Rocky Mountain Chocolate Factory Closes $2.2 Million Private Placement, Led by Strategic Investment from American Heritage Railways
Rocky Mountain Chocolate Factory (RMCF) has closed a $2.2 million private placement led by American Heritage Railways. The company sold 1.25 million shares at $1.75 per share, a 15% premium to the closing price on August 5, 2024. This PIPE financing aims to strengthen RMCF's balance sheet and provide working capital for its updated three-year strategic plan. Interim CEO Jeff Geygan mentioned that a separate non-equity financing is in the final stages, which is expected to provide capital for executing plans to return RMCF to sustainable growth and profitability.
American Heritage Railways, a Durango-based company touching over 2 million customers annually through railroads, attractions, and licensing events, is welcomed as a new strategic shareholder. Their customer base is seen as a natural fit for RMCF's premium products. The securities sold in this private placement are not registered under the Securities Act of 1933 and have resale restrictions.
Rocky Mountain Chocolate Factory (RMCF) ha concluso un collocamento privato da 2,2 milioni di dollari guidato da American Heritage Railways. L'azienda ha venduto 1,25 milioni di azioni a 1,75 dollari per azione, con un premio del 15% rispetto al prezzo di chiusura del 5 agosto 2024. Questo finanziamento PIPE mira a rafforzare il bilancio di RMCF e a fornire capitale operativo per il suo aggiornato piano strategico triennale. Il CEO ad interim Jeff Geygan ha menzionato che un finanziamento non azionario separato è nelle fasi finali, e si prevede che fornisca capitale per attuare piani volti a riportare RMCF verso una crescita sostenibile e una redditizia.
American Heritage Railways, un'azienda con sede a Durango che tocca oltre 2 milioni di clienti all'anno attraverso ferrovie, attrazioni ed eventi di licenza, è accolta come nuovo azionista strategico. La loro base clienti è vista come una situazione naturale per i prodotti premium di RMCF. I titoli venduti in questo collocamento privato non sono registrati ai sensi del Securities Act del 1933 e presentano restrizioni alla rivendita.
Rocky Mountain Chocolate Factory (RMCF) ha cerrado una colocación privada de 2.2 millones de dólares liderada por American Heritage Railways. La compañía vendió 1.25 millones de acciones a 1.75 dólares por acción, un 15% por encima del precio de cierre del 5 de agosto de 2024. Este financiamiento PIPE tiene como objetivo fortalecer el balance general de RMCF y proporcionar capital de trabajo para su actualizado plan estratégico a tres años. El CEO interino Jeff Geygan mencionó que un financiamiento no relacionado con acciones está en las etapas finales, que se espera proporcione capital para ejecutar planes que devuelvan a RMCF a un crecimiento sostenible y rentable.
American Heritage Railways, una empresa con sede en Durango que llega a más de 2 millones de clientes anualmente a través de ferrocarriles, atracciones y eventos de licencia, es bienvenida como un nuevo accionista estratégico. Su base de clientes se considera una combinación natural para los productos premium de RMCF. Los valores vendidos en esta colocación privada no están registrados bajo la Ley de Valores de 1933 y tienen restricciones de reventa.
록키 마운틴 초콜릿 팩토리(RMCF)는 아메리칸 헤리티지 레일웨이(American Heritage Railways)가 주도한
아메리칸 헤리티지 레일웨이는 매년 200만 고객 이상을 철도, 관광지 및 라이선스 이벤트를 통해 접촉하는 듀랜고에 본사를 둔 회사입니다. 그들의 고객 기반은 RMCF의 프리미엄 제품과 자연스럽게 어울리는 것으로 보입니다. 이 사모펀드에서 판매된 증권은 1933년 증권법에 따라 등록되지 않았으며 재판매 제한이 있습니다.
Rocky Mountain Chocolate Factory (RMCF) a finalisé une placement privé de 2,2 millions de dollars dirigé par American Heritage Railways. L'entreprise a vendu 1,25 million d'actions à 1,75 dollar par action, soit une prime de 15 % par rapport au cours de clôture du 5 août 2024. Ce financement PIPE vise à renforcer le bilan de RMCF et à fournir du capital de travail pour son plan stratégique triennal mis à jour. Le PDG par intérim Jeff Geygan a mentionné qu'un financement non lié aux actions est dans les dernières étapes, et il est prévu qu'il fournisse des capitaux pour exécuter des plans visant à ramener RMCF à une croissance durable et à la rentabilité.
American Heritage Railways, une entreprise basée à Durango qui touche plus de 2 millions de clients par an via des chemins de fer, attractions et événements sous licence, est accueillie comme nouvel actionnaire stratégique. Leur base de clients est perçue comme un ajustement naturel pour les produits haut de gamme de RMCF. Les titres vendus dans ce placement privé ne sont pas enregistrés au titre de la Loi de 1933 sur les valeurs mobilières et sont soumis à des restrictions de revente.
Die Rocky Mountain Chocolate Factory (RMCF) hat eine Private Placement in Höhe von 2,2 Millionen Dollar abgeschlossen, die von American Heritage Railways geleitet wird. Das Unternehmen verkaufte 1,25 Millionen Aktien zu einem Preis von 1,75 Dollar pro Aktie, was einen Aufschlag von 15% auf den Schlusskurs vom 5. August 2024 darstellt. Diese PIPE-Finanzierung zielt darauf ab, die Bilanz von RMCF zu stärken und Betriebskapital für den aktualisierten dreijährigen strategischen Plan bereitzustellen. Der vorläufige CEO Jeff Geygan erwähnte, dass sich eine separate Nicht-Eigenkapitalfinanzierung in der Endphase befindet, die voraussichtlich Kapital für die Umsetzung der Pläne zur Rückkehr von RMCF zu nachhaltigem Wachstum und Rentabilität bereitstellen wird.
American Heritage Railways, ein in Durango ansässiges Unternehmen, das jährlich über 2 Millionen Kunden durch Eisenbahnen, Attraktionen und Lizenzveranstaltungen erreicht, wird als neuer strategischer Aktionär begrüßt. Ihre Kundenbasis wird als natürliche Ergänzung zu RMCFs Premium-Produkten angesehen. Die in diesem privaten Platzierung verkauften Wertpapiere sind nicht gemäß dem Securities Act von 1933 registriert und unterliegen Rückverkaufsbeschränkungen.
- Raised $2.2 million in gross proceeds through PIPE financing
- Shares sold at a 15% premium to the closing stock price
- Strategic investment from American Heritage Railways, potentially opening new distribution channels
- Additional non-equity financing in final stages to provide capital for growth plans
- Dilution of existing shareholders due to issuance of 1.25 million new shares
- Securities not registered under Securities Act, limiting resale options
Insights
The
The strategic investment from American Heritage Railways (AHR) could open new distribution channels, given AHR's extensive customer base of over 2 million annually. This partnership may boost RMCF's revenue streams, especially if they can leverage AHR's licensing rights for popular brands like The Polar Express™ and Peanuts™.
Investors should note that while this financing provides immediate working capital, RMCF's mention of a separate non-equity financing suggests ongoing financial challenges. The company's focus on returning to sustainable growth and profitability implies current operational struggles that require careful monitoring.
The strategic partnership between Rocky Mountain Chocolate Factory and American Heritage Railways presents an intriguing market synergy. AHR's customer base of 2 million annual visitors, primarily tourists seeking experiences, aligns well with RMCF's premium chocolate offerings. This could lead to increased brand exposure and sales opportunities in high-traffic tourist areas.
However, investors should consider the broader confectionery market trends. The premium chocolate segment has been growing, but faces challenges from health-conscious consumers and alternative snack options. RMCF's success will depend on how effectively they can position their products within AHR's entertainment ecosystem and adapt to changing consumer preferences.
The company's mention of an updated three-year strategic plan suggests a recognition of needed changes. Investors should watch for details of this plan and its implementation, as it will be important for RMCF's long-term market position and growth prospects.
The private placement structure of this financing is noteworthy from a legal perspective. By conducting a PIPE transaction, RMCF avoids the more rigorous process of a public offering, allowing for a faster capital raise. However, this approach limits the pool of potential investors to accredited individuals or institutions.
The registration rights agreement is a standard feature in PIPE deals, providing investors with liquidity by requiring the company to register the shares for resale. This obligation could lead to future costs and regulatory burdens for RMCF.
Investors should be aware that the securities are currently restricted and cannot be freely traded. The company's commitment to file a registration statement with the SEC is important for future liquidity. Additionally, the participation of board member Steve Craig in the offering raises potential conflict of interest considerations, which should be carefully managed to ensure compliance with corporate governance best practices.
DURANGO, Colo., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory Inc. (Nasdaq: RMCF) (the “Company”, “we”, or “RMCF”), an international franchisor and producer of premium chocolates and other confectionery products, including gourmet caramel apples, has closed a securities purchase agreement for a private investment in public equity ("PIPE") financing that resulted in gross proceeds of approximately
Pursuant to the terms of the securities purchase agreement, RMCF sold an aggregate of 1.25 million shares of its common stock at a price of
The PIPE financing is being led by American Heritage Railways, a Durango-based railway and entertainment company that provides experiences world-wide. Current RMCF board member Steve Craig is also participating in the offering.
“This offering reflects an initial step for us to strengthen our balance sheet and provides the working capital needed to further advance our updated three-year strategic plan,” said Interim CEO Jeff Geygan. “We are in the final stages of completing a separate non-equity financing that we believe will provide us with the necessary capital required to execute our plans and return RMCF to a state of sustainable growth and profitability.”
“We are also pleased to welcome American Heritage Railways (“AHR”) as a new strategic shareholder,” Geygan added, “AHR is one of the most renowned organizations in Durango, CO, and touches more than 2 million customers per year through directly owned railroads, historic attractions, and the licensing of special events at over 50 additional properties. These licensing rights include The Polar Express™ and Peanuts by Schulz™, among others. Their customer base is a natural fit for our premium chocolate and confectionary products.”
The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended, and may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Concurrently with the execution of the securities purchase agreement, RMCF and the investors entered into a registration rights agreement pursuant to which the Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock sold in the PIPE financing.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
Forward-Looking Statements
This press release includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These forward-looking statements involve various risks and uncertainties. The statements, other than statements of historical fact, included in this press release are forward-looking statements. Many of the forward-looking statements contained in this document may be identified by the use of forward-looking words such as "will," "intend," "believe," "expect," "anticipate," "should," "plan," "estimate," "potential," or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future - including statements expressing general views about future operating results - are forward-looking statements. Management of the Company believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause our Company’s actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: inflationary impacts, changes in the confectionery business environment, seasonality, consumer interest in our products, receptiveness of our products internationally, consumer and retail trends, costs and availability of raw materials, competition, the success of our co-branding strategy, the success of international expansion efforts and the effect of government regulations. For a detailed discussion of the risks and uncertainties that may cause our actual results to differ from the forward-looking statements contained herein, please see the section entitled “Risk Factors” contained in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, each filed with the Securities and Exchange Commission.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc. is an international franchiser of premium chocolate and confection stores, and a producer of an extensive line of premium chocolates and other confectionery products, including gourmet caramel apples. Rocky Mountain Chocolate Factory was named one of America’s Best on Newsweek's list of "America's Best Retailers 2023" in the chocolate and candy stores category. The Company is headquartered in Durango, Colorado. The Company and its franchisees and licensees operate over 260 Rocky Mountain Chocolate stores across the United States, with several international locations. The Company's common stock is listed on the Nasdaq Global Market under the symbol "RMCF."
Investor Contact
Sean Mansouri, CFA
Elevate IR
720-330-2829
RMCF@elevate-ir.com
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