a full valuation allowance on our deferred tax assets. The Company's temporary differences are listed in Note 6.


Gift card breakage


The Company and our franchisees sell gift cards that are redeemable for product in our stores. The Company manages the gift card program, and therefore collects all funds from the activation of gift cards and reimburses franchisees for the redemption of gift cards in their stores. A liability for unredeemed gift cards is included in accounts payable and accrued liabilities in the balance sheets.


There are no expiration dates on our gift cards, and we do not charge any service fees. While our franchisees continue to honor all gift cards presented for payment, we may determine the likelihood of redemption to be remote for certain cards due to long periods of inactivity. The Company is in the process of accumulating sufficient historical redemption patterns to calculate breakage estimates related to unredeemed gift cards. This breakage rate is based on a percentage of sales when the likelihood of the redemption of the gift card becomes remote. Gift card breakage will be recognized over the same performance period, and in the same proportion, that the Company’s data has demonstrated that gift cards are redeemed. As the Company is in the process of accumulating sufficient historical redemption patterns to calculate breakage estimates, the Company did not recognize gift card breakage during the year ended February 28, 2015 or 2014. Accrued gift card liability was $2,611,774 and $2,091,074 at February 28, 2015 and 2014, respectively, and is included in accounts payable and accrued liabilities.


Goodwill


Goodwill arose from three transaction types. The first type was the result of the incorporation of the Company after its inception as a partnership. The goodwill recorded was the excess of the purchase price of the Company over the fair value of its assets. The Company has allocated this goodwill equally between its Franchising and Manufacturing operations. The second type was the purchase of various retail stores, either individually or as a group, for which the purchase price was in excess of the fair value of the assets acquired. Finally, goodwill arose from business acquisitions, where the fair value of the consideration given for acquisition exceeded the fair value of the identified assets net of liabilities.


The Company performs a goodwill impairment test on an annual basis or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. Recoverability of goodwill is evaluated through comparison of the fair value of each of our reporting units with its carrying value. To the extent that a reporting unit’s carrying value exceeds the implied fair value of its goodwill, an impairment loss is recognized. The Company performed impairment testing with no impact to its financial results for the years ended February 28, 2015 and 2014. See note 18 for additional discussion of goodwill and intangible assets.


Franchise Rights


Franchise rights arose from the entry into agreements to acquire substantially all of the franchise rights of Yogurtini, CherryBerry, Fuzzy Peach and Yogli Mogli (see Note 18). Franchise rights are amortized over a period of 20 years.


Insurance and Self-Insurance Reserves


The Company uses a combination of insurance and self-insurance plans to provide for the potential liabilities for workers’ compensation, general liability, property insurance, director and officers’ liability insurance, vehicle liability and employee health care benefits. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other assumptions. While the Company believes that its assumptions are appropriate, the estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.


Business Combinations


The Company accounts for business combinations using the acquisition method. Under the acquisition method, the purchase price of the acquisition is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. Fair values are derived from various observable and unobservable inputs and assumptions. The Company utilizes third-party valuation specialists to assist in the allocation. Initial purchase price allocations are preliminary and are subject to revision within the measurement period, not to exceed one year from the date of acquisition. The costs of the business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists.


Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Moreover, unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.


Sales


Sales of products to franchisees and other customers are recognized at the time of delivery. Sales of products to franchisees and other customers are made at standard prices, without any bargain sales of equipment or supplies. Sales of products at retail stores are recognized at the time of sale.


Rebates


Rebates received from purveyors that supply products to our franchisees are included in franchise royalties and fees. Product rebates are recognized in the period in which they are earned. Rebates related to company-owned locations are offset against operating costs.


Shipping Fees


Shipping fees charged to customers by the Company’s trucking department are reported as sales. Shipping costs incurred by the Company for inventory are reported as cost of sales or inventory.


Franchise and Royalty Fees


Franchise fee revenue is recognized upon opening of the franchise store. In addition to the initial franchise fee, the Company also recognizes a marketing and promotion fee of one percent (1%) of franchised stores’ gross retail sales and a royalty fee based on gross retail sales. Beginning with Rocky Mountain Chocolate Factory franchise store openings in the third quarter of FY 2004, the Company modified its royalty structure. Under the current structure, the Company recognizes no royalty on franchised stores’ retail sales of products purchased from the Company and recognizes a ten percent (10%) royalty on all other sales of product sold at franchise locations. For franchise stores opened prior to the third quarter of FY 2004 the Company recognizes a royalty fee of five percent (5%) of franchised stores’ gross retail sales. Royalty fees for U-Swirl cafés are based on the rate defined in the acquired contracts for the franchise rights and range from 2.5% to 6% of gross retail sales.


In certain instances we are required to pay a portion of franchise fee revenue, or royalty fees to parties we’ve contracted with to assist in developing and growing a brand. The agreements generally include Development Agents, or commissioned brokers who are paid a portion of the initial franchise fee, a portion of the ongoing royalty fees, or both. When such agreements exist, we report franchise fee and royalty fee revenues net of the amount paid, or due, to the agent/broker.


Use of Estimates


In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates.


Vulnerability Due to Certain Concentrations


Revenue from one customer of the Company’s Manufacturing segment represented approximately $5.2 million or 13% of the Company’s revenues during the year ended February 28, 2015. The Company’s future results may be adversely impacted by a change in the purchases of this customer.


Stock-Based Compensation


At February 28, 2015, the Company had stock-based compensation plans, which currently consists solely of the Company’s 2007 Equity Incentive plan, for employees and non-employee directors which authorized the granting of stock awards.


The Company recognized $865,240, $660,325, and $418,633 related equity-based compensation expense during the years ended February 28, 2015, 2014 and 2013, respectively. Compensation costs related to share-based compensation are generally amortized over the vesting period.


Tax benefits in excess of the compensation cost recognized for stock options are reported as financing cash flows in the accompanying Statements of Cash Flows. The excess tax benefit included in net cash provided by financing activities for the years ended February 28, 2015, 2014 and 2013 was $200,544, $68,832 and $58,377, respectively.


During FY 2015, the Company granted no restricted stock units. During FY 2014, the Company granted 280,900 restricted stock units with a grant date fair value of $3,437,950. There were no stock options granted to employees during FY 2015 or FY 2014. The restricted stock unit grants generally vest 17-20% annually over a period of five to six years. The Company recognized $740,261 of consolidated stock-based compensation expense related to these grants during FY 2015 compared with $572,948 in FY 2014. Total unrecognized stock-based compensation expense of non-vested, non-forfeited shares granted, as of February 28, 2015 was $2,467,019, which is expected to be recognized over the weighted average period of 4 years.


During FY 2015, the Company issued 4,000 fully-vested, unrestricted shares to non-employee directors compared with 4,000 fully-vested, unrestricted shares of stock to non-employee directors in FY 2014. In connection with these non-employee director stock issuances, the Company recognized $47,480 and $48,400 of stock-based compensation expense during FY 2015 and FY 2014, respectively.


Earnings per Share


Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding during each year. Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through stock options and restricted stock units. During FY 2015, FY 2014 and FY 2013, 12,936, 12,936, and 101,661, respectively, of stock options were excluded from diluted shares as their effect was anti-dilutive.


Advertising and Promotional Expenses


The Company expenses advertising costs as incurred. Total advertising expense for RMCF amounted to $244,946, $250,739, and $233,731 for the fiscal years ended February 28, 2015, 2014 and 2013, respectively. Total advertising expense for U-Swirl and its brands amounted to $399,414, $134,192, and $192,088 for the fiscal years ended February 28, 2015, 2014 and 2013, respectively.


Fair Value of Financial Instruments


The Company’s financial instruments consist of cash and cash equivalents, trade receivables, payables, and notes receivable. The fair value of all instruments approximates the carrying value, because of the relatively short maturity of these instruments.


Recent Accounting Pronouncements


In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendments in ASU 2015-03. ASU 2015-03 will be effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact that the adoption of ASU 2015-03 may have on our consolidated financial statements or disclosures.


In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the new standard.


In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” This guidance requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. If such conditions or events exist, disclosures are required that enable users of the financial statements to understand the nature of the conditions or events, management's evaluation of the circumstances and management's plans to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. We will be required to perform an annual assessment of our ability to continue as a going concern when this standard becomes effective for us in the first quarter of our fiscal year ended February 28, 2017. The adoption of this guidance is not expected to impact our financial position, results, operations or cash flows.


Reclassifications


Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported.


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Note 2 - Inventories
12 Months Ended
Feb. 28, 2015
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]

NOTE 2 - INVENTORIES


Inventories consist of the following at February 28:


   

2015

   

2014

 

Ingredients and supplies

  $ 2,755,232     $ 2,531,413  

Finished candy

    2,130,133       1,965,199  

U-Swirl food and packaging

    97,669       118,219  

Reserve for slow moving inventory

    (197,658 )     (204,068 )

Total inventories

  $ 4,785,376     $ 4,410,763  

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Note 3 - Property and Equipment, Net
12 Months Ended
Feb. 28, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment Disclosure [Text Block]

NOTE 3 - PROPERTY AND EQUIPMENT, NET


Property and equipment consists of the following at February 28:


   

2015

   

2014

 

Land

  $ 513,618     $ 513,618  

Building

    4,774,825       4,775,466  

Machinery and equipment

    10,120,865       9,518,832  

Furniture and fixtures

    1,224,433       1,324,846  

Leasehold improvements

    2,056,244       2,489,782  

Transportation equipment

    427,727       394,508  

Capital work in progress

    -       967,937  

Asset impairment

    (290,640 )     -  
      18,827,072       19,984,989  
                 

Less accumulated depreciation

    12,029,536       11,496,791  

Property and equipment, net

  $ 6,797,536     $ 8,488,198  

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Note 4 - Line of Credit and Long-term Debt
12 Months Ended
Feb. 28, 2015
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]

NOTE 4 - LINE OF CREDIT AND LONG-TERM DEBT


Line of Credit


At February 28, 2015, the Company had a $5 million line of credit from Wells Fargo Bank, N.A., collateralized by substantially all of the Company’s assets with the exception of the Company’s retail store assets. Draws may be made under the line at 75% of eligible accounts receivable plus 50% of eligible inventories. Interest on borrowings is at prime (3.25% at February 28, 2015). At February 28, 2015, $5 million was available for borrowings under the line of credit, subject to borrowing base limitations. Terms of the line require that the line be rested (that is, that there be no outstanding balance) for a period of 30 consecutive days during the term of the loan. Additionally, the line of credit is subject to various financial ratio and leverage covenants. At February 28, 2015, the Company was in compliance with all such covenants. The credit line is subject to renewal in July 2015 and we believe it is likely to be renewed on terms similar to current terms.


Effective January 16, 2014, the Company entered into a business loan agreement with Wells Fargo Bank, N.A. (the “Wells Fargo Loan Agreement”) for a $7.0 million line of credit to be used to loan money to U-Swirl to fund the purchase price of business acquisitions by U-Swirl (the “Wells Fargo Loan”). The Company made its first draw of approximately $6.4 million on the Wells Fargo Loan on January 16, 2014 and the first draw was the amount outstanding at February 28, 2014. Interest on the Wells Fargo Loan is at a fixed rate of 3.75% and the maturity date is January 15, 2020. The Wells Fargo Loan may be prepaid without penalty at any time by the Company. The Wells Fargo Loan is collateralized by substantially all of the Company’s assets, including the loan agreement between RMCF and U-Swirl to finance U-Swirl’s acquisitions. Additionally, the Wells Fargo Loan is subject to various financial ratio and leverage covenants. The Wells Fargo Loan Agreement also contains customary representations and warranties, covenants and acceleration provisions in the event of a default by the Company.


Long-term debt consists of the following at February 28:


   

2015

   

2014

 

Note payable in monthly installments of principal and interest at 3.75% per annum through December 2019 collateralized by substantially all business assets.

  $ 6,292,367     $ 6,400,000  

Less current maturities

    1,208,888       108,023  
Long-term obligations   $ 5,083,479     $ 6,291,977  

The following is a schedule by year of maturities of long-term debt for the years ending February 28 or 29:


2016

  $ 1,208,900  

2017

    1,255,700  

2018

    1,304,200  

2019

    1,354,700  

2020

    1,168,867  
Total   $ 6,292,367  

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Note 5 - Commitments and Contingencies
12 Months Ended
Feb. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]

NOTE 5 – COMMITMENTS AND CONTINGENCIES


Operating Leases


The Company conducts its retail operations in facilities leased under five to ten-year non-cancelable operating leases. Certain leases contain renewal options for between five and ten additional years at increased monthly rentals. The majority of the leases provide for contingent rentals based on sales in excess of predetermined base levels.


The following is a schedule by year of future minimum rental payments required under such leases for the years ending February 28 or 29:


2016

  $ 995,000  

2017

    753,000  

2018

    677,000  

2019

    617,000  

2020

    293,000  

Thereafter

    56,000  
Total   $ 3,391,000  

We act as primary lessee of some franchised store premises, which we then sublease to franchisees, but the majority of existing locations are leased by the franchisee directly. Our current policy is not to act as primary lessee on any further franchised locations, except in rare instances. At March 31, 2015, we were the primary lessee at 10 of our 433 franchised stores.


In some instances the Company has leased space for its Company-owned locations that are now occupied by franchisees, or majority owned subsidiaries. When the Company-owned location was sold or transferred, the store was subleased to the franchisee who is responsible for the monthly rent and other obligations under the lease. The Company's liability as primary lessee on sublet franchise outlets, all of which is offset by sublease rentals, is as follows for the years ending February 28 or 29:


2016

  $ 479,000  

2017

    211,000  

2018

    79,000  
Total   $ 769,000  

The following is a schedule of lease expense for all retail operating leases for the three years ended February 28:


   

2015

   

2014

   

2013

 

Minimum rentals

  $ 1,282,363     $ 1,658,710     $ 862,866  

Less sublease rentals

    (468,000 )     (686,000 )     (157,000 )

Contingent rentals

    22,200       22,626       20,399  
    $ 836,563     $ 995,336     $ 726,265  

In FY 2013, the Company renewed an operating lease for warehouse space in the immediate vicinity of its manufacturing operation. The following is a schedule, by year, of future minimum rental payments required under such lease for the years ending February 28 or 29:


2016

  $ 116,000  
2017     121,000  
2018     30,000  
Total   $ 267,000  

The Company also leases trucking equipment under operating leases. The following is a schedule by year of future minimum rental payments required under such leases for the years ending February 28 or 29:


2016

  $ 172,100  

2017

    172,100  

2018

    123,600  

2019

    22,200  
         
Total   $ 490,000  

The following is a schedule of lease expense for trucking equipment operating leases for the three years ended February 28:


   

2015

   

2014

   

2013

 
      185,703       199,894       201,081  

Purchase contracts


The Company frequently enters into purchase contracts of between six to eighteen months for chocolate and certain nuts. These contracts permit the Company to purchase the specified commodity at a fixed price on an as-needed basis during the term of the contract. Because prices for these products may fluctuate, the Company may benefit if prices rise during the terms of these contracts, but it may be required to pay above-market prices if prices fall and it is unable to renegotiate the terms of the contract. Currently the Company has contracted for approximately $798,000 of raw materials under such agreements.


Contingencies


The Company is party to various legal proceedings arising in the ordinary course of business. Management believes that the resolution of these matters will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.


U-Swirl, as part of the business acquisition of CherryBerry (see Note 18), agreed to issue 4,000,000 shares of U-Swirl common stock as a component of the consideration paid for the business assets. The CherryBerry selling parties entered into a one-year lock-up agreement with respect to the 4,000,000 shares of the Company’s common stock (the “CB Shares”) payable at the closing of the CherryBerry Acquisition. The CB Shares payable gave the selling parties voting rights and rights to dividends as of the acquisition date and were therefore included in the calculation of net loss per common share. The CB Shares were issued to the selling parties in February 2015. Following expiration of the lock-up period, if any of the CherryBerry selling parties desire to sell their CB Shares, they must first offer such shares to the Company and then to RMCF, at a price equal to the average of the market prices at the time of sale. If the proceeds from the sale of any of the CB Shares is less than $0.50 per share and the CherryBerry selling parties comply with other terms of the agreement, the Company has agreed to pay a shortfall payment.


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Note 6 - Income Taxes
12 Months Ended
Feb. 28, 2015
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]

NOTE 6 - INCOME TAXES


Income tax expense is comprised of the following for the years ended February 28:


   

2015

   

2014

   

2013

 

Current

                       

Federal

  $ 1,846,365     $ 1,668,259     $ 2,090,996  

State

    246,398       227,904       287,026  

Total Current

    2,092,763       1,896,163       2,378,022  
                         

Deferred

                       

Federal

    (50,603 )     237,538       (1,107,287 )

State

    (4,465 )     20,959       (37,275 )

Total Deferred

    (55,068 )     258,497       (1,144,562 )

Total

  $ 2,037,695     $ 2,154,660     $ 1,233,460  

A reconciliation of the statutory federal income tax rate and the effective rate as a percentage of pretax income is as follows for the years ended February 28:


   

2015

   

2014

   

2013

 

Statutory rate

    34.0 %     34.0 %     34.0 %

State income taxes, net of federal benefit

    2.8 %     3.1 %     4.8 %

Domestic production deduction

    (1.6% )     (2.4% )     (3.2% )

Other

    0.1 %     0.1 %     1.5 %

Acquisition related expenses

    -       -       6.4 %

U-Swirl loss carryforward recognized

    (3.0% )     -       -  

Valuation allowance, U-Swirl Consolidated loss

    3.0 %     5.9 %     4.2 %

Effective Rate

    35.3 %     40.7 %     47.7 %

The decrease in the effective tax rate for the year ended February 28, 2015, compared to the prior year, is primarily due to the tax consequences of a controlling interest in U-Swirl, and the associated increase in the effective rate for the years ended February 28, 2014 and 2013. In FY 2014 we did not realize a tax benefit from the U-Swirl taxable loss causing our effective rate to increase for the year. During FY 2015 the taxable loss at U-Swirl was lower, resulting in a decrease to our effective rate. The acquisition of our interest in U-Swirl resulted in non-deductible acquisition related expenses of approximately $268,000 for the fiscal year ended February 28, 2013. The Company also recognized a gain of $222,000 during the year ended February 28, 2013 for purposes of income tax reporting, the result of the transfer of ALY franchise rights to U-Swirl. U-Swirl and RMCF will continue to file separate income tax returns for each entity. U-Swirl has a history of net losses and does not expect to realize the tax benefit of those losses. The consolidation of U-Swirl net loss into the results of RMCF did not reduce the taxable income for RMCF in the current or prior years.


The components of deferred income taxes at February 28 are as follows:


Deferred Tax Assets

 

2015

   

2014

 

Allowance for doubtful accounts and notes

  $ 248,067     $ 219,108  

Inventories

    73,133       75,505  

Accrued compensation

    216,469       210,290  

Loss provisions and deferred income

    129,446       143,877  

Self-insurance accrual

    21,543       27,240  

Amortization, design costs

    36,688       54,312  

Restructuring charges

    148,494       1,850  

U-Swirl accumulated net loss

    349,010       689,590  

Valuation allowance, U-Swirl accumulated net loss

    (349,010 )     (689,590 )

Net deferred tax assets

    873,840       732,182  
                 

Deferred Tax Liabilities

               

Depreciation and amortization

    (1,234,110 )     (1,133,467 )

Prepaid expenses

    (96,280 )     (110,333 )

Net deferred tax liability

  $ (1,330,390 )   $ (1,243,800 )
                 

Current deferred tax assets

  $ 572,957     $ 538,871  

Non-current deferred tax liabilities

    (1,029,507 )     (1,050,489 )

Net deferred tax liability

  $ (456,550 )   $ (511,618 )

The Company files income tax returns in the U.S. federal and various state taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before FY 2010.


Realization of the Company's deferred tax assets is dependent upon the Company generating sufficient taxable income, in the appropriate tax jurisdictions, in future years to obtain benefit from the reversal of net deductible temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. Management believes that it is more likely than not that RMCF will realize the benefits of its deferred tax assets as of February 28, 2015.


The Company accounts for uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. As such, the Company is required to make judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company's judgments which can materially affect amounts recognized in the balance sheets and statements of operations. The result of the assessment of the Company's tax positions did not have an impact on the consolidated financial statements for the years ended February 28, 2015 or 2014. The Company does not have any significant unrecognized tax benefits and does not anticipate a significant increase or decrease in unrecognized tax benefits within the next twelve months. Amounts are recognized for income tax related interest and penalties as a component of general and administrative expense in the statement of income and are immaterial for years ended February 28, 2015 and 2014.


As of February 28, 2015, U-Swirl was not consolidated with us for purposes of filing federal income tax. U-Swirl files a separate federal tax return and has its own federal loss carry forward. As of February 28, 2015, U-Swirl had recorded a full valuation allowance related to the realization of its deferred income tax assets.


In accordance with Section 382 of the Internal Revenue Code, deductibility of U-Swirl’s U.S. net operating loss carryovers may be subject to annual limitation in the event of a change in control. We have performed a preliminary evaluation as to whether a change in control has taken place, and have concluded that there was a change of control with respect to the net operating losses of U-Swirl when the Company acquired its controlling ownership interest in January 2013.


We estimate that the potential future tax deductions of U-Swirl accumulated net operating losses, limited by section 382, to be approximately $970,000 with a resulting deferred tax asset of approximately $350,000. We have recorded a valuation allowance for this amount to reflect the likelihood of realization of this deferred tax asset.


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Note 7 - Stockholders' Equity
12 Months Ended
Feb. 28, 2015
Stockholders' Equity Note [Abstract]
Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 – STOCKHOLDERS’ EQUITY


Cash Dividend


The Company paid a quarterly cash dividend of $0.11 per common share on June 14, 2013, September 13, 2013, December 13, 2013 and March 14, 2014 to shareholders of record on June 4, 2013, September 3, 2013, November 29, 2013 and February 28, 2014, respectively. The Company paid a quarterly cash dividend of $0.11 per common share on June 13, 2014, September 12, 2014 and December 12, 2014 to shareholders of record on June 3, 2014, September 2, 2014 and November 28, 2014. The Company paid a quarterly cash dividend of $0.12 per common share on March 13, 2015 to shareholders of record on February 27, 2015.


Future declarations of dividends will depend on, among other things, the Company's results of operations, financial condition, capital requirements, and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the shareholders.


Stock Repurchases


On July 15, 2014, the Company announced a plan to purchase up to $3.0 million of its common stock in the open market or in private transactions, whenever deemed appropriate by management. On January 13, 2015, the Company announced a plan to purchase up to an additional $2,058,000 of its common stock under the repurchase plan. Between July 15, 2014 and July 31, 2014, the Company repurchased 55,000 shares under the plan at an average price of $12.58 per share. Between September 26, 2014 and November 28, 2014, the Company repurchased 99,511 shares under the plan at an average price of $12.19 per share. Between December 1, 2014 and February 9, 2015, the Company repurchased 91,595 shares under the plan at an average price of $13.35 per share. As of February 28, 2015, approximately $1,930,000 remains available under the plan for further stock repurchases.


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Note 8 - Stock Compensation Plans
12 Months Ended
Feb. 28, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8 - STOCK COMPENSATION PLANS


In FY 2014, shareholders approved an amendment of the 2007 Equity Incentive Plan (the “2007 Plan”). The 2007 Plan allows awards of stock options, stock appreciation rights, stock awards, restricted stock and stock units, performance shares and performance units, and other stock- or cash-based awards. As of February 28, 2015, 500,140 restricted stock units, 12,936 stock options and 28,000 unrestricted shares have been awarded under the 2007 Plan and 315,653 shares of common stock are available for award under the 2007 Plan consisting of 300,000 shares originally authorized, 85,340 previously reserved for issuance under earlier plans, 300,000 shares authorized upon amendment and 171,389 shares forfeited under the 2007 Plan and suspended plans, less shares awarded under the 2007 Plan.


Options granted may not have a term exceeding ten years under the 2007 Plan. Options representing the right to purchase 12,936 shares of the Company’s common stock were outstanding under the 2007 Plan, at February 28, 2015.


Information with respect to stock option awards outstanding under the 2007 Plan at February 28, 2015, and changes for the three years then ended was as follows:


   

Twelve Months Ended

 
   

February 28:

 
   

2015

   

2014

   

2013

 

Outstanding stock options at beginning of year:

    155,880       270,945       307,088  

Granted

    -       -       -  

Exercised

    (142,944 )     (26,340 )     (21,191 )

Cancelled/forfeited

    -       (88,725 )     (14,952 )

Outstanding stock options as of February 28 or 29:

    12,936       155,880       270,945  
                         

Weighted average exercise price

  $ 12.94     $ 8.01     $ 11.17  

Weighted average remaining contractual term (in years)

    1.04       0.45       1.94  

Information with respect to restricted stock unit awards outstanding under the 2007 Plan at February 28, 2015, and changes for the three years then ended was as follows:


   

Twelve Months Ended

 
   

February 28:

 
   

2015

   

2014

   

2013

 

Outstanding non-vested restricted stock units at beginning of year:

    295,040       57,030       101,980  

Granted

    -       280,900       -  

Vested

    (56,199 )     (41,390 )     (44,190 )

Cancelled/forfeited

    (1,200 )     (1,500 )     (760 )

Outstanding non-vested restricted stock units as of February 28 or 29:

    237,641       295,040       57,030  
                         

Weighted average grant date fair value

  $ 12.13     $ 12.09     $ 9.22  

Weighted average remaining vesting period (in years)

    4.08       4.99       1.14  

Additional information about stock options outstanding at February 28, 2015 is summarized as follows:


   

Options Outstanding

 

Exercise price

 

Number exercisable

   

Weighted average remaining contractual life in years

   

Weighted average exercise price

 

$14.695

    12,936       1.04     $ 14.70  

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Note 9 - Operating Segments
12 Months Ended
Feb. 28, 2015
Segment Reporting [Abstract]
Segment Reporting Disclosure [Text Block]

NOTE 9 - OPERATING SEGMENTS


The Company classifies its business interests into five reportable segments: Rocky Mountain Chocolate Factory, Inc. Franchising, Manufacturing, Retail Stores, U-Swirl operations and Other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to these consolidated financial statements. The Company evaluates performance and allocates resources based on operating contribution, which excludes unallocated corporate general and administrative costs and income tax expense or benefit. The Company’s reportable segments are strategic businesses that utilize common merchandising, distribution, and marketing functions, as well as common information systems and corporate administration. All inter-segment sales prices are market based. Each segment is managed separately because of the differences in required infrastructure and the differences in products and services:


FY 2015

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 5,976,964     $ 27,459,828     $ 2,134,976     $ 7,501,943     $ -     $ 43,073,711  

Intersegment revenues

    (342 )     (1,564,993 )     -       -       -       (1,565,335 )

Revenue from external customers

    5,976,622       25,894,835       2,134,976       7,501,943       -       41,508,376  

Segment profit (loss)

    2,783,734       6,993,693       (51,803 )     (245,546 )     (3,699,637 )     5,780,441  

Total assets

    1,193,407       12,155,004       1,157,674       12,424,801       7,207,327       34,138,213  

Capital expenditures

    28,806       378,060       41,361       61,053       117,464       626,744  

Total depreciation & amortization

    41,228       395,864       35,531       813,172       154,653       1,440,448  

FY 2014

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 6,045,675     $ 27,101,515     $ 2,391,627     $ 5,528,649     $ -     $ 41,067,466  

Intersegment revenues

    -       (1,882,659 )     -       -       -       (1,882,659 )

Revenue from external customers

    6,045,675       25,218,856       2,391,627       5,528,649       -       39,184,807  

Segment profit (loss)

    2,798,934       7,189,181       (192,966 )     (806,891 )     (3,699,094 )     5,289,164  

Total assets*

    1,223,605       11,966,991       1,278,862       13,245,175       7,438,406       35,153,039  

Capital expenditures

    49,040       931,102       98,115       1,295,105       144,955       2,518,317  

Total depreciation & amortization

    37,089       294,986       62,039       487,073       145,588       1,026,775  

* February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.


FY 2013

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 6,047,039     $ 26,451,612     $ 5,395,805     $ 505,956     $ -     $ 38,400,412  

Intersegment revenues

    -       (2,085,211 )     -       -       -       (2,085,211 )

Revenue from external customers

    6,047,039       24,366,401       5,395,805       505,956       -       36,315,201  

Segment profit (loss)

    2,494,868       6,853,360       (2,251,581 )     (320,446 )     (4,192,707 )     2,583,494  

Total assets

    1,302,094       10,510,745       1,305,006       3,446,319       7,269,781       23,833,945  

Capital expenditures

    25,985       277,675       290,330       2,719       146,162       742,871  

Total depreciation & amortization

    39,029       290,076       383,550       70,146       152,577       935,378  

During FY 2013, the information reported in our “U-Swirl” segment includes data from January 14, 2013 through February 28, 2013, the period that was consolidated within our financial results.


Revenue from one customer of the Company’s Manufacturing segment represents approximately $5.2 million of the Company’s revenues from external customers during the year ended February 28, 2015.


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Note 10 - Supplemental Cash Flow Information
12 Months Ended
Feb. 28, 2015
Supplemental Cash Flow Elements [Abstract]
Cash Flow, Supplemental Disclosures [Text Block]

NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION


For the three years ended February 28:


Cash paid (received) for:

 

2015

   

2014

   

2013

 

Income taxes paid

  $ 1,896,274     $ 2,417,238     $ 1,173,717  

Interest

    193,022       20,000       -  

Accrued Inventory

    245,183       246,647       260,441  
                         

Non-Cash Financing Activities:

                       

Dividend payable

    721,536       675,422       667,532  
                         

Non-Cash Investing Activities:

                       

Sale or distribution of assets in exchange for notes receivable

    414,353       -       -  

Acquired interest in U-Swirl

    -       -       800,000  

Accrued capital expenditures

  $ -     $ 175,000     $ -  

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Note 11 - Employee Benefit Plan
12 Months Ended
Feb. 28, 2015
Disclosure Text Block Supplement [Abstract]
Compensation and Employee Benefit Plans [Text Block]

NOTE 11 - EMPLOYEE BENEFIT PLAN


The Company has a 401(k) plan called the Rocky Mountain Chocolate Factory, Inc. 401(k) Plan. Eligible participants are permitted to make contributions up to statutory limits. The Company makes a matching contribution, which vests ratably over a 3-year period, and is 25% of the employee’s contribution up to a maximum of 1.5% of the employee’s compensation. During the years ended February 28, 2015, 2014 and 2013, the Company’s contribution was approximately $60,000, $60,000, and $50,000, respectively, to the plan.


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Note 12 - Summarized Quarterly Data (Unaudited)
12 Months Ended
Feb. 28, 2015
Quarterly Financial Information Disclosure [Abstract]
Quarterly Financial Information [Text Block]

NOTE 12 – SUMMARIZED QUARTERLY DATA (UNAUDITED)


Following is a summary of the quarterly results of operations for the fiscal years ended February 28, 2015 and 2014:


Fiscal Quarter


   

First

   

Second

   

Third

   

Fourth

   

Total 

 

2015

                                       

Total revenue

  $ 10,322,206     $ 9,457,448     $ 10,561,562     $ 11,167,160     $ 41,508,376  

Gross margin before depreciation

    3,017,580       2,806,058       3,056,105       3,005,248       11,884,991  

Net income (loss)

    711,334       877,356       962,378       1,386,772       3,937,840  

Basic earnings (loss) per share

    0.12       0.14       0.16       0.23       0.64  

Diluted earnings (loss) per share

    0.11       0.14       0.15       0.22       0.61  

Fiscal Quarter


   

First

   

Second

   

Third

   

Fourth

   

Total 

 

2014

                                       

Total revenue

  $ 10,177,862     $ 8,663,161     $ 9,279,994     $ 11,063,790     $ 39,184,807  

Gross margin before depreciation

    3,151,525       2,985,223       2,739,681       3,172,433       12,048,862  

Net income

    1,179,307       1,027,784       699,174       1,486,179       4,392,444  

Basic earnings per share

    0.19       0.17       0.11       0.24       0.72  

Dilute earnings per share

    0.19       0.16       0.11       0.23       0.68  

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Note 13 - Goodwill and Intangible Assets
12 Months Ended
Feb. 28, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 13 – GOODWILL AND INTANGIBLE ASSETS


Intangible assets consist of the following at February 28:


            2015     2014  
   

Amortization Period (in years)

   

Gross Carrying Value

   

Accumulated Amortization

   

Gross Carrying Value

   

Accumulated Amortization

 

Intangible assets subject to amortization

                                       

Store design

    10     $ 220,778     $ 208,152     $ 220,778     $ 206,652  

Packaging licenses

    3-5       120,830       120,830       120,830       120,830  

Packaging design

    10       430,973       430,973       430,973       430,973  

Trademark/Non-competition agreements*

    5-20       459,340       31,538       459,340       5,283  

Franchise Rights*

    20       5,850,290       410,830       5,704,034       90,786  

Total

            7,082,211       1,202,323       6,935,955       854,524  

Intangible assets not subject to amortization Franchising segment-

                                       

Company stores goodwill

            1,122,328       267,020       1,208,328       267,020  

Franchising goodwill*

            2,202,529       197,682       2,202,529       197,682  

Manufacturing segment-Goodwill

            295,000       197,682       295,000       197,682  

Trademark-indefinite life

            20,000       -       20,000       -  

Total

            3,639,857       662,384       3,725,857       662,384  
                                         

Total intangible assets

          $ 10,722,068     $ 1,864,707     $ 10,661,812     $ 1,516,908  

* February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.


Effective March 1, 2002, under ASC Topic 350, all goodwill with indefinite lives is no longer subject to amortization. Accumulated amortization related to intangible assets not subject to amortization is a result of amortization expense related to indefinite life goodwill incurred prior to March 1, 2002.


Amortization expense related to intangible assets totaled $361,723, $97,578, and $8,316 during the fiscal years ended February 28, 2015, 2014 and 2013, respectively.


At February 28, 2015, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following:


2016

  $ 369,864  

2017

    401,872  

2018

    417,972  

2019

    424,402  

2020

    411,245  

Thereafter

    3,854,533  

Total

  $ 5,879,888  

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Note 14 - Restructuring and Acquisition Related Charges
12 Months Ended
Feb. 28, 2015
Restructuring and Related Activities [Abstract]
Restructuring and Related Activities Disclosure [Text Block]

NOTE 14 – RESTRUCTURING AND ACQUISITION RELATED CHARGES


On January 17, 2014, U-Swirl entered into an Asset Purchase Agreement with CherryBerry, which was the franchisor of self-serve frozen yogurt retail stores branded as “CherryBerry.” Pursuant to the CherryBerry Purchase Agreement, U-Swirl purchased certain assets of CherryBerry used in its business of franchising frozen yogurt stores, including all of its franchise rights and one company-owned store. U-Swirl also entered into an Asset Purchase Agreement with Yogli Mogli, which was the franchisor of self-serve frozen yogurt retail stores branded as “Yogli Mogli”. Pursuant to the Yogli Mogli Purchase Agreement, U-Swirl purchased certain assets of Yogli Mogli used in its business of franchising frozen yogurt stores, including all of its franchise rights and four company-owned stores. On February 20, 2014, U-Swirl entered into an Asset Purchase Agreement to acquire the business assets of Fuzzy Peach Franchising, LLC. The acquisition of all intellectual property and worldwide franchise and license rights includes the rights associated with 17 Fuzzy Peach Frozen Yogurt stores. Associated with these transactions, the Company recorded net restructuring charges of $124,551 and $786,013 during the years ended February 28, 2015 and 2014, respectively.


On September 4, 2014, Ulderico Conte, Henry E. Cartwright and Terry A. Cartwright resigned as directors of U-Swirl. In addition, Messrs. Conte, H. Cartwright and T. Cartwright resigned as officers of U-Swirl. Also on September 4, 2014, the U-Swirl Board of Directors appointed Bryan J. Merryman as the Chairman of the Board, replacing Franklin E. Crail. Mr. Merryman currently serves as the Chief Operating Officer and Chief Financial Officer of the Company.


In connection with these management changes, U-Swirl announced an operational restructuring designed to enhance U-Swirl’s operating efficiencies, improve its franchise support capabilities, and rationalize its cost structure. This restructuring resulted in expense associated with termination of the employment agreements with the named officers, severance payments for other employees and expense associated with the impairment of certain long-lived leasehold improvement, property and equipment. The Company recorded restructuring charges of $503,526 during year ended February 28, 2015 associated with this operational restructuring.


As described in Note 1 above, effective March 1, 2015, the Company was reorganized to create a holding company structure pursuant to the Agreement and Plan of Merger, dated as of November 10, 2014, among Rocky Mountain Chocolate Factory, Inc., a Colorado corporation, Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, and RKB Merger Corp. In connection with the holding company reorganization, the Company recorded restructuring fees of $179,399 during the year ended February 28, 2015.


Restructuring and acquisition charges incurred at February 28, 2015 and 2014 were comprised of the following:


   

2015

   

2014

 

Professional fees

  $ 284,275     $ 763,168  

Severance/transitional compensation

    212,027       -  

Leasehold improvements, property and equipment impairment of long-lived assets

    243,000       -  

Provision for termination of contractual obligations

    -       22,845  

Acceleration of restricted stock unit vesting

    65,049       -  

Other

    3,125       -  
                 

Total

  $ 807,476     $ 786,013  

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Note 15 - Related Party Transactions
12 Months Ended
Feb. 28, 2015
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]

NOTE 15 – RELATED PARTY TRANSACTIONS


Our President and Chief Executive Officer has members of his immediate family with ownership interests in retail marketing businesses. These businesses have, on occasion, provided services to the Company and may provide services in the future. For the year ended February 28, 2015, the Company paid $15,300 and no amount was recorded to accounts payable that related to these businesses. Transactions with these businesses have been immaterial to our results of operations.


During the year ended February 28, 2015 we entered into stock purchase agreements with each of (i) Franklin Crail, the Company’s Chief Executive Officer, President and Chairman of the Board, (ii) Bryan Merryman, the Company’s Chief Operating Officer, Chief Financial Officer, Treasurer and a director, and (iii) Edward Dudley, the Company’s Senior Vice President - Sales and Marketing, pursuant to which the Company purchased an aggregate of 80,000 shares of the Company’s common stock from Messrs. Crail, Merryman and Dudley (the “Stock Purchase Agreements”) at an average price of $12.32 per share. The price the Company paid for the shares was at a 3% discount to the closing price of the Company’s common stock on the transaction date.


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Note 16 - Subsequent Events
12 Months Ended
Feb. 28, 2015
Subsequent Events [Abstract]
Subsequent Events [Text Block]

NOTE 16 – SUBSEQUENT EVENTS


On May 21, 2015, the Company announced that its Board of Directors has authorized the repurchase of up to $3.0 million of the Company’s outstanding common stock in the open market, or in private transactions, whenever deemed appropriate by management. The Company also announced that its Board of Directors has declared a first quarter FY2016 cash dividend of $0.12 per common share outstanding. The cash dividend will be payable June 12, 2015 to shareholders of record at the close of business June 2, 2015.


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Note 17 - Net Income and Transfers (to) From Non-controlling Interest
12 Months Ended
Feb. 28, 2015
Noncontrolling Interest [Abstract]
Noncontrolling Interest Disclosure [Text Block]

NOTE 17 – NET INCOME AND TRANSFERS (TO) FROM NON-CONTROLLING INTEREST


The effect of changes in the Company’s ownership interest in U-Swirl was comprised of the following at February 28, 2015 and 2014:


   

2015

   

2014

 

Net Income (loss) attributable to RMCF shareholders

    (117,140 )     (868,543 )

Transfers from non-controlling interest

               

U-Swirl expense recorded for equity based compensation

    61,008       62,000  

U-Swirl common stock issued, at fair value, for business acquisitions*

    -       750,036  

U-Swirl, Inc common stock issued upon the exercise of stock options and warrants

    357,158       34,189  

Change to ownership interest resulting from stock issuances

    (35,860 )     (347,723 )

Net transfers from non-controlling interest

    382,306       498,502  

Changes from net loss and transfers from non-controlling interest

  $ 265,166     $ (370,041 )

* February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.


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Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach
12 Months Ended
Feb. 28, 2015
Business Combinations [Abstract]
Business Combination Disclosure [Text Block]

NOTE 18– ACQUISITION OF CHERRYBERRY, YOGLI MOGLI AND FUZZY PEACH


On January 17, 2014, U-Swirl entered into an Asset Purchase Agreement with CherryBerry and its affiliates (the “Cherryberry Purchase Agreement”), which was the franchisor of self-serve frozen yogurt cafés branded as “CherryBerry.” Pursuant to the CherryBerry Purchase Agreement, U-Swirl purchased certain assets of CherryBerry used in its business of franchising frozen yogurt cafés, including all of its franchise rights and one company-owned café. The assets were acquired for approximately $4.25 million in cash and 4 million shares of U-Swirl common stock.


On January 17, 2014, U-Swirl also entered into an Asset Purchase Agreement with Yogli Mogli LLC and its affiliates (the “Yogli Mogli Purchase Agreement”), which was the franchisor of self-serve frozen yogurt cafés branded as “Yogli Mogli.” Pursuant to the Yogli Mogli Purchase Agreement, U-Swirl purchased certain assets of Yogli Mogli used in its business of franchising frozen yogurt cafés, including all of its franchise rights and four company-owned cafés. The assets were acquired for approximately $2.15 million in cash and $200,000 in shares of U-Swirl common stock. During the year ended February 28, 2015, U-Swirl assumed a net liability of $149,529 for an un-funded gift card liability related to Yogli-Mogli franchise operations. The Company has withheld the issuance of $200,000 in shares of U-Swirl common stock as a result of its realization of this unfunded liability. Management believes that is it unlikely that the common stock issuance contemplated by the Yogli Mogli Purchase Agreement is issued, or that the gift card liability is funded. These facts have caused Management to revise the valuation of the Yogli Mogli purchase as reflected within this note to the consolidated financial statements.


On February 20, 2014, U-Swirl entered into an Asset Purchase Agreement to acquire the business assets of Fuzzy Peach Franchising, LLC. The acquisition of all intellectual property and worldwide franchise and license rights includes the rights associated with 17 Fuzzy Peach Frozen Yogurt stores. U-Swirl purchased the Fuzzy Peach Franchising, LLC assets for $481,000 in cash paid at the time of closing, plus an earn-out that could increase the purchase price by up to another $349,000 based upon royalty income generated by Fuzzy Peach stores over the next twelve months. During the year ended February 28, 2015, we recorded a liability of $146,257 associated with this earn-out.


A preliminary purchase price allocation was completed at February 28, 2014 and a final measurement period was completed during the quarter ended February 28, 2015 when the fair value of consideration paid and contingent consideration were finalized. The foregoing resulted in a retrospective reallocation of these values reported at February 28, 2014. This reallocation did not result in any changes to operating results for FY 2014 because the adjustment to amortization resulting from the retrospective reallocation was immaterial. The final consideration value was allocated to assets acquired and liabilities assumed and a portion of the total purchase consideration was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the acquisition date. Prior year amounts were revised to reflect these changes as of the date of the acquisition, resulting in reductions to Trademarks, Franchise rights, Non-competition agreements and Goodwill as of February 28, 2014.


The following tables summarize the adjustments that were made to the preliminary purchase price allocation for the Yogli Mogli and CherryBerry acquisitions.


Yogli Mogli

 

Preliminary

   

Adjustment

   

Final

 

Café Store Assets

  $ 1,003,000     $ -     $ 1,003,000  

Trademarks

    156,000       (14,000 )     142,000  

Franchise agreements

    1,201,000       (78,000 )     1,123,000  

Non-Competition agreements

    6,000       -       6,000  

Goodwill

    54,500       29,029       83,529  
    $ 2,420,500     $ (62,971 )   $ 2,357,529  

CherryBerry

 

Preliminary

   

Adjustment

   

Final

 

Café store assets

  $ 238,000     $ -     $ 238,000  

Café store goodwill

    23,000       -       23,000  

Trademarks

    405,000       (118,000 )     287,000  

Franchise rights

    3,615,000       (798,000 )     2,817,000  

Non-compete agreements

    23,000       (2,000 )     21,000  

Goodwill

    3,006,000       (1,182,000 )     1,824,000  
    $ 7,310,000     $ (2,100,000 )   $ 5,210,000  

The purchase price allocation, including the fair value consideration paid, contingent consideration, the assets acquired and liabilities assumed and allocated a portion of the total purchase consideration to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the acquisition date. The excess of the total purchase consideration over the aggregate estimated fair values was recorded as goodwill. Goodwill represents the synergies that the Company believes will arise from the acquisition transactions. All of the goodwill generated in this acquisition is deductible for tax purposes. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed:


   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Assets acquired – Transaction date

  $ 5,210,000     $ 2,357,529     $ 481,497     $ 8,049,026  

Assets acquired – Earn out

    -       -       146,257       146,257  

Lease liabilities assumed

    -       (58,000 )     -       (58,000 )

Gift card liabilities assumed

    -       (149,529 )     -       (149,529 )
                                 

Total purchase price

  $ 5,210,000     $ 2,150,000     $ 627,754     $ 7,987,754  

Included in the purchase price allocation is an amount related to the fair value of the U-Swirl common stock issued as consideration for the acquisitions. The fair value of the securities was based on Financial Accounting Standard Board’s Accounting Standards Codification (“ASC”) 820-10-35-2, Fair Value Measurements and Disclosures as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”


The assets acquired were made up of the following during the year ended February 28, 2015:


   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Café store assets

  $ 238,000     $ 1,003,000     $ -     $ 1,241,000  

Café store goodwill

    23,000       -       -       23,000  

Trademarks

    287,000       142,000       -       429,000  

Franchise rights

    2,817,000       1,123,000       627,754       4,567,754  

Non-competition agreements

    21,000       6,000       -       27,000  

Goodwill

    1,824,000       83,529       -       1,907,529  
                                 

Total assets acquired

  $ 5,210,000     $ 2,357,529     $ 627,754     $ 8,195,283  

The consideration for the purchase price was made up the following assets during the year ended February 28, 2015:


   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Common stock – U-Swirl

  $ 960,000     $ -     $ -     $ 960,000  

Cash

    4,250,000       2,150,000       627,754       7,027,754  
                                 

Total consideration paid

  $ 5,210,000     $ 2,150,000     $ 627,754     $ 7,987,754  

As a part of these acquisitions, the Company recognized $124,551 and $786,475 as acquisition related costs in the line item “Restructuring and acquisition related charges” on the Statements of Income for the years ended February 28, 2015 and February 28, 2014, respectively. The fair value of U-Swirl common stock was $0.24 and was determined by fair value measurement as defined by ASC 820-10-35-2. Fair Value Measurements and Disclosure is “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The valuation was performed on a minority, marketable basis. The Company performed this valuation because it did not believe that the quoted market price was indicative of fair value. Primarily the Company believed that the quoted market price did not accurately represent the present value of future cash flows associated with the acquisitions, or the dilutive effect of stock and convertible debt issued to fund these acquisitions.


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Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Feb. 28, 2015
Valuation and Qualifying Accounts [Abstract]
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

SCHEDULE II - Valuation and Qualifying Accounts


   

Balance at Beginning of Period

   

Additions Charged to Costs & Exp.

   

Deductions

   

Balance at End of Period

 

Year Ended February 28, 2015

                               

Valuation Allowance for Accounts and Notes Receivable

    600,930       214,600       86,470       729,060  
                                 

Year Ended February 28, 2014

                               

Valuation Allowance for Accounts and Notes Receivable

    595,588       216,000       210,658       600,930  
                                 

Year Ended February 28, 2013

                               

Valuation Allowance for Accounts and Notes Receivable

    584,151       330,000       318,563       595,588  

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Accounting Policies, by Policy (Policies)
12 Months Ended
Feb. 28, 2015
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]

Consolidation


Management accounts for the activities of the Company and its subsidiaries, and the accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. As described above, on January 14, 2013, the Company acquired a controlling interest in U-Swirl. Prior to January 14, 2013, the Company’s consolidated financial statements exclude the financial information of U-Swirl. Beginning on January 14, 2013, the results of operations, assets and liabilities of U-Swirl have been included in these consolidated financial statements.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents


The Company considers all highly liquid instruments purchased with an original maturity of six months or less to be cash equivalents. The Company classifies certain instruments with a maturity of between three and six months to be cash equivalents because these instruments allow for early termination with minimal penalty and are readily convertible to known amounts of cash. As of February 28, 2015 and February 28, 2014, the Company held a Certificate of Deposit with an original maturity date of six-months totaling $108,000 and classified this amount as a cash equivalent. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. As of the balance sheet date, and periodically throughout the year, the Company has maintained balances in various operating accounts in excess of federally insured limits. This amount was approximately $6.5 million at February 28, 2015.

Receivables, Policy [Policy Text Block]

Accounts and Notes Receivable


In the normal course of business, we extend credit to customers, primarily franchisees that satisfy pre-defined credit criteria. The Company believes that it has limited concentration of credit risk primarily because its receivables are secured by the assets of the franchisees to which the Company ordinarily extends credit, including, but not limited to, their franchise rights and inventories. An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable, assessments of collectability based on historical trends, and an evaluation of the impact of current and projected economic conditions. The process by which the Company performs its analysis is conducted on a customer by customer, or franchisee by franchisee, basis and takes into account, among other relevant factors, sales history, outstanding receivables, customer financial strength, as well as customer specific and geographic market factors relevant to projected performance. The Company monitors the collectability of its accounts receivable on an ongoing basis by assessing the credit worthiness of its customers and evaluating the impact of reasonably likely changes in economic conditions that may impact credit risks. Estimates with regard to the collectability of accounts receivable are reasonably likely to change in the future. At February 28, 2015, the Company has $1,060,057 of notes receivable outstanding and an allowance for doubtful accounts of $32,262 associated with these notes. The notes require monthly payments and bear interest rates ranging from 4.5% to 8%. The notes mature through July, 2019 and approximately $954,000 of notes receivable are secured by the assets financed.

Inventory, Policy [Policy Text Block]

Inventories


Inventories are stated at the lower of cost or market. An inventory reserve is established to reduce the cost of obsolete, damaged and excess inventories to the lower of cost or market based on actual differences. This inventory reserve is determined through analysis of items held in inventory, and, if the recorded value is higher than the market value, the Company records an expense to reduce inventory to its actual market value. The process by which the Company performs its analysis is conducted on an item by item basis and takes into account, among other relevant factors, market value, sales history and future sales potential. Cost is determined using the first-in, first-out method.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment and Other Assets


Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method based upon the estimated useful life of the asset, which range from five to thirty-nine years. Leasehold improvements are amortized on the straight-line method over the lives of the respective leases or the service lives of the improvements, whichever is shorter.


The Company reviews its long-lived assets through analysis of estimated fair value, including identifiable intangible assets, whenever events or changes indicate the carrying amount of such assets may not be recoverable. The Company’s policy is to review the recoverability of all assets, at a minimum, on an annual basis.

Income Tax, Policy [Policy Text Block]

Income Taxes


We provide for income taxes pursuant to the liability method. The liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset, including the utilization of a net operating loss or other carryforward prior to its expiration, is more likely than not. Due to historical losses, we established a full valuation allowance on our deferred tax assets. The Company's temporary differences are listed in Note 6.

Revenue Recognition, Gift Cards [Policy Text Block]

Gift card breakage


The Company and our franchisees sell gift cards that are redeemable for product in our stores. The Company manages the gift card program, and therefore collects all funds from the activation of gift cards and reimburses franchisees for the redemption of gift cards in their stores. A liability for unredeemed gift cards is included in accounts payable and accrued liabilities in the balance sheets.


There are no expiration dates on our gift cards, and we do not charge any service fees. While our franchisees continue to honor all gift cards presented for payment, we may determine the likelihood of redemption to be remote for certain cards due to long periods of inactivity. The Company is in the process of accumulating sufficient historical redemption patterns to calculate breakage estimates related to unredeemed gift cards. This breakage rate is based on a percentage of sales when the likelihood of the redemption of the gift card becomes remote. Gift card breakage will be recognized over the same performance period, and in the same proportion, that the Company’s data has demonstrated that gift cards are redeemed. As the Company is in the process of accumulating sufficient historical redemption patterns to calculate breakage estimates, the Company did not recognize gift card breakage during the year ended February 28, 2015 or 2014. Accrued gift card liability was $2,611,774 and $2,091,074 at February 28, 2015 and 2014, respectively, and is included in accounts payable and accrued liabilities.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill


Goodwill arose from three transaction types. The first type was the result of the incorporation of the Company after its inception as a partnership. The goodwill recorded was the excess of the purchase price of the Company over the fair value of its assets. The Company has allocated this goodwill equally between its Franchising and Manufacturing operations. The second type was the purchase of various retail stores, either individually or as a group, for which the purchase price was in excess of the fair value of the assets acquired. Finally, goodwill arose from business acquisitions, where the fair value of the consideration given for acquisition exceeded the fair value of the identified assets net of liabilities.


The Company performs a goodwill impairment test on an annual basis or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. Recoverability of goodwill is evaluated through comparison of the fair value of each of our reporting units with its carrying value. To the extent that a reporting unit’s carrying value exceeds the implied fair value of its goodwill, an impairment loss is recognized. The Company performed impairment testing with no impact to its financial results for the years ended February 28, 2015 and 2014. See note 18 for additional discussion of goodwill and intangible assets.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Franchise Rights


Franchise rights arose from the entry into agreements to acquire substantially all of the franchise rights of Yogurtini, CherryBerry, Fuzzy Peach and Yogli Mogli (see Note 18). Franchise rights are amortized over a period of 20 years.

Insurance and Self-Insurance Reserves [Policy Text Block]

Insurance and Self-Insurance Reserves


The Company uses a combination of insurance and self-insurance plans to provide for the potential liabilities for workers’ compensation, general liability, property insurance, director and officers’ liability insurance, vehicle liability and employee health care benefits. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other assumptions. While the Company believes that its assumptions are appropriate, the estimated accruals for these liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends.

Business Combinations Policy [Policy Text Block]

Business Combinations


The Company accounts for business combinations using the acquisition method. Under the acquisition method, the purchase price of the acquisition is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. Fair values are derived from various observable and unobservable inputs and assumptions. The Company utilizes third-party valuation specialists to assist in the allocation. Initial purchase price allocations are preliminary and are subject to revision within the measurement period, not to exceed one year from the date of acquisition. The costs of the business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists.


Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, including our estimates for intangible assets, contractual obligations assumed, restructuring liabilities, pre-acquisition contingencies and contingent consideration, where applicable. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Moreover, unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Revenue Recognition, Policy [Policy Text Block]

Sales


Sales of products to franchisees and other customers are recognized at the time of delivery. Sales of products to franchisees and other customers are made at standard prices, without any bargain sales of equipment or supplies. Sales of products at retail stores are recognized at the time of sale.


Rebates


Rebates received from purveyors that supply products to our franchisees are included in franchise royalties and fees. Product rebates are recognized in the period in which they are earned. Rebates related to company-owned locations are offset against operating costs.


Shipping Fees


Shipping fees charged to customers by the Company’s trucking department are reported as sales. Shipping costs incurred by the Company for inventory are reported as cost of sales or inventory.


Franchise and Royalty Fees


Franchise fee revenue is recognized upon opening of the franchise store. In addition to the initial franchise fee, the Company also recognizes a marketing and promotion fee of one percent (1%) of franchised stores’ gross retail sales and a royalty fee based on gross retail sales. Beginning with Rocky Mountain Chocolate Factory franchise store openings in the third quarter of FY 2004, the Company modified its royalty structure. Under the current structure, the Company recognizes no royalty on franchised stores’ retail sales of products purchased from the Company and recognizes a ten percent (10%) royalty on all other sales of product sold at franchise locations. For franchise stores opened prior to the third quarter of FY 2004 the Company recognizes a royalty fee of five percent (5%) of franchised stores’ gross retail sales. Royalty fees for U-Swirl cafés are based on the rate defined in the acquired contracts for the franchise rights and range from 2.5% to 6% of gross retail sales.


In certain instances we are required to pay a portion of franchise fee revenue, or royalty fees to parties we’ve contracted with to assist in developing and growing a brand. The agreements generally include Development Agents, or commissioned brokers who are paid a portion of the initial franchise fee, a portion of the ongoing royalty fees, or both. When such agreements exist, we report franchise fee and royalty fee revenues net of the amount paid, or due, to the agent/broker.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates


In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Vulnerability Due to Certain Concentrations


Revenue from one customer of the Company’s Manufacturing segment represented approximately $5.2 million or 13% of the Company’s revenues during the year ended February 28, 2015. The Company’s future results may be adversely impacted by a change in the purchases of this customer.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation


At February 28, 2015, the Company had stock-based compensation plans, which currently consists solely of the Company’s 2007 Equity Incentive plan, for employees and non-employee directors which authorized the granting of stock awards.


The Company recognized $865,240, $660,325, and $418,633 related equity-based compensation expense during the years ended February 28, 2015, 2014 and 2013, respectively. Compensation costs related to share-based compensation are generally amortized over the vesting period.


Tax benefits in excess of the compensation cost recognized for stock options are reported as financing cash flows in the accompanying Statements of Cash Flows. The excess tax benefit included in net cash provided by financing activities for the years ended February 28, 2015, 2014 and 2013 was $200,544, $68,832 and $58,377, respectively.


During FY 2015, the Company granted no restricted stock units. During FY 2014, the Company granted 280,900 restricted stock units with a grant date fair value of $3,437,950. There were no stock options granted to employees during FY 2015 or FY 2014. The restricted stock unit grants generally vest 17-20% annually over a period of five to six years. The Company recognized $740,261 of consolidated stock-based compensation expense related to these grants during FY 2015 compared with $572,948 in FY 2014. Total unrecognized stock-based compensation expense of non-vested, non-forfeited shares granted, as of February 28, 2015 was $2,467,019, which is expected to be recognized over the weighted average period of 4 years.


During FY 2015, the Company issued 4,000 fully-vested, unrestricted shares to non-employee directors compared with 4,000 fully-vested, unrestricted shares of stock to non-employee directors in FY 2014. In connection with these non-employee director stock issuances, the Company recognized $47,480 and $48,400 of stock-based compensation expense during FY 2015 and FY 2014, respectively.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Share


Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding during each year. Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through stock options and restricted stock units. During FY 2015, FY 2014 and FY 2013, 12,936, 12,936, and 101,661, respectively, of stock options were excluded from diluted shares as their effect was anti-dilutive.

Advertising Costs, Policy [Policy Text Block]

Advertising and Promotional Expenses


The Company expenses advertising costs as incurred. Total advertising expense for RMCF amounted to $244,946, $250,739, and $233,731 for the fiscal years ended February 28, 2015, 2014 and 2013, respectively. Total advertising expense for U-Swirl and its brands amounted to $399,414, $134,192, and $192,088 for the fiscal years ended February 28, 2015, 2014 and 2013, respectively.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments


The Company’s financial instruments consist of cash and cash equivalents, trade receivables, payables, and notes receivable. The fair value of all instruments approximates the carrying value, because of the relatively short maturity of these instruments.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements


In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendments in ASU 2015-03. ASU 2015-03 will be effective for fiscal years beginning after December 15, 2015. We are currently evaluating the impact that the adoption of ASU 2015-03 may have on our consolidated financial statements or disclosures.


In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the new standard.


In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” This guidance requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. If such conditions or events exist, disclosures are required that enable users of the financial statements to understand the nature of the conditions or events, management's evaluation of the circumstances and management's plans to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. We will be required to perform an annual assessment of our ability to continue as a going concern when this standard becomes effective for us in the first quarter of our fiscal year ended February 28, 2017. The adoption of this guidance is not expected to impact our financial position, results, operations or cash flows.

Reclassification, Policy [Policy Text Block]

Reclassifications


Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported.

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Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Feb. 28, 2015
Disclosure Text Block [Abstract]
Number of Stores [Table Text Block]
   

Sold, Not Yet Open

   

Open

   

Total

 

Rocky Mountain Chocolate Factory

                       

Company-owned stores

    -       4       4  

Franchise stores – Domestic stores

    3       196       199  

Franchise stores – Domestic kiosks

    -       5       5  

International License Stores

    1       72       73  

Cold Stone Creamery – co-branded

    10       68       78  

U-Swirl Stores (Including all associated brands)

                       

Company-owned stores

    -       7       7  

Company-owned stores – co-branded

    -       3       3  

Franchise stores – North American stores

    *       214       214  

Franchise stores – North American – co-branded

    *       18       18  

International License Stores

    1       6       7  

Total

    15       593       608  
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Note 2 - Inventories (Tables)
12 Months Ended
Feb. 28, 2015
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]
   

2015

   

2014

 

Ingredients and supplies

  $ 2,755,232     $ 2,531,413  

Finished candy

    2,130,133       1,965,199  

U-Swirl food and packaging

    97,669       118,219  

Reserve for slow moving inventory

    (197,658 )     (204,068 )

Total inventories

  $ 4,785,376     $ 4,410,763  
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Note 3 - Property and Equipment, Net (Tables)
12 Months Ended
Feb. 28, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]
   

2015

   

2014

 

Land

  $ 513,618     $ 513,618  

Building

    4,774,825       4,775,466  

Machinery and equipment

    10,120,865       9,518,832  

Furniture and fixtures

    1,224,433       1,324,846  

Leasehold improvements

    2,056,244       2,489,782  

Transportation equipment

    427,727       394,508  

Capital work in progress

    -       967,937  

Asset impairment

    (290,640 )     -  
      18,827,072       19,984,989  
                 

Less accumulated depreciation

    12,029,536       11,496,791  

Property and equipment, net

  $ 6,797,536     $ 8,488,198  
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Note 4 - Line of Credit and Long-term Debt (Tables)
12 Months Ended
Feb. 28, 2015
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments [Table Text Block]
   

2015

   

2014

 

Note payable in monthly installments of principal and interest at 3.75% per annum through December 2019 collateralized by substantially all business assets.

  $ 6,292,367     $ 6,400,000  

Less current maturities

    1,208,888       108,023  
Long-term obligations   $ 5,083,479     $ 6,291,977  
Schedule of Maturities of Long-term Debt [Table Text Block]

2016

  $ 1,208,900  

2017

    1,255,700  

2018

    1,304,200  

2019

    1,354,700  

2020

    1,168,867  
Total   $ 6,292,367  
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Note 5 - Commitments and Contingencies (Tables)
12 Months Ended
Feb. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2016

  $ 995,000  

2017

    753,000  

2018

    677,000  

2019

    617,000  

2020

    293,000  

Thereafter

    56,000  
Total   $ 3,391,000  

2016

  $ 116,000  
2017     121,000  
2018     30,000  
Total   $ 267,000  

2016

  $ 172,100  

2017

    172,100  

2018

    123,600  

2019

    22,200  
         
Total   $ 490,000  
Schedule of Future Sublease Rental Payments [Table Text Block]

2016

  $ 479,000  

2017

    211,000  

2018

    79,000  
Total   $ 769,000  
Schedule of Rent Expense [Table Text Block]
   

2015

   

2014

   

2013

 

Minimum rentals

  $ 1,282,363     $ 1,658,710     $ 862,866  

Less sublease rentals

    (468,000 )     (686,000 )     (157,000 )

Contingent rentals

    22,200       22,626       20,399  
    $ 836,563     $ 995,336     $ 726,265  
   

2015

   

2014

   

2013

 
      185,703       199,894       201,081  
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Note 6 - Income Taxes (Tables)
12 Months Ended
Feb. 28, 2015
Income Tax Disclosure [Abstract]
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
   

2015

   

2014

   

2013

 

Current

                       

Federal

  $ 1,846,365     $ 1,668,259     $ 2,090,996  

State

    246,398       227,904       287,026  

Total Current

    2,092,763       1,896,163       2,378,022  
                         

Deferred

                       

Federal

    (50,603 )     237,538       (1,107,287 )

State

    (4,465 )     20,959       (37,275 )

Total Deferred

    (55,068 )     258,497       (1,144,562 )

Total

  $ 2,037,695     $ 2,154,660     $ 1,233,460  
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
   

2015

   

2014

   

2013

 

Statutory rate

    34.0 %     34.0 %     34.0 %

State income taxes, net of federal benefit

    2.8 %     3.1 %     4.8 %

Domestic production deduction

    (1.6% )     (2.4% )     (3.2% )

Other

    0.1 %     0.1 %     1.5 %

Acquisition related expenses

    -       -       6.4 %

U-Swirl loss carryforward recognized

    (3.0% )     -       -  

Valuation allowance, U-Swirl Consolidated loss

    3.0 %     5.9 %     4.2 %

Effective Rate

    35.3 %     40.7 %     47.7 %
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred Tax Assets

 

2015

   

2014

 

Allowance for doubtful accounts and notes

  $ 248,067     $ 219,108  

Inventories

    73,133       75,505  

Accrued compensation

    216,469       210,290  

Loss provisions and deferred income

    129,446       143,877  

Self-insurance accrual

    21,543       27,240  

Amortization, design costs

    36,688       54,312  

Restructuring charges

    148,494       1,850  

U-Swirl accumulated net loss

    349,010       689,590  

Valuation allowance, U-Swirl accumulated net loss

    (349,010 )     (689,590 )

Net deferred tax assets

    873,840       732,182  
                 

Deferred Tax Liabilities

               

Depreciation and amortization

    (1,234,110 )     (1,133,467 )

Prepaid expenses

    (96,280 )     (110,333 )

Net deferred tax liability

  $ (1,330,390 )   $ (1,243,800 )
                 

Current deferred tax assets

  $ 572,957     $ 538,871  

Non-current deferred tax liabilities

    (1,029,507 )     (1,050,489 )

Net deferred tax liability

  $ (456,550 )   $ (511,618 )
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Note 8 - Stock Compensation Plans (Tables)
12 Months Ended
Feb. 28, 2015
Note 8 - Stock Compensation Plans (Tables) [Line Items]
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]
   

Twelve Months Ended

 
   

February 28:

 
   

2015

   

2014

   

2013

 

Outstanding stock options at beginning of year:

    155,880       270,945       307,088  

Granted

    -       -       -  

Exercised

    (142,944 )     (26,340 )     (21,191 )

Cancelled/forfeited

    -       (88,725 )     (14,952 )

Outstanding stock options as of February 28 or 29:

    12,936       155,880       270,945  
                         

Weighted average exercise price

  $ 12.94     $ 8.01     $ 11.17  

Weighted average remaining contractual term (in years)

    1.04       0.45       1.94  
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]
   

Options Outstanding

 

Exercise price

 

Number exercisable

   

Weighted average remaining contractual life in years

   

Weighted average exercise price

 

$14.695

    12,936       1.04     $ 14.70  
Restricted Stock [Member]
Note 8 - Stock Compensation Plans (Tables) [Line Items]
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]
   

Twelve Months Ended

 
   

February 28:

 
   

2015

   

2014

   

2013

 

Outstanding non-vested restricted stock units at beginning of year:

    295,040       57,030       101,980  

Granted

    -       280,900       -  

Vested

    (56,199 )     (41,390 )     (44,190 )

Cancelled/forfeited

    (1,200 )     (1,500 )     (760 )

Outstanding non-vested restricted stock units as of February 28 or 29:

    237,641       295,040       57,030  
                         

Weighted average grant date fair value

  $ 12.13     $ 12.09     $ 9.22  

Weighted average remaining vesting period (in years)

    4.08       4.99       1.14  
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Note 9 - Operating Segments (Tables)
12 Months Ended
Feb. 28, 2015
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment [Table Text Block]

FY 2015

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 5,976,964     $ 27,459,828     $ 2,134,976     $ 7,501,943     $ -     $ 43,073,711  

Intersegment revenues

    (342 )     (1,564,993 )     -       -       -       (1,565,335 )

Revenue from external customers

    5,976,622       25,894,835       2,134,976       7,501,943       -       41,508,376  

Segment profit (loss)

    2,783,734       6,993,693       (51,803 )     (245,546 )     (3,699,637 )     5,780,441  

Total assets

    1,193,407       12,155,004       1,157,674       12,424,801       7,207,327       34,138,213  

Capital expenditures

    28,806       378,060       41,361       61,053       117,464       626,744  

Total depreciation & amortization

    41,228       395,864       35,531       813,172       154,653       1,440,448  

FY 2014

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 6,045,675     $ 27,101,515     $ 2,391,627     $ 5,528,649     $ -     $ 41,067,466  

Intersegment revenues

    -       (1,882,659 )     -       -       -       (1,882,659 )

Revenue from external customers

    6,045,675       25,218,856       2,391,627       5,528,649       -       39,184,807  

Segment profit (loss)

    2,798,934       7,189,181       (192,966 )     (806,891 )     (3,699,094 )     5,289,164  

Total assets*

    1,223,605       11,966,991       1,278,862       13,245,175       7,438,406       35,153,039  

Capital expenditures

    49,040       931,102       98,115       1,295,105       144,955       2,518,317  

Total depreciation & amortization

    37,089       294,986       62,039       487,073       145,588       1,026,775  

FY 2013

 

Franchising

   

Manufacturing

   

Retail

   

U-Swirl

   

Other

   

Total

 

Total revenues

  $ 6,047,039     $ 26,451,612     $ 5,395,805     $ 505,956     $ -     $ 38,400,412  

Intersegment revenues

    -       (2,085,211 )     -       -       -       (2,085,211 )

Revenue from external customers

    6,047,039       24,366,401       5,395,805       505,956       -       36,315,201  

Segment profit (loss)

    2,494,868       6,853,360       (2,251,581 )     (320,446 )     (4,192,707 )     2,583,494  

Total assets

    1,302,094       10,510,745       1,305,006       3,446,319       7,269,781       23,833,945  

Capital expenditures

    25,985       277,675       290,330       2,719       146,162       742,871  

Total depreciation & amortization

    39,029       290,076       383,550       70,146       152,577       935,378  
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Note 10 - Supplemental Cash Flow Information (Tables)
12 Months Ended
Feb. 28, 2015
Supplemental Cash Flow Elements [Abstract]
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Cash paid (received) for:

 

2015

   

2014

   

2013

 

Income taxes paid

  $ 1,896,274     $ 2,417,238     $ 1,173,717  

Interest

    193,022       20,000       -  

Accrued Inventory

    245,183       246,647       260,441  
                         

Non-Cash Financing Activities:

                       

Dividend payable

    721,536       675,422       667,532  
                         

Non-Cash Investing Activities:

                       

Sale or distribution of assets in exchange for notes receivable

    414,353       -       -  

Acquired interest in U-Swirl

    -       -       800,000  

Accrued capital expenditures

  $ -     $ 175,000     $ -  
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Note 12 - Summarized Quarterly Data (Unaudited) (Tables)
12 Months Ended
Feb. 28, 2015
Quarterly Financial Information Disclosure [Abstract]
Schedule of Quarterly Financial Information [Table Text Block]
   

First

   

Second

   

Third

   

Fourth

   

Total 

 

2015

                                       

Total revenue

  $ 10,322,206     $ 9,457,448     $ 10,561,562     $ 11,167,160     $ 41,508,376  

Gross margin before depreciation

    3,017,580       2,806,058       3,056,105       3,005,248       11,884,991  

Net income (loss)

    711,334       877,356       962,378       1,386,772       3,937,840  

Basic earnings (loss) per share

    0.12       0.14       0.16       0.23       0.64  

Diluted earnings (loss) per share

    0.11       0.14       0.15       0.22       0.61  
   

First

   

Second

   

Third

   

Fourth

   

Total 

 

2014

                                       

Total revenue

  $ 10,177,862     $ 8,663,161     $ 9,279,994     $ 11,063,790     $ 39,184,807  

Gross margin before depreciation

    3,151,525       2,985,223       2,739,681       3,172,433       12,048,862  

Net income

    1,179,307       1,027,784       699,174       1,486,179       4,392,444  

Basic earnings per share

    0.19       0.17       0.11       0.24       0.72  

Dilute earnings per share

    0.19       0.16       0.11       0.23       0.68  
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Note 13 - Goodwill and Intangible Assets (Tables)
12 Months Ended
Feb. 28, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets and Goodwill [Table Text Block]
            2015     2014  
   

Amortization Period (in years)

   

Gross Carrying Value

   

Accumulated Amortization

   

Gross Carrying Value

   

Accumulated Amortization

 

Intangible assets subject to amortization

                                       

Store design

    10     $ 220,778     $ 208,152     $ 220,778     $ 206,652  

Packaging licenses

    3-5       120,830       120,830       120,830       120,830  

Packaging design

    10       430,973       430,973       430,973       430,973  

Trademark/Non-competition agreements*

    5-20       459,340       31,538       459,340       5,283  

Franchise Rights*

    20       5,850,290       410,830       5,704,034       90,786  

Total

            7,082,211       1,202,323       6,935,955       854,524  

Intangible assets not subject to amortization Franchising segment-

                                       

Company stores goodwill

            1,122,328       267,020       1,208,328       267,020  

Franchising goodwill*

            2,202,529       197,682       2,202,529       197,682  

Manufacturing segment-Goodwill

            295,000       197,682       295,000       197,682  

Trademark-indefinite life

            20,000       -       20,000       -  

Total

            3,639,857       662,384       3,725,857       662,384  
                                         

Total intangible assets

          $ 10,722,068     $ 1,864,707     $ 10,661,812     $ 1,516,908  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2016

  $ 369,864  

2017

    401,872  

2018

    417,972  

2019

    424,402  

2020

    411,245  

Thereafter

    3,854,533  

Total

  $ 5,879,888  
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Note 14 - Restructuring and Acquisition Related Charges (Tables)
12 Months Ended
Feb. 28, 2015
Restructuring and Related Activities [Abstract]
Schedule of Fresh-Start Adjustments [Table Text Block]
   

2015

   

2014

 

Professional fees

  $ 284,275     $ 763,168  

Severance/transitional compensation

    212,027       -  

Leasehold improvements, property and equipment impairment of long-lived assets

    243,000       -  

Provision for termination of contractual obligations

    -       22,845  

Acceleration of restricted stock unit vesting

    65,049       -  

Other

    3,125       -  
                 

Total

  $ 807,476     $ 786,013  
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Note 17 - Net Income and Transfers (to) From Non-controlling Interest (Tables)
12 Months Ended
Feb. 28, 2015
Noncontrolling Interest [Abstract]
Redeemable Noncontrolling Interest [Table Text Block]
   

2015

   

2014

 

Net Income (loss) attributable to RMCF shareholders

    (117,140 )     (868,543 )

Transfers from non-controlling interest

               

U-Swirl expense recorded for equity based compensation

    61,008       62,000  

U-Swirl common stock issued, at fair value, for business acquisitions*

    -       750,036  

U-Swirl, Inc common stock issued upon the exercise of stock options and warrants

    357,158       34,189  

Change to ownership interest resulting from stock issuances

    (35,860 )     (347,723 )

Net transfers from non-controlling interest

    382,306       498,502  

Changes from net loss and transfers from non-controlling interest

  $ 265,166     $ (370,041 )
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Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Tables)
12 Months Ended
Feb. 28, 2015
Business Combinations [Abstract]
Business Combination, Purchase Price Fair Value Adjustments [Table Text Block]

Yogli Mogli

 

Preliminary

   

Adjustment

   

Final

 

Café Store Assets

  $ 1,003,000     $ -     $ 1,003,000  

Trademarks

    156,000       (14,000 )     142,000  

Franchise agreements

    1,201,000       (78,000 )     1,123,000  

Non-Competition agreements

    6,000       -       6,000  

Goodwill

    54,500       29,029       83,529  
    $ 2,420,500     $ (62,971 )   $ 2,357,529  

CherryBerry

 

Preliminary

   

Adjustment

   

Final

 

Café store assets

  $ 238,000     $ -     $ 238,000  

Café store goodwill

    23,000       -       23,000  

Trademarks

    405,000       (118,000 )     287,000  

Franchise rights

    3,615,000       (798,000 )     2,817,000  

Non-compete agreements

    23,000       (2,000 )     21,000  

Goodwill

    3,006,000       (1,182,000 )     1,824,000  
    $ 7,310,000     $ (2,100,000 )   $ 5,210,000  
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Assets acquired – Transaction date

  $ 5,210,000     $ 2,357,529     $ 481,497     $ 8,049,026  

Assets acquired – Earn out

    -       -       146,257       146,257  

Lease liabilities assumed

    -       (58,000 )     -       (58,000 )

Gift card liabilities assumed

    -       (149,529 )     -       (149,529 )
                                 

Total purchase price

  $ 5,210,000     $ 2,150,000     $ 627,754     $ 7,987,754  
   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Café store assets

  $ 238,000     $ 1,003,000     $ -     $ 1,241,000  

Café store goodwill

    23,000       -       -       23,000  

Trademarks

    287,000       142,000       -       429,000  

Franchise rights

    2,817,000       1,123,000       627,754       4,567,754  

Non-competition agreements

    21,000       6,000       -       27,000  

Goodwill

    1,824,000       83,529       -       1,907,529  
                                 

Total assets acquired

  $ 5,210,000     $ 2,357,529     $ 627,754     $ 8,195,283  
   

CherryBerry

   

Yogli Mogli

   

Fuzzy Peach

   

Total

 

Common stock – U-Swirl

  $ 960,000     $ -     $ -     $ 960,000  

Cash

    4,250,000       2,150,000       627,754       7,027,754  
                                 

Total consideration paid

  $ 5,210,000     $ 2,150,000     $ 627,754     $ 7,987,754  
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Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $)
3 Months Ended 12 Months Ended
Feb. 28, 2015
Nov. 30, 2014
Aug. 31, 2014
May 31, 2014
Feb. 28, 2014
Nov. 30, 2013
Aug. 31, 2013
May 31, 2013
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Mar. 01, 2015
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Common Stock, Par or Stated Value Per Share (in Dollars per share) $ 0.03 $ 0.03 $ 0.03 $ 0.03
Equity Method Investment, Ownership Percentage 60.00%
Certificates of Deposit, at Carrying Value $ 108,000 $ 108,000 $ 108,000 $ 108,000
Cash, Uninsured Amount 6,500,000 6,500,000
Financing Receivable, Gross 1,060,057 1,060,057
Financing Receivable, Allowance for Credit Losses 32,262 32,262
Gift Card Liability, Current 2,611,774 2,091,074 2,611,774 2,091,074
Revenues 11,167,160 10,561,562 9,457,448 10,322,206 11,063,790 9,279,994 8,663,161 10,177,862 41,508,376 39,184,807 36,315,201
Allocated Share-based Compensation Expense 865,240 660,325 418,633
Excess Tax Benefit from Share-based Compensation, Financing Activities 200,544 68,832 58,377
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) 280,900
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) 0 0
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares) 114,705 67,730 65,381
Subsequent Event [Member] | Newco [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Conversion of Stock, Par Or Stated Value Per Share (in Dollars per share) 0.001
After Debt Conversion [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent 72.00% 72.00%
Marketing and Promotion Fee [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Franchise Fee Rate 1.00%
Products Sold [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Franchise Fee Rate 10.00%
Gross Retail Sales in Stores Opened Prior to July 2004 [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Franchise Fee Rate 5.00%
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage 17.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 5 years
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage 20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 6 years
Restricted Stock Units (RSUs) [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Allocated Share-based Compensation Expense 740,261 572,948
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) 0 280,900
Stock Issued During Period, Value, Share-based Compensation, Gross 3,437,950
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized 2,467,019 2,467,019
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 4 years
Unrestricted Shares of Stock [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Allocated Share-based Compensation Expense 47,480 48,400
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares) 4,000 4,000
Secured by Assets Financed [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Financing Receivable, Gross 954,000 954,000
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Numbers of Major Customers 1
Revenues 5,200,000
Concentration Risk, Percentage 13.00%
Minimum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Financing Receivable Interest Rate 4.50% 4.50%
Property, Plant and Equipment, Useful Life 5 years
Percent of Retail Sales 2.50% 2.50%
Maximum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Financing Receivable Interest Rate 8.00% 8.00%
Property, Plant and Equipment, Useful Life 39 years
Percent of Retail Sales 6.00% 6.00%
Franchise Rights [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life 20 years [1]
Equity Option [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) 12,936 12,936 101,661
U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent 39.00% 39.00%
Debt Instrument, Convertible, Number of Equity Instruments 26,271,000
Rocky Mountain Chocolate Factory [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Advertising Expense 244,946 250,739 233,731
Aspen Leaf Yogurt [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Advertising Expense $ 399,414 $ 134,192 $ 192,088
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores
Feb. 28, 2015
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 608
Sold, Not Yet Open [Member] | Franchise Stores - Domestic Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 3
Sold, Not Yet Open [Member] | International License Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 1
Sold, Not Yet Open [Member] | International License Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 1
Sold, Not Yet Open [Member] | Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 10
Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 15
Open [Member] | Company-Owned Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 4
Open [Member] | Company-Owned Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 7
Open [Member] | Franchise Stores - Domestic Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 196
Open [Member] | Franchise Stores - Domestic Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 214
Open [Member] | Franchise Stores - Domestic Kiosks [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 5
Open [Member] | International License Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 72
Open [Member] | International License Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 6
Open [Member] | Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 68
Open [Member] | Company-Owned Stores - Co-Branded [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 3
Open [Member] | Franchise Stores - Co-branded [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 18
Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 593
Company-Owned Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 4
Company-Owned Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 7
Franchise Stores - Domestic Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 199
Franchise Stores - Domestic Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 214
Franchise Stores - Domestic Kiosks [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 5
International License Stores [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 73
International License Stores [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 7
Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 78
Company-Owned Stores - Co-Branded [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 3
Franchise Stores - Co-branded [Member] | U-Swirl, Inc. [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Company-owned stores 18
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Note 2 - Inventories (Details) - Inventories (USD $)
Feb. 28, 2015
Feb. 28, 2014
Inventories [Abstract]
Ingredients and supplies $ 2,755,232 $ 2,531,413
Finished candy 2,130,133 1,965,199
U-Swirl food and packaging 97,669 118,219
Reserve for slow moving inventory (197,658) (204,068)
Total inventories $ 4,785,376 $ 4,410,763
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Note 3 - Property and Equipment, Net (Details) - Property and Equipment (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Property, Plant and Equipment [Line Items]
Property and equipment $ 18,827,072 $ 19,984,989
Less accumulated depreciation 12,029,536 11,496,791
Property and equipment, net 6,797,536 8,488,198
Asset impairment (290,640)
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 513,618 513,618
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 4,774,825 4,775,466
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 10,120,865 9,518,832
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 1,224,433 1,324,846
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 2,056,244 2,489,782
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment 427,727 394,508
Asset under Construction [Member]
Property, Plant and Equipment [Line Items]
Property and equipment $ 967,937
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Note 4 - Line of Credit and Long-term Debt (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 0 Months Ended
Feb. 28, 2015
Jan. 16, 2014
Feb. 28, 2014
Note 4 - Line of Credit and Long-term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity $ 5
Debt Instrument, Basis Spread on Variable Rate 0.03%
Line of Credit Facility, Remaining Borrowing Capacity 5
Debt Instrument, Interest Rate, Stated Percentage 3.75% 3.75%
Accounts Receivable [Member]
Note 4 - Line of Credit and Long-term Debt (Details) [Line Items]
Maximum Draws Allowed 75.00%
Eligible Inventories [Member]
Note 4 - Line of Credit and Long-term Debt (Details) [Line Items]
Maximum Draws Allowed 50.00%
Line of Credit [Member] | Wells Fargo [Member]
Note 4 - Line of Credit and Long-term Debt (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage 3.75%
Wells Fargo [Member]
Note 4 - Line of Credit and Long-term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity 7
Proceeds from Lines of Credit 6.4
Long-term Line of Credit 6.4
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Note 4 - Line of Credit and Long-term Debt (Details) - Long-term Debt (USD $)
Feb. 28, 2015
Feb. 28, 2014
Long-term Debt, Unclassified [Abstract]
Note payable in monthly installments of principal and interest at 3.75% per annum through December 2019 collateralized by substantially all business assets. $ 6,292,367 $ 6,400,000
Less current maturities 1,208,888 108,023
Long-term obligations $ 5,083,479 $ 6,291,977
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Note 4 - Line of Credit and Long-term Debt (Details) - Long-term Debt (Parentheticals)
Feb. 28, 2015
Feb. 28, 2014
Long-term Debt, Unclassified [Abstract]
Note payable in monthly installments of principal and interest 3.75% 3.75%
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Note 4 - Line of Credit and Long-term Debt (Details) - Long-term Debt Maturities (USD $)
Feb. 28, 2015
Long-term Debt Maturities [Abstract]
2016 $ 1,208,900
2017 1,255,700
2018 1,304,200
2019 1,354,700
2020 1,168,867
Total $ 6,292,367
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Note 5 - Commitments and Contingencies (Details) (USD $)
12 Months Ended 0 Months Ended
Feb. 28, 2015
Jan. 17, 2014
Note 5 - Commitments and Contingencies (Details) [Line Items]
Number of Stores 608
Contractual Obligation (in Dollars) 798,000
Franchised Stores [Member] | Primary Lessee [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Number of Stores 10
Franchised Stores [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Number of Stores 433
Minimum [Member] | CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Share Price (in Dollars per share) 0.5
Minimum [Member] | Retail Operations Facilities [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Lessee Leasing Arrangements, Operating Leases, Term of Contract 5 years
Minimum [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Lessee Leasing Arrangements, Operating Leases, Renewal Term 5 years
Maximum [Member] | Retail Operations Facilities [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Lessee Leasing Arrangements, Operating Leases, Term of Contract 10 years
Maximum [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Lessee Leasing Arrangements, Operating Leases, Renewal Term 10 years
CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) 4,000,000
U-Swirl, Inc. [Member]
Note 5 - Commitments and Contingencies (Details) [Line Items]
Share Price (in Dollars per share) 0.24
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Note 5 - Commitments and Contingencies (Details) - Future Minimum Rental Payments Under Operating Leases (USD $)
Feb. 28, 2015
Retail Operations Facilities [Member]
Note 5 - Commitments and Contingencies (Details) - Future Minimum Rental Payments Under Operating Leases [Line Items]
2016 $ 995,000
2017 753,000
2018 677,000
2019 617,000
2020 293,000
Thereafter 56,000
Total 3,391,000
Warehouse Space [Member]
Note 5 - Commitments and Contingencies (Details) - Future Minimum Rental Payments Under Operating Leases [Line Items]
2016 116,000
2017 121,000
2018 30,000
Total 267,000
Trucking Equipment [Member]
Note 5 - Commitments and Contingencies (Details) - Future Minimum Rental Payments Under Operating Leases [Line Items]
2016 172,100
2017 172,100
2018 123,600
2019 22,200
Total $ 490,000
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Note 5 - Commitments and Contingencies (Details) - Sublease Rental Income (USD $)
Feb. 28, 2014
Sublease Rental Income [Abstract]
2016 $ 479,000
2017 211,000
2018 79,000
Total $ 769,000
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Note 5 - Commitments and Contingencies (Details) - Net Lease Expense for Operating Leases (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Note 5 - Commitments and Contingencies (Details) - Net Lease Expense for Operating Leases [Line Items]
Minimum rentals $ 1,282,363 $ 1,658,710 $ 862,866
Less sublease rentals (468,000) (686,000) (157,000)
Contingent rentals 22,200 22,626 20,399
836,563 995,336 726,265
Trucking Equipment [Member]
Note 5 - Commitments and Contingencies (Details) - Net Lease Expense for Operating Leases [Line Items]
$ 185,703 $ 199,894 $ 201,081
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Note 6 - Income Taxes (Details) (USD $)
12 Months Ended
Feb. 28, 2013
Feb. 28, 2015
Note 6 - Income Taxes (Details) [Line Items]
Business Combination, Bargain Purchase, Gain Recognized, Amount $ 268,000
Domestic Tax Authority [Member]
Note 6 - Income Taxes (Details) [Line Items]
Business Combination, Bargain Purchase, Gain Recognized, Amount 222,000
Gross Amount [Member] | U-Swirl, Inc. [Member]
Note 6 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Operating Loss Carryforwards, Domestic 970,000
U-Swirl, Inc. [Member]
Note 6 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Operating Loss Carryforwards, Domestic $ 350,000
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Note 6 - Income Taxes (Details) - Income Tax Expense (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Income Tax Expense [Abstract]
Federal $ 1,846,365 $ 1,668,259 $ 2,090,996
State 246,398 227,904 287,026
Total Current 2,092,763 1,896,163 2,378,022
Federal (50,603) 237,538 (1,107,287)
State (4,465) 20,959 (37,275)
Total Deferred (55,068) 258,497 (1,144,562)
Total $ 2,037,695 $ 2,154,660 $ 1,233,460
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Note 6 - Income Taxes (Details) - Reconciliation of the Statutory Federal Income Tax Rate and the Effective Rate
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Reconciliation of the Statutory Federal Income Tax Rate and the Effective Rate [Abstract]
Statutory rate 34.00% 34.00% 34.00%
State income taxes, net of federal benefit 2.80% 3.10% 4.80%
Domestic production deduction (1.60%) (2.40%) (3.20%)
Other 0.10% 0.10% 1.50%
Acquisition related expenses 6.40%
U-Swirl loss carryforward recognized (3.00%)
Valuation allowance, U-Swirl Consolidated loss 3.00% 5.90% 4.20%
Effective Rate 35.30% 40.70% 47.70%
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Note 6 - Income Taxes (Details) - The Components of Deferred Income Taxes (USD $)
Feb. 28, 2015
Feb. 28, 2014
The Components of Deferred Income Taxes [Abstract]
Allowance for doubtful accounts and notes $ 248,067 $ 219,108
Inventories 73,133 75,505
Accrued compensation 216,469 210,290
Loss provisions and deferred income 129,446 143,877
Self-insurance accrual 21,543 27,240
Amortization, design costs 36,688 54,312
Restructuring charges 148,494 1,850
U-Swirl accumulated net loss 349,010 689,590
Valuation allowance, U-Swirl accumulated net loss (349,010) (689,590)
Net deferred tax assets 873,840 732,182
Deferred Tax Liabilities
Depreciation and amortization (1,234,110) (1,133,467)
Prepaid expenses (96,280) (110,333)
Net deferred tax liability (1,330,390) (1,243,800)
Current deferred tax assets 572,957 538,871
Non-current deferred tax liabilities (1,029,507) (1,050,489)
Net deferred tax liability $ (456,550) $ (511,618)
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Note 7 - Stockholders' Equity (Details) (USD $)
0 Months Ended 1 Months Ended 3 Months Ended 2 Months Ended 12 Months Ended 0 Months Ended
Dec. 12, 2014
Sep. 12, 2014
Jun. 13, 2014
Mar. 14, 2014
Dec. 13, 2013
Sep. 13, 2013
Jun. 14, 2013
Jul. 31, 2014
Feb. 09, 2015
Nov. 28, 2014
Feb. 28, 2015
Feb. 28, 2013
Mar. 13, 2015
Jan. 13, 2015
Jul. 15, 2014
May 21, 2015
Note 7 - Stockholders' Equity (Details) [Line Items]
Common Stock, Dividends, Per Share, Cash Paid $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.11
Stock Repurchase Program, Authorized Amount (in Dollars) $ 2,058,000 $ 3,000,000
Stock Repurchased and Retired During Period, Shares (in Shares) 55,000 91,595 99,511 246,106 163,300
Treasury Stock Acquired, Average Cost Per Share $ 12.58 $ 13.35 $ 12.19
Stock Repurchase Program, Remaining Authorized Repurchase Amount (in Dollars) 1,930,000
Subsequent Event [Member]
Note 7 - Stockholders' Equity (Details) [Line Items]
Common Stock, Dividends, Per Share, Cash Paid $ 0.12
Stock Repurchase Program, Authorized Amount (in Dollars) $ 3,000,000
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Note 8 - Stock Compensation Plans (Details)
12 Months Ended 98 Months Ended
Feb. 28, 2014
Feb. 28, 2013
Feb. 28, 2015
Feb. 28, 2015
Feb. 29, 2012
Note 8 - Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period 88,725 14,952
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 155,880 270,945 12,936 12,936 307,088
Originally Authorized [Member] | 2007 Equity Incentive Plan [Member]
Note 8 - Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized 300,000 300,000
Previously Reserved [Member] | 2007 Equity Incentive Plan [Member]
Note 8 - Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 85,340 85,340
Employee Stock Option [Member] | 2007 Equity Incentive Plan [Member]
Note 8 - Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 12,936
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period 10 years
Unrestricted Shares of Stock [Member] | 2007 Equity Incentive Plan [Member]
Note 8 - Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 28,000
2007 Equity Incentive Plan [Member]
Note 8 - Stock Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross 500,140
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 315,653 315,653
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized 300,000 300,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period 171,389
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 12,936 12,936
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Note 8 - Stock Compensation Plans (Details) - Stock Option Awards Outstanding Under the Plans (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Stock Option Awards Outstanding Under the Plans [Abstract]
Outstanding stock options at beginning of year: 155,880 270,945 307,088
Exercised (142,944) (26,340) (21,191)
Cancelled/forfeited (88,725) (14,952)
Outstanding stock options as of February 28 or 29: 12,936 155,880 270,945
Weighted average exercise price (in Dollars per share) $ 12.94 $ 8.01 $ 11.17
Weighted average remaining contractual term (in years) 1 year 14 days 164 days 1 year 343 days
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Note 8 - Stock Compensation Plans (Details) - Restricted Stock Unit Awards Outstanding Under the Plans (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Restricted Stock Unit Awards Outstanding Under the Plans [Abstract]
Outstanding non-vested restricted stock units at beginning of year: 295,040 57,030 101,980
Granted 280,900
Vested (56,199) (41,390) (44,190)
Cancelled/forfeited (1,200) (1,500) (760)
Outstanding non-vested restricted stock units as of February 28 or 29: 237,641 295,040 57,030
Weighted average grant date fair value (in Dollars per share) $ 12.13 $ 12.09 $ 9.22
Weighted average remaining vesting period (in years) 4 years 29 days 4 years 361 days 1 year 51 days
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Note 8 - Stock Compensation Plans (Details) - Additional Information About Stock Options Outstanding (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
4 years 29 days 4 years 361 days 1 year 51 days
Range 1 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
14.695
(in Shares) 12,936
1 year 14 days
14.7
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Note 9 - Operating Segments (Details) (USD $)
3 Months Ended 12 Months Ended
Feb. 28, 2015
Nov. 30, 2014
Aug. 31, 2014
May 31, 2014
Feb. 28, 2014
Nov. 30, 2013
Aug. 31, 2013
May 31, 2013
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Note 9 - Operating Segments (Details) [Line Items]
Number of Reportable Segments 5
Revenues (in Dollars) $ 11,167,160 $ 10,561,562 $ 9,457,448 $ 10,322,206 $ 11,063,790 $ 9,279,994 $ 8,663,161 $ 10,177,862 $ 41,508,376 $ 39,184,807 $ 36,315,201
Manufacturing [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Note 9 - Operating Segments (Details) [Line Items]
Numbers of Major Customers 1
Revenues (in Dollars) 5,200,000
Manufacturing [Member]
Note 9 - Operating Segments (Details) [Line Items]
Revenues (in Dollars) 25,894,835 25,218,856 24,366,401
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Note 9 - Operating Segments (Details) [Line Items]
Numbers of Major Customers 1
Revenues (in Dollars) $ 5,200,000
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Note 9 - Operating Segments (Details) - Segment Information (USD $)
3 Months Ended 12 Months Ended
Feb. 28, 2015
Nov. 30, 2014
Aug. 31, 2014
May 31, 2014
Feb. 28, 2014
Nov. 30, 2013
Aug. 31, 2013
May 31, 2013
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Segment Reporting Information [Line Items]
Revenues $ 11,167,160 $ 10,561,562 $ 9,457,448 $ 10,322,206 $ 11,063,790 $ 9,279,994 $ 8,663,161 $ 10,177,862 $ 41,508,376 $ 39,184,807 $ 36,315,201
Segment profit (loss) 5,780,441 5,289,164 2,583,494
Total assets 34,138,213 35,153,039 34,138,213 35,153,039 23,833,945
Capital expenditures 626,744 2,518,317 742,871
Total depreciation & amortization 1,440,448 1,026,775 935,377
Revenue Before Intersegment Eliminations [Member] | Franchising [Member]
Segment Reporting Information [Line Items]
Revenues 5,976,964 6,045,675 6,047,039
Revenue Before Intersegment Eliminations [Member] | Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues 27,459,828 27,101,515 26,451,612
Revenue Before Intersegment Eliminations [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Revenues 2,134,976 2,391,627 5,395,805
Revenue Before Intersegment Eliminations [Member] | U-Swirl, Inc. [Member]
Segment Reporting Information [Line Items]
Revenues 7,501,943 5,528,649 505,956
Revenue Before Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues 43,073,711 41,067,466 38,400,412
Intersegment Eliminations [Member] | Franchising [Member]
Segment Reporting Information [Line Items]
Revenues (342)
Intersegment Eliminations [Member] | Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues (1,564,993) (1,882,659) (2,085,211)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues (1,565,335) (1,882,659) (2,085,211)
Franchising [Member]
Segment Reporting Information [Line Items]
Revenues 5,976,622 6,045,675 6,047,039
Segment profit (loss) 2,783,734 2,798,934 2,494,868
Total assets 1,193,407 1,223,605 1,193,407 1,223,605 1,302,094
Capital expenditures 28,806 49,040 25,985
Total depreciation & amortization 41,228 37,089 39,029
Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues 25,894,835 25,218,856 24,366,401
Segment profit (loss) 6,993,693 7,189,181 6,853,360
Total assets 12,155,004 11,966,991 12,155,004 11,966,991 10,510,745
Capital expenditures 378,060 931,102 277,675
Total depreciation & amortization 395,864 294,986 290,076
Retail [Member]
Segment Reporting Information [Line Items]
Revenues 2,134,976 2,391,627 5,395,805
Segment profit (loss) (51,803) (192,966) (2,251,581)
Total assets 1,157,674 1,278,862 1,157,674 1,278,862 1,305,006
Capital expenditures 41,361 98,115 290,330
Total depreciation & amortization 35,531 62,039 383,550
U-Swirl, Inc. [Member]
Segment Reporting Information [Line Items]
Revenues 7,501,943 5,528,649 505,956
Segment profit (loss) (245,546) (806,891) (320,446)
Total assets 12,424,801 13,245,175 12,424,801 13,245,175 3,446,319
Capital expenditures 61,053 1,295,105 2,719
Total depreciation & amortization 813,172 487,073 70,146
Other Segments [Member]
Segment Reporting Information [Line Items]
Segment profit (loss) (3,699,637) (3,699,094) (4,192,707)
Total assets 7,207,327 7,438,406 7,207,327 7,438,406 7,269,781
Capital expenditures 117,464 144,955 146,162
Total depreciation & amortization $ 154,653 $ 145,588 $ 152,577
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Note 10 - Supplemental Cash Flow Information (Details) - Supplemental Cash Flow Information (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Supplemental Cash Flow Information [Abstract]
Income taxes paid $ 1,896,274 $ 2,417,238 $ 1,173,717
Interest 193,022 20,000
Accrued Inventory 245,183 246,647 260,441
Dividend payable 721,536 675,422 667,532
Non-Cash Investing Activities:
Sale or distribution of assets in exchange for notes receivable 414,353
Acquired interest in U-Swirl 800,000
Accrued capital expenditures $ 175,000
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Note 11 - Employee Benefit Plan (Details) (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Disclosure Text Block Supplement [Abstract]
Defined Contribution Plan, Employers Matching Contribution, Vesting Period 3 years
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay 25.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent 1.50%
Defined Contribution Plan, Employer Discretionary Contribution Amount $ 60,000 $ 60,000 $ 50,000
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Note 12 - Summarized Quarterly Data (Unaudited) (Details) - Quarterly Results of Operations (USD $)
3 Months Ended 12 Months Ended
Feb. 28, 2015
Nov. 30, 2014
Aug. 31, 2014
May 31, 2014
Feb. 28, 2014
Nov. 30, 2013
Aug. 31, 2013
May 31, 2013
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
2015
Total revenue $ 11,167,160 $ 10,561,562 $ 9,457,448 $ 10,322,206 $ 11,063,790 $ 9,279,994 $ 8,663,161 $ 10,177,862 $ 41,508,376 $ 39,184,807 $ 36,315,201
Gross margin before depreciation 3,005,248 3,056,105 2,806,058 3,017,580 3,172,433 2,739,681 2,985,223 3,151,525 11,884,991 12,048,862
Net income (loss) $ 1,386,772 $ 962,378 $ 877,356 $ 711,334 $ 1,486,179 $ 699,174 $ 1,027,784 $ 1,179,307 $ 3,937,840 $ 4,392,444 $ 1,478,212
Basic earnings (loss) per share (in Dollars per share) $ 0.23 $ 0.16 $ 0.14 $ 0.12 $ 0.24 $ 0.11 $ 0.17 $ 0.19 $ 0.64 $ 0.72 $ 0.24
Diluted earnings (loss) per share (in Dollars per share) $ 0.22 $ 0.15 $ 0.14 $ 0.11 $ 0.23 $ 0.11 $ 0.16 $ 0.19 $ 0.61 $ 0.68 $ 0.24
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Note 13 - Goodwill and Intangible Assets (Details) (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization $ 361,723 $ 97,578 $ 8,316
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Note 13 - Goodwill and Intangible Assets (Details) - Intangible Assets (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Intangible assets subject to amortization
Intangible assets subject to amortization, gross carrying value $ 7,082,211 $ 6,935,955
Intangible assets subject to amortization, accumulated amortization 1,202,323 854,524
Intangible assets not subject to amortization Franchising segment-
Intangible assets not subject to amortization, gross carrying value 3,639,857 3,725,857
Intangible assets subject to amortization, accumulated amortization 662,384 662,384
Total intangible assets 10,722,068 10,661,812
Total intangible assets 1,864,707 1,516,908
Company Stores Goodwill [Member]
Intangible assets not subject to amortization Franchising segment-
Intangible assets not subject to amortization, gross carrying value 1,122,328 1,208,328
Intangible assets subject to amortization, accumulated amortization 267,020 267,020
Franchising Goodwill [Member]
Intangible assets not subject to amortization Franchising segment-
Intangible assets not subject to amortization, gross carrying value 2,202,529 [1] 2,202,529 [1]
Intangible assets subject to amortization, accumulated amortization 197,682 [1] 197,682 [1]
Manufacturing Segment-Goodwill [Member]
Intangible assets not subject to amortization Franchising segment-
Intangible assets not subject to amortization, gross carrying value 295,000 295,000
Intangible assets subject to amortization, accumulated amortization 197,682 197,682
Trademarks [Member]
Intangible assets not subject to amortization Franchising segment-
Intangible assets not subject to amortization, gross carrying value 20,000 20,000
Minimum [Member] | Packaging Licenses [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 3 years
Minimum [Member] | Trademarks and Non-Competition Agreement [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 5 years [1]
Maximum [Member] | Packaging Licenses [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 5 years
Maximum [Member] | Trademarks and Non-Competition Agreement [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 20 years [1]
Store Design [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 10 years
Intangible assets subject to amortization, gross carrying value 220,778 220,778
Intangible assets subject to amortization, accumulated amortization 208,152 206,652
Packaging Licenses [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, gross carrying value 120,830 120,830
Intangible assets subject to amortization, accumulated amortization 120,830 120,830
Packaging Design [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 10 years
Intangible assets subject to amortization, gross carrying value 430,973 430,973
Intangible assets subject to amortization, accumulated amortization 430,973 430,973
Trademarks and Non-Competition Agreement [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, gross carrying value 459,340 [1] 459,340 [1]
Intangible assets subject to amortization, accumulated amortization 31,538 [1] 5,283 [1]
Franchise Rights [Member]
Intangible assets subject to amortization
Intangible assets subject to amortization, amortization period (years) 20 years [1]
Intangible assets subject to amortization, gross carrying value 5,850,290 [1] 5,704,034 [1]
Intangible assets subject to amortization, accumulated amortization $ 410,830 [1] $ 90,786 [1]
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Note 13 - Goodwill and Intangible Assets (Details) - Estimated Future Amortization Expense (USD $)
Feb. 28, 2015
Estimated Future Amortization Expense [Abstract]
2016 $ 369,864
2017 401,872
2018 417,972
2019 424,402
2020 411,245
Thereafter 3,854,533
Total $ 5,879,888
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Note 14 - Restructuring and Acquisition Related Charges (Details) (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Jan. 17, 2014
Feb. 20, 2014
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Restructuring Charges $ 807,476 $ 786,013
U-Swirl, Inc. [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Number of Restaurants 1
Yogli Mogli [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Number of Restaurants 4
Fuzzy Peach [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Number of Restaurants 17
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Restructuring Charges 124,551 786,013
U-Swirl, Inc. [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Restructuring Charges 503,526
Reorganization Proposal [Member]
Note 14 - Restructuring and Acquisition Related Charges (Details) [Line Items]
Restructuring Charges $ 179,399
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Note 14 - Restructuring and Acquisition Related Charges (Details) - Restructuring Charges Incurred (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Fresh-Start Adjustment [Line Items]
Restructuring charges $ 807,476 $ 786,013
Restructuring: Professional Fees [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges 284,275 763,168
Employee Severance [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges 212,027
Leasehold Improvements and Impairment of Assets [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges 243,000
Termination of Contractual Obligations [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges 22,845
Restricted Stock Unit Vesting [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges 65,049
Other Restructuring [Member]
Fresh-Start Adjustment [Line Items]
Restructuring charges $ 3,125
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Note 15 - Related Party Transactions (Details) (USD $)
1 Months Ended 3 Months Ended 2 Months Ended 12 Months Ended
Jul. 31, 2014
Feb. 09, 2015
Nov. 28, 2014
Feb. 28, 2015
Note 15 - Related Party Transactions (Details) [Line Items]
Treasury Stock Acquired, Average Cost Per Share $ 12.58 $ 13.35 $ 12.19
Immediate Family Member of Management or Principal Owner [Member]
Note 15 - Related Party Transactions (Details) [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party $ 15,300
Stock Purchase Agreements [Member]
Note 15 - Related Party Transactions (Details) [Line Items]
Treasury Stock, Shares, Acquired 80,000
Treasury Stock Acquired, Average Cost Per Share $ 12.32
Discount Percent ,Price Paid for Shares 3.00%
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Note 16 - Subsequent Events (Details) (USD $)
0 Months Ended
May 21, 2015
Jan. 13, 2015
Jul. 15, 2014
Note 16 - Subsequent Events (Details) [Line Items]
Stock Repurchase Program, Authorized Amount $ 2,058,000 $ 3,000,000
Subsequent Event [Member]
Note 16 - Subsequent Events (Details) [Line Items]
Stock Repurchase Program, Authorized Amount $ 3,000,000
Common Stock, Dividends, Per Share, Declared $ 0.12
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Note 17 - Net Income and Transfers (to) From Non-controlling Interest (Details) - The Effect of Changes in Rocky Mountain Chocolate Factory’s Ownership Interest in U-Swirl (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Redeemable Noncontrolling Interest [Line Items]
Changes from net loss and transfers from non-controlling interest $ (195,094) $ (1,257,940) $ (128,178)
U-Swirl common stock issued, at fair value, for business acquisitions* 664,612
Change to ownership interest resulting from stock issuances 663,110 [1] 654,072 [1] 469,089 [1]
U-Swirl, Inc. [Member]
Redeemable Noncontrolling Interest [Line Items]
Net Income (loss) attributable to RMCF shareholders (117,140) (868,543)
Net transfers from non-controlling interest 382,306 498,502
Changes from net loss and transfers from non-controlling interest 265,166 (370,041)
U-Swirl expense recorded for equity based compensation 61,008 62,000
U-Swirl common stock issued, at fair value, for business acquisitions* 750,036 [2]
U-Swirl, Inc common stock issued upon the exercise of stock options and warrants 357,158 34,189
Change to ownership interest resulting from stock issuances $ (35,860) $ (347,723)
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.The accompanying notes are an integral part of these consolidated financial statements.
[2] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
12 Months Ended 0 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Jan. 17, 2014
Feb. 20, 2014
Restructuring and Acquisition Related Charges [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Business Combination, Acquisition Related Costs $ 124,551 $ 786,475
CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Number of Restaurants 1
Payments to Acquire Businesses, Gross 4,250,000 4,250,000
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued (in Shares) 4
Yogli Mogli [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Number of Restaurants 4
Payments to Acquire Businesses, Gross 2,150,000 2,150,000
Other Significant Noncash Transaction, Value of Consideration Given 200,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Gift Card Liability 149,529
Business Combination, Shares Withheld, Value 200,000
Fuzzy Peach [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Number of Restaurants 17
Payments to Acquire Businesses, Gross 627,754 481,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High 349,000
Fuzzy Peach [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Number of Restaurants 17
Business Combination, Contingent Consideration, Liability $ 146,257
U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) [Line Items]
Share Price (in Dollars per share) $ 0.24
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Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments (USD $)
Feb. 28, 2015
Feb. 28, 2014
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Goodwill $ 2,977,473 [1] $ 3,063,473 [1]
Yogli Mogli [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 142,000 142,000
Yogli Mogli [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 1,123,000 1,123,000
Yogli Mogli [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 6,000 6,000
Yogli Mogli [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Café Store Assets 1,003,000 1,003,000
Goodwill 83,529 83,529
Assets 2,357,529 2,357,529
CherryBerry [Member] | Cafe Store Goodwill [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Goodwill 23,000 23,000
CherryBerry [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 287,000 287,000
CherryBerry [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 2,817,000 2,817,000
CherryBerry [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 21,000 21,000
CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Café Store Assets 238,000 238,000
Goodwill 1,824,000 1,824,000
Assets 5,210,000 5,210,000
Reported Value Measurement [Member] | Yogli Mogli [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 156,000
Reported Value Measurement [Member] | Yogli Mogli [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 1,201,000
Reported Value Measurement [Member] | Yogli Mogli [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 6,000
Reported Value Measurement [Member] | Yogli Mogli [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Café Store Assets 1,003,000
Goodwill 54,500
Assets 2,420,500
Reported Value Measurement [Member] | CherryBerry [Member] | Cafe Store Goodwill [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Goodwill 23,000
Reported Value Measurement [Member] | CherryBerry [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 405,000
Reported Value Measurement [Member] | CherryBerry [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 3,615,000
Reported Value Measurement [Member] | CherryBerry [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets 23,000
Reported Value Measurement [Member] | CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Café Store Assets 238,000
Goodwill 3,006,000
Assets 7,310,000
Changes Measurement [Member] | Yogli Mogli [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets (14,000)
Changes Measurement [Member] | Yogli Mogli [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets (78,000)
Changes Measurement [Member] | Yogli Mogli [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Goodwill 29,029
Assets (62,971)
Changes Measurement [Member] | CherryBerry [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets (118,000)
Changes Measurement [Member] | CherryBerry [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets (798,000)
Changes Measurement [Member] | CherryBerry [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Intangible assets (2,000)
Changes Measurement [Member] | CherryBerry [Member] | U-Swirl, Inc. [Member]
Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Adjustments [Line Items]
Goodwill (1,182,000)
Assets $ (2,100,000)
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Note 18 - Acquisition of Cherryberry, Yogli Mogli, and Fuzzy Peach (Details) - Purchase Price Allocation (USD $)
0 Months Ended 12 Months Ended 0 Months Ended
Jan. 17, 2014
Feb. 28, 2015
Feb. 20, 2014
Feb. 28, 2014
Business Acquisition [Line Items]
Goodwill $ 2,977,473 [1] $ 3,063,473 [1]
CherryBerry [Member] | Cafe Store Goodwill [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Goodwill 23,000 23,000
CherryBerry [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 287,000 287,000
CherryBerry [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 2,817,000 2,817,000
CherryBerry [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 21,000 21,000
CherryBerry [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Total assets acquired 5,210,000 5,210,000
Common stock – U-Swirl 960,000
Cash 4,250,000 4,250,000
Total consideration paid 5,210,000
Café store assets 238,000 238,000
Goodwill 1,824,000 1,824,000
Yogli Mogli [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 142,000 142,000
Yogli Mogli [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 1,123,000 1,123,000
Yogli Mogli [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 6,000 6,000
Yogli Mogli [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Total assets acquired 2,357,529 2,357,529
Cash 2,150,000 2,150,000
Lease liabilities assumed (58,000)
Gift card liabilities assumed (149,529)
Total consideration paid 2,150,000
Café store assets 1,003,000 1,003,000
Goodwill 83,529 83,529
Fuzzy Peach [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 627,754
Fuzzy Peach [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Total assets acquired 627,754 481,497
Cash 627,754 481,000
Assets acquired – Earn out 146,257
Total consideration paid 627,754
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member] | Cafe Store Goodwill [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Goodwill 23,000
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member] | Trademarks [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 429,000
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member] | Franchise Rights [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 4,567,754
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member] | Noncompete Agreements [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Intangible assets 27,000
Cherryberry, Yogli Mogli, And Fuzzy Peach [Member] | U-Swirl, Inc. [Member]
Business Acquisition [Line Items]
Total assets acquired 8,195,283 8,049,026
Common stock – U-Swirl 960,000
Cash 7,027,754
Assets acquired – Earn out 146,257
Lease liabilities assumed (58,000)
Gift card liabilities assumed (149,529)
Total consideration paid 7,987,754
Café store assets 1,241,000
Goodwill $ 1,907,529
[1] February 28, 2014 balances have been revised as discussed in Note 18 to the consolidated financial statements.
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Schedule II - Valuation and Qualifying Accounts (Details) - Valuation and Qualifying Accounts (USD $)
12 Months Ended
Feb. 28, 2015
Feb. 28, 2014
Feb. 28, 2013
Valuation and Qualifying Accounts [Abstract]
Valuation Allowance for Accounts and Notes Receivable Beginning Balance $ 600,930 $ 595,588 $ 584,151
Valuation Allowances And Reserves Charged To Cost And Expense 214,600 216,000 330,000
Valuation Allowances And Reserves Deductions 86,470 210,658 318,563
Valuation Allowance for Accounts and Notes Receivable Ending Balance $ 729,060 $ 600,930 $ 595,588
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