Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | May 31, 2024 | Aug. 31, 2023 | |
Cover [Abstract] | ||||
Entity Central Index Key | 0001616262 | |||
Entity Registrant Name | Rocky Mountain Chocolate Factory, Inc. | |||
Amendment Flag | false | |||
Current Fiscal Year End Date | --02-29 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2024 | |||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Period End Date | Feb. 29, 2024 | |||
Document Transition Report | false | |||
Entity File Number | 001-36865 | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Tax Identification Number | 47-1535633 | |||
Entity Address, Address Line One | 265 Turner Drive | |||
Entity Address, City or Town | Durango | |||
Entity Address, State or Province | CO | |||
Entity Address, Postal Zip Code | 81303 | |||
City Area Code | 970 | |||
Local Phone Number | 259-0554 | |||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |||
Trading Symbol | RMCF | |||
Security Exchange Name | NASDAQ | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
ICFR Auditor Attestation Flag | false | |||
Document Financial Statement Error Correction [Flag] | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 27,685,881 | |||
Entity Common Stock, Shares Outstanding | 6,332,506 | |||
Documents Incorporated by Reference [Text Block] | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement in connection with the 2024 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference in Part III of this Annual Report on Form 10-K. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended February 29, 2024. | |||
Auditor Name | CohnReznick, LLP | Plante & Moran, PLLC | ||
Auditor Location | New York, NY | Cleveland, Ohio | ||
Auditor Firm ID | 596 | 166 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Revenues | |||
Total revenue | $ 27,950,687 | $ 30,432,352 | $ 29,488,548 |
Costs and Expenses | |||
Cost of sales | 20,655,629 | 20,455,373 | 18,610,739 |
Sales and marketing | 2,131,734 | 2,060,215 | 1,474,807 |
General and administrative | 6,673,929 | 10,325,633 | 7,456,314 |
Depreciation and amortization, exclusive of depreciation and amortization expense of $749,606, $646,394, and $620,798 respectively, included in cost of sales | 137,693 | 118,869 | 119,377 |
Total costs and expenses | 32,852,843 | 35,323,355 | 30,183,070 |
Loss from Operations | (4,902,156) | (4,891,003) | (694,522) |
Other Income (Expense) | |||
Interest expense | (53,397) | (10,431) | 0 |
Interest income | 79,836 | 26,921 | 10,870 |
Gain on insurance recovery | 0 | 0 | 167,123 |
Other income, net | 26,439 | 16,490 | 177,993 |
Loss Before Income Taxes | (4,875,717) | (4,874,513) | (516,529) |
Income Tax Provision (Benefit) | 0 | 613,843 | (16,812) |
Loss from Continuing Operations | (4,875,717) | (5,488,356) | (499,717) |
Earnings (loss) from discontinued operations, net of tax | 703,834 | (192,422) | 158,020 |
Net Loss | $ (4,171,883) | $ (5,680,778) | $ (341,697) |
Basic Loss per Common Share | |||
Loss from continuing operations | $ (0.77) | $ (0.88) | $ (0.08) |
Earnings (loss) from discontinued operations | 0.11 | (0.03) | 0.02 |
Net loss | (0.66) | (0.91) | (0.06) |
Diluted Loss per Common Share | |||
Loss from continuing operations | (0.77) | (0.88) | (0.08) |
Earnings (loss) from discontinued operations | 0.11 | (0.03) | 0.02 |
Net loss | $ (0.66) | $ (0.91) | $ (0.06) |
Weighted Average Common Shares Outstanding - Basic | 6,294,411 | 6,226,279 | 6,140,687 |
Dilutive Effect of Employee Stock Awards | 0 | 0 | 0 |
Weighted Average Common Shares Outstanding - Diluted | 6,294,411 | 6,226,279 | 6,140,687 |
Product [Member] | |||
Revenues | |||
Total revenue | $ 22,022,310 | $ 24,456,910 | $ 23,534,470 |
Franchise and Royalty Fees [Member] | |||
Revenues | |||
Total revenue | 5,928,377 | 5,975,442 | 5,954,078 |
Franchise [Member] | |||
Costs and Expenses | |||
Costs | 2,582,371 | 1,825,783 | 1,914,944 |
Retail [Member] | |||
Costs and Expenses | |||
Costs | $ 671,487 | $ 537,482 | $ 606,889 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Income Statement [Abstract] | |||
Amortization expense included in cost of goods sold | $ 749,606 | $ 646,394 | $ 620,798 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 |
Current Assets | ||
Cash and cash equivalents | $ 2,082,014 | $ 4,717,068 |
Accounts receivable, less allowance for credit losses of $331,902 and $666,315, respectively | 2,183,685 | 2,055,694 |
Notes receivable, current portion, less current portion of the allowance for credit losses of $29,886 and $35,173, respectively | 489,245 | 23,698 |
Refundable income taxes | 45,969 | 344,885 |
Inventories | 4,358,401 | 3,639,780 |
Other | 443,336 | 340,847 |
Current assets held for sale | 0 | 83,004 |
Total current assets | 9,602,650 | 11,204,976 |
Property and Equipment, Net | 7,757,655 | 5,710,739 |
Other Assets | ||
Notes receivable, less current portion and allowance for credit losses of $0 and $38,778, respectively | 695,432 | 94,076 |
Goodwill | 575,608 | 575,608 |
Intangible assets, net | 237,897 | 265,927 |
Lease right of use asset | 1,693,970 | 2,355,601 |
Other | 14,006 | 14,054 |
Long-term assets held for sale | 0 | 1,765,846 |
Total other assets | 3,216,913 | 5,071,112 |
Total Assets | 20,577,218 | 21,986,827 |
Current Liabilities | ||
Accounts payable | 3,409,892 | 2,189,760 |
Line of credit | 1,250,000 | 0 |
Accrued salaries and wages | 1,832,851 | 978,606 |
Gift card liabilities | 624,335 | 592,932 |
Other accrued expenses | 300,862 | 162,346 |
Contract liabilities | 150,494 | 161,137 |
Lease liability | 503,362 | 746,506 |
Current liabilities held for sale | 0 | 178,939 |
Total current liabilities | 8,071,796 | 5,010,226 |
Lease Liability, Less Current Portion | 1,191,109 | 1,640,017 |
Contract Liabilities, Less Current Portion | 678,154 | 782,278 |
Long-term liabilities - held for sale | 0 | 184,142 |
Total Liabilities | 9,941,059 | 7,616,663 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock, $.001 par value per share;250,000 authorized; 0 shares issued and outstanding | 0 | 0 |
Common stock, $.001 par value, 46,000,000 shares authorized, 6,310,543 shares and 6,257,137 shares issued and outstanding, respectively | 6,306 | 6,257 |
Additional paid-in capital | 9,895,704 | 9,457,875 |
Retained earnings | 734,149 | 4,906,032 |
Total stockholders' equity | 10,636,159 | 14,370,164 |
Total Liabilities and Stockholders' Equity | $ 20,577,218 | $ 21,986,827 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 |
Accounts receivable, allowance for credit losses | $ 331,902 | $ 666,315 |
Notes receivable, allowance for credit losses, current | 29,886 | 35,173 |
Notes receivable, allowance for credit losses, noncurrent | $ 0 | $ 38,778 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 250,000 | 250,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 46,000,000 | 46,000,000 |
Common stock, shares issued (in shares) | 6,310,543 | 6,257,137 |
Common stock, shares outstanding (in shares) | 6,310,543 | 6,257,137 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Balance at Feb. 28, 2021 | $ 18,967,569 | $ 6,074 | $ 7,971,712 | $ 10,989,783 |
Balance (in shares) at Feb. 28, 2021 | 6,074,293 | |||
Issuance of common stock, vesting of restricted stock units and other, net of shares withheld | 46,610 | $ 9 | 46,601 | 0 |
Issuance of common stock, vesting of restricted stock units and other, net of shares withheld (in shares) | 9,000 | |||
Equity compensation, restricted stock units, net of shares withheld | 788,720 | $ 103 | 788,617 | 0 |
Equity compensation, restricted stock units, net of shares withheld (in shares) | 103,063 | |||
Net loss attributable to RMCF stockholders | (341,697) | $ 0 | 0 | (341,697) |
Redemption of outstanding preferred stock purchase rights | (61,276) | 0 | 0 | (61,276) |
Balance at Feb. 28, 2022 | 19,399,926 | $ 6,186 | 8,806,930 | 10,586,810 |
Balance (in shares) at Feb. 28, 2022 | 6,186,356 | |||
Equity compensation, restricted stock units, net of shares withheld | 651,016 | $ 71 | 650,945 | 0 |
Equity compensation, restricted stock units, net of shares withheld (in shares) | 70,781 | |||
Net loss attributable to RMCF stockholders | (5,680,778) | $ 0 | 0 | (5,680,778) |
Balance at Feb. 28, 2023 | 14,370,164 | $ 6,257 | 9,457,875 | 4,906,032 |
Balance (in shares) at Feb. 28, 2023 | 6,257,137 | |||
Equity compensation, restricted stock units, net of shares withheld | 437,878 | $ 49 | 437,829 | 0 |
Equity compensation, restricted stock units, net of shares withheld (in shares) | 48,890 | |||
Net loss attributable to RMCF stockholders | (4,171,883) | $ 0 | 0 | (4,171,883) |
Balance at Feb. 29, 2024 | $ 10,636,159 | $ 6,306 | $ 9,895,704 | $ 734,149 |
Balance (in shares) at Feb. 29, 2024 | 6,306,027 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Cash Flows From Operating Activities | |||
Net Income (Loss) | $ (4,171,883) | $ (5,680,778) | $ (341,697) |
Less: Net Income (Loss) from discontinued operations, net of tax | 703,834 | (192,422) | 158,020 |
Net Loss from continuing operations | (4,875,717) | (5,488,356) | (499,717) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 887,299 | 765,263 | 740,175 |
Provision for obsolete inventory | 188,786 | 732,499 | 384,473 |
Provision for loss (recovery) on accounts and notes receivable | (402,117) | (277,000) | 0 |
Asset impairment and store closure losses | 0 | 84,183 | 0 |
Loss (gain) on sale or disposal of property and equipment | (37,002) | 11,958 | (159,129) |
Expense recorded for stock compensation | 437,829 | 651,016 | 1,073,115 |
Deferred income taxes | 0 | 722,163 | (267,576) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 227,053 | 82,050 | 46,311 |
Refundable income taxes | 298,916 | 391,643 | 37,999 |
Inventories | (878,771) | (70,069) | (581,433) |
Other current assets | (101,466) | (7,246) | (122,647) |
Accounts payable | 974,769 | 661,111 | 200,557 |
Accrued liabilities | 999,483 | (1,163,216) | 1,332,993 |
Contract liabilities | (114,767) | 5,384 | 26,321 |
Net cash (used in) provided by operating activities of continuing operations | (2,395,705) | (2,898,617) | 2,211,442 |
Net cash provided by (used in) operating activities of discontinued operations | (39,242) | 796,126 | 646,712 |
Net cash (used in) provided by operating activities | (2,434,947) | (2,102,491) | 2,858,154 |
Cash Flows from Investing Activities | |||
Addition to notes receivable | (135,955) | (64,621) | 0 |
Proceeds received on notes receivable | 163,989 | 62,411 | 109,809 |
Proceeds from insurance recovery | 0 | 0 | 206,336 |
Proceeds from the sale or distribution of assets | 112,131 | 27,289 | 2,693 |
Purchases of property and equipment | (3,017,473) | (1,000,015) | (941,327) |
Other | 9,463 | 10,000 | (10,000) |
Net cash used in investing activities of continuing operations | (2,867,845) | (964,936) | (632,489) |
Net cash provided by investing activities of discontinued operations | 1,417,738 | 197,121 | 27,491 |
Net cash used in investing activities | (1,450,107) | (767,815) | (604,998) |
Cash Flows from Financing Activities | |||
Repurchase of common stock through net settlement of restricted stock units | 0 | 0 | (237,785) |
Proceeds from line of credit | 1,250,000 | 0 | 0 |
Dividends paid and redemption of outstanding preferred stock purchase rights | 0 | 0 | (61,276) |
Net cash (used in) provided by financing activities of discontinued operations | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | 1,250,000 | 0 | (299,061) |
Net Increase (Decrease) in Cash and Cash Equivalents | (2,635,054) | (2,870,306) | 1,954,095 |
Cash and Cash Equivalents, Beginning of Year | 4,717,068 | 7,587,374 | 5,633,279 |
Cash and Cash Equivalents, End of Year | $ 2,082,014 | $ 4,717,068 | $ 7,587,374 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (4,171,883) | $ (5,680,778) | $ (341,697) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Feb. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 29, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | 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., a Delaware corporation, its wholly-owned subsidiaries, Rocky Mountain Chocolate Factory, Inc. (a Colorado corporation), Aspen Leaf Yogurt, LLC (“ALY”), U-Swirl International, Inc. (dissolved in October 2023) (“U-Swirl”), and U-Swirl, Inc. (“SWRL”) (collectively, the “Company”, "we", “RMCF”). 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 (“Durango Products”). The Company also sells its candy in select locations outside of its system of retail stores. On February 24, 2023 the Company entered into an agreement to sell its three Company-owned U-Swirl locations. Separately, on May 1, 2023, subsequent to the 2023 fiscal year end, the Company entered into an agreement to sell its franchise rights and intangible assets related to U-Swirl and associated brands. As a result, the activities of the Company’s U-Swirl subsidiary that have historically been reported in the U-Swirl segment have been reported as discontinued operations. See Note 17 – Discontinued Operations in the Notes to Consolidated Financial Statements for additional information regarding the Company's discontinued operations, including net sales, operating earnings and total assets by segment. The Company’s financial statements reflect continuing operations only, unless otherwise noted. 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; sales at Company-owned stores of chocolates and other confectionery products including gourmet caramel apples; and marketing fees. The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any material derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required. The Company believes the fair values of cash equivalents, accounts and notes receivable, accounts payable and line of credit approximate their carrying amounts due to their short duration. The following table summarizes the number of stores operating under the Rocky Mountain Chocolate Factory brand at February 29, 2024: Stores Opened Closed Sold Stores Rocky Mountain Chocolate Factory Company-owned stores 1 1 - - 2 Franchise stores - Domestic stores 153 5 ( 9 ) - 149 International license stores 4 - ( 1 ) - 3 Cold Stone Creamery - co-branded 101 4 ( 1 ) - 104 U-Swirl - co-branded 10 1 - - 11 Total 269 269 Liquidity and Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In accordance with ASC 205-40, Going Concern, the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued. During the year ended February 29, 2024, the Company incurred a net loss of $ 4.2 million and used cash in operating activities of $ 2.4 million . Additionally, the Company was not in compliance with the requirement under a credit agreement, as amended (the “Credit Agreement”), with Wells Fargo Bank N.A. (the “Lender”) to maintain a ratio of total current assets to total current liabilities of at least 1.5 to 1. The Company's current ratio as of February 29, 2024 was 1.19 to 1. The Company requested and received a waiver from the Lender as of the date the financial statements were available to be issued. The Credit Agreement is set to expire on September 30, 2024. These factors raise substantial doubts about the Company’s ability to continue as a going concern within one year of the date that these consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to continue to implement its business plan. The Company is exploring various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants, which may include the obtaining of waivers from the Lender and/or, amending its Credit Line facility. The Company is also exploring supplemental debt facilities for other operational activities. During the next twelve months the Company intends to sell an unused parcel of land near its headquarters, cut overhead for manufacturing, and increase profits and gross margins through increasing chocolate price sales to its franchising system and Specialty Market customers. In addition, the Company intends to benefit from busy season of holiday product sales and add a CFO to its management teams during the next twelve months. In the event the Company is unable to generate profits, positive cash flow, and implement its business plan, it may have to curtail its business further and no longer continue as a going concern. Basis of Presentation and Consolidation The accompanying consolidated financial statements, which include the accounts of the Company and its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany balances and transactions have been eliminated in consolidation . Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the estimate of the reserve for uncollectible accounts, revenue recognition, reserve for inventory obsolescence, and inputs for assessing goodwill impairment. The Company bases its estimates on historical experience and also on assumptions that the Company believes are reasonable. The Company assesses these estimates on a regular basis; however, actual results could materially differ from these estimates. Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. 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. Accounts and Notes Receivable Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Notes receivable generally reflect the sale of assets. Accounts and notes receivable are stated at the net amount expected to be collected, using an estimate of current expected credit losses to determine the allowance for expected credit losses. The Company evaluates the collectability of its accounts and notes receivable and determines the appropriate allowance for expected credit losses based on a combination of factors, including the aging of the receivables and historical collection trends. When the Company is aware of a customer’s inability to meet its financial obligation, the Company may individually evaluate the related receivable to determine the allowance for expected credit losses. The Company uses specific criteria to determine uncollectible receivables to be written off, including bankruptcy filings, the referral of customer accounts to outside parties for collection, and the length that accounts remain past due. As of February 29, 2024, the Company had $ 2,183,685 of accounts receivable outstanding, inclusive of an allowance for credit losses of $ 331,902 . As of February 29, 2023, the Company had $ 2,055,694 of accounts receivable outstanding, inclusive of an allowance for credit losses of $ 666,315 . On February 29, 2024, the Company had total notes receivable of $ 1,184,677 , of which $ 1,000,000 relates to the U-Swirl note. The U-Swirl note is a three-year secured promissory note in the aggregate original principal amount of $ 1,000,000 . Payment is due May 1, 2026. The remaining balance of notes receivable includes $ 214,563 of notes receivable outstanding and an allowance for credit losses of $ 29,886 associated with these notes, compared to $ 191,725 of notes receivable outstanding and an allowance for credit losses of $ 73,951 on February 28, 2023. The notes require monthly payments and bear interest rates ranging from 4.5 % to 7.0 %. The notes mature through December 2027 and all of the notes receivable are secured by the assets of the location. The Company may experience the failure of its wholesale customers, including its franchisees, to whom it extends credit to pay amounts owed to the Company on time, or at all. Inventories Inventories are stated at the lower of cost or net realizable value, which is adjusted for obsolete, damaged and excess inventories to the lower of cost or net realizable value based on actual differences. The inventory value is determined through analysis of items held in inventory, and, if the recorded value is higher than the net realizable value, the Company records an expense to reduce inventory to its actual net realizable 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, net realizable 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 ranges 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. Income Taxes The Company provides for income taxes pursuant to the asset and liability method. The asset and liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax basis 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. The Company has recorded a deferred tax asset related to historical U-Swirl losses and has determined that these losses are restricted due to a limitation on the deductibility of future losses in accordance with Section 382 of the Internal Revenue Code as a result of the foreclosure transaction. The Company's temporary differences are listed in Note 13. Gift Card Breakage The Company and its franchisees sell gift cards that are redeemable for product in 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 current liabilities in our balance sheets. There are no expiration dates on the Company’s gift cards, and the Company does not charge any service fees. While the Company’s franchisees continue to honor all gift cards presented for payment, the Company may determine the likelihood of redemption to be remote for certain cards due to long periods of inactivity. The Company recognizes breakage from gift cards when the gift card is redeemed by the customer or the Company determines the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The determination of the gift card breakage rate is based upon Company-specific historical redemption patterns. Accrued gift card liability was $ 624,335 and $ 592,932 at February 29, 2024 and February 28, 2023, respectively. The Company recognized breakage of $ 40,218 and $ 59,754 during FY 2024 and FY 2023, respectively. Goodwill Goodwill arose primarily from two transaction types. The first 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. The second type was 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, generally the first day of its fourth quarter, or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. The recoverability of goodwill is evaluated through a comparison of the fair value of each of the Company’s 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’s goodwill is further described in Note 7 to the financial statements. During FY 2023, the Company recorded $ 84,183 of impairment of goodwill associated with its retail segment, and included within general and administrative expense on the Consolidated Statements of Operations. There were no similar impairment charges during FY 2024 or FY 2022. Intangible Assets Intangible assets represent non-physical assets that create future economic value and are primarily composed of packaging design, store design, trademarks and non-competition agreements. Intangible assets are amortized on a straight line basis over periods ranging from 5 years to 20 years based on the expected future economic value of the intangible asset. Intangible assets are recorded at their cost. The Company performs intangible asset impairment testing 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. The Company’s intangible assets are further described in Note 7 to the financial statements. 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. Sales The Company has performance obligations to sell products to franchisees and other customers, and revenue is recognized at a point in time. Control is transferred when the order has been shipped to a customer, utilizing a third party, or at the time of delivery when shipped on the Company’s trucks. Revenue is measured based on the amount of consideration that is expected to be received by the Company for providing goods or services under a contract with a customer. 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 the Company’s 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 The Company recognizes franchise fees over the term of the associated franchise agreeme nt, which is generally a period of 10 years. 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. The Company recognizes no royalty on franchised stores’ retail sales of products purchased from the Company’s manufacturing facility and recognizes a ten percent ( 10 %) royalty on all other sales of product made in store and sold at franchise locations. 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, and 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. Stock-Based Compensation In FY 2021, stockholders approved an amendment and restatement of the 2007 Equity Incentive Plan (as amended and restated, 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. Stock-based compensation expense related to stock awards is measured based on the fair value of the awards granted and recognized as an expense over the requisite service period. The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, generally five to six years. The Company accounts for forfeitures as they occur. Related Party Transactions On December 14, 2022 the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”), by and among the Company, Bradley L. Radoff, an individual (“Radoff”), Andrew T. Berger, an individual, AB Value Partners, LP (“AB Value Partners”), AB Value Management LLC (“AB Value Management” and, together with AB Value Partners, “AB Value” and, together with Radoff, “ABV-Radoff”), and Mary Bradley, an individual, pertaining to, among other things, the dismissal of all pending lawsuits between the parties. Pursuant to the Settlement Agreement, the Company and ABV-Radoff agreed to a “Standstill Period” commencing on the effective date of the agreement and ending on the date that is forty-five (45) days prior to the beginning of the Company’s advance notice period for the nomination of directors at the Company’s 2025 annual meeting of stockholders. During the Standstill Period, ABV-Radoff agreed, subject to certain exceptions, other than in Rule 144 open market broker sale transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, not to sell, offer, or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities of the Company held by ABV-Radoff to any person or entity other than the Company or an affiliate of ABV-Radoff (a “Third Party”) that, to the ABV-Radoff’s knowledge would result in such Third Party, together with its Affiliates and Associates (as such terms are defined in the Settlement Agreement), owning, controlling, or otherwise having beneficial ownership or other ownership interest in the aggregate of more than 4.9 % of the Company’s common stock outstanding at such time, or would increase the beneficial ownership or other ownership interest of any Third Party who, together with its Affiliates and Associates, has a beneficial ownership or other ownership interest in the aggregate of more than 4.9% of the shares Common Stock outstanding at such time (such restrictions collectively, the “Lock-Up Restriction”). On August 3, 2023, the Board of Directors of the Company authorized and approved the issuance of a limited waiver (the “Limited Waiver”) of the Lock-Up Restriction with regard to a sale by ABV-Radoff of up to 200,000 shares of Common Stock to Global Value Investment Corp. (“GVIC”) to be consummated by August 7, 2023. Jeffrey Geygan, the Company’s Chairman of the Board and current Interim CEO of the Company, is the chief executive officer and a principal of GVIC. Other than as waived by the Limited Waiver, the Settlement Agreement remains in full force and effect and the rights and obligations under the Settlement Agreement of each of the parties remain unchanged. 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. The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include outstanding common shares issuable if their effect would be anti-dilutive. During the year ended February 29, 2024, 960,677 shares of common stock that were issuable upon exercise of warrants, 160,958 shares of common stock that were issuable upon the vesting of restricted stock units, and 17,698 shares of common stock that were issuable upon the exercise of options were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. During the year ended February 28, 2023, 960,677 shares of common stock that were issuable upon exercise of warrants, 137,294 shares of common stock that were issuable upon the vesting of restricted stock units, and 36,144 shares of common stock that were issuable upon the exercise of options were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. During the year ended February 28, 2022, 960,677 shares of common stock reserved for issuance upon the exercise of warrants and 147,422 shares of common stock that were issuable upon the vesting of restricted stock units were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Advertising and Promotional Expenses The Company expenses advertising costs as incurred. Total advertising expenses amounted to $ 701,214 , $ 577,984 , and $ 210,103 for the fiscal years ended February 29 or 28, 2024, 2023 and 2022, respectively. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, trade and notes receivables, accounts payables, and its line of credit. The fair value of all instruments approximates the carrying value, because of the relatively short maturity of these instruments. All of the Company’s financial instruments are classified as level 1 and level 2 assets within the fair value hierarchy. The Company does not have any financial instruments classified as level 3 assets. Recently Adopted Accounting Pronouncements Except for the recent accounting pronouncements described below, other recent accounting pronouncements are not expected to have a material impact on the Company's consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments and affect the carrying value of accounts receivable. The Company adopted ASU 2016-13 effective March 1, 2023 . The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. The disclosures required under ASU 2023-07 are also required for public entities with a single reportable segment. The updates in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The updates in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. Subsequent Events Management evaluated all activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition or disclosure in the financial statements. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Feb. 29, 2024 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION For the three years ended February 29 or 28: Cash paid (received) for: 2024 2023 2022 Interest $ 25,127 $ 25,000 $ 5,202 Income taxes ( 298,895 ) ( 547,763 ) 240,890 Supplemental disclosure of non-cash investing activities: Sale of assets in exchange for note receivable $ 1,000,000 $ - $ - |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 12 Months Ended |
Feb. 29, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS The Company recognizes revenue from contracts with its customers in accordance with Accounting Standards Codification® (“ASC”) 606, which provides that revenues are recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration expected to be received for those goods or services. The Company generally receives a fee associated with the franchise agreement or license agreement (collectively “Customer Contracts”) at the time that the Customer Contract is entered. These Customer Contracts have a term of up to 20 years, however the majority of Customer Contracts have a term of 10 years. During the term of the Customer Contract, the Company is obligated to many performance obligations that the Company has not determined are distinct. The resulting treatment of revenue from Customer Contracts is that the revenue is recognized proportionately over the life of the Customer Contract. Initial Franchise Fees, License Fees, Transfer Fees and Renewal Fees The initial franchise services are not distinct from the continuing rights or services offered during the term of the franchise agreement, and are treated as a single performance obligation. Initial franchise fees are being recognized as the Company satisfies the performance obligation over the term of the franchise agreement, which is generally 10 years. The following table summarizes contract liabilities as of February 29, 2024 and February 28, 2023: Twelve Months Ended February 29 or 28: 2024 2023 Contract liabilities at the beginning of the year: $ 943,415 $ 962,572 Revenue recognized ( 167,767 ) ( 204,657 ) Contract fees received 53,000 185,500 Contract liabilities at the end of the year: $ 828,648 $ 943,415 A t February 29, 2024, annual revenue expected to be recognized in the future, related to performance obligations that are not yet fully satisfied, are estimated to be the following: 2025 $ 150,494 2026 135,223 2027 112,137 2028 103,775 2029 66,653 Thereafter 260,366 Total $ 828,648 Gift Cards The Company’s franchisees sell gift cards, which do not have expiration dates or non-usage fees. The proceeds from the sale of gift cards by the franchisees are accumulated by the Company and paid out to the franchisees upon customer redemption. ASC 606 requires the use of the “proportionate” method for recognizing breakage. The Company recognizes breakage from gift cards when the gift card is redeemed by the customer or the Company determines the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The determination of the gift card breakage rate is based upon Company-specific historical redemption patterns. The Company recognized breakage of $ 40,218 and $ 59,754 during FY 2024 and FY 2023, respectively Durango Product Sales of Confectionary Items, Retail Sales and Royalty and Marketing Fees Confectionary items sold to the Company’s franchisees, others and its Company-owned stores’ sales are recognized at the time of the underlying sale, based on the terms of the sale and when ownership of the inventory is transferred, and are presented net of sales taxes and discounts. Royalties and marketing fees from franchised or licensed locations, which are based on a percent of sales are recognized at the time the sales occur. |
Disaggregation of Revenue
Disaggregation of Revenue | 12 Months Ended |
Feb. 29, 2024 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue | NOTE 4 – DISAGGREGATION OF REVENUE The following table presents disaggregated revenue by the method of recognition and segment: For the Year Ended February 29, 2024 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 167,767 - $ - $ 167,767 Revenues recognized at a point in time: Durango Product sales $ - $ 20,703,409 $ - $ 20,703,409 Retail sales - - 1,318,901 1,318,901 Royalty and marketing fees 5,760,610 - - 5,760,610 Total revenues recognized over time and point in time $ 5,928,377 $ 20,703,409 $ 1,318,901 $ 27,950,687 For the Year Ended February 28, 2023 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 204,657 $ - $ - $ 204,657 Revenues recognized at a point in time: Durango Product sales $ - $ 23,372,133 $ - $ 23,372,133 Retail sales - - 1,084,777 1,084,777 Royalty and marketing fees 5,770,785 - - 5,770,785 Total revenues recognized over time and point in time $ 5,975,442 $ 23,372,133 $ 1,084,777 $ 30,432,352 For the Year Ended February 28, 2022 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 179,678 $ - $ - $ 179,678 Revenues recognized at a point in time: Durango Product sales $ - $ 22,374,175 $ - $ 22,374,175 Retail sales - - 1,160,295 1,160,295 Royalty and marketing fees 5,774,400 - - 5,774,400 Total revenues recognized over time and point in time $ 5,954,078 $ 22,374,175 $ 1,160,295 $ 29,488,548 |
Inventories
Inventories | 12 Months Ended |
Feb. 29, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5 - INVENTORIES Inventories consist of the following at February 29 or 28: 2024 2023 Ingredients and supplies $ 2,037,727 $ 2,481,510 Finished candy 2,509,460 1,567,887 Reserve for slow moving inventory ( 188,786 ) ( 409,617 ) Total inventories $ 4,358,401 $ 3,639,780 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Feb. 29, 2024 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and Equipment, Net | NOTE 6 – PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following at February 29 or 28: 2024 2023 Land $ 513,618 $ 513,618 Building 5,108,950 5,151,886 Machinery and equipment 12,508,888 10,152,211 Furniture and fixtures 590,679 512,172 Leasehold improvements 138,515 134,010 Transportation equipment 325,979 476,376 19,186,629 16,940,273 Less accumulated depreciation ( 11,428,974 ) ( 11,229,534 ) Property and equipment, net $ 7,757,655 $ 5,710,739 Depreciation expense related to property and equipment totaled $ 859,269 , $ 736,358 , and $ 710,804 , during the fiscal years ended February 29 or 28, 2024, 2023 and 2022, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Feb. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 7 – GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets consist of the following at February 29 or 28: 2024 2023 Amortization Period (in Years) Gross Accumulated Gross Accumulated Intangible assets subject to amortization Store design 10 $ 394,826 $ 277,344 $ 394,826 $ 259,314 Trademark/Non-competition agreements 5 - 20 259,339 138,924 259,339 128,924 Total 654,165 416,268 654,165 388,238 Goodwill and intangible assets not subject to Goodwill Retail $ 360,972 $ 360,972 Franchising 97,318 97,318 Manufacturing 97,318 97,318 Trademark 20,000 20,000 Total 575,608 575,608 Total Goodwill and Intangible Assets $ 1,229,773 $ 416,268 $ 1,229,773 $ 388,238 There was no c hange to goodwill during the fiscal year ended February 29, 2024. Changes to goodwill during the fiscal year ended February 28, 2023 consisted of the following: Retail Segment Balance as of February 28, 2022 $ 515,065 Impairment losses ( 84,183 ) Goodwill written off related to sales of Company-owned stores ( 69,910 ) Balance as of February 29, 2023 $ 360,972 Amortization expense related to intangible assets totaled $ 28,030 , $ 28,905 , and $ 29,371 during the fiscal years ended February 29 or 28, 2024, 2023 and 2022, respectively. At February 29, 2024, annual amortization of intangible assets, based upon the Company’s existing intangible assets and current useful lives, is estimated to be the following: 2025 $ 27,405 2026 27,405 2027 27,405 2028 27,405 2029 27,405 Thereafter 100,872 Total $ 237,897 |
Notes payable and revolving cre
Notes payable and revolving credit line | 12 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Notes Payable and Revolving Credit Line | NOTE 8 –NOTES PAYABLE AND REVOLVING CREDIT LINE Revolving Credit Line As of February 29, 2024, the Company had a $ 4.0 million credit line for general corporate and working capital purposes, of which $ 2.75 million was available for borrowing (subject to certain borrowing base limitations). The Company drew down $ 1.25 million on the credit line during the year ended February 29, 2024. Per the Credit Agreement, the maturity date is September 30, 2024, at which point the full amount outstanding is due. Th e credit line is secured by substantially all of the Company’s assets, except retail store assets. Interest on borrowings is at the Secured Overnight Financing Rate plus 2.37 % ( 7.69 % at February 29, 2024 and 6.92 % at February 28, 2023). Additionally, the line of credit is subject to various financial ratio and leverage covenants. As of February 29, 2024, the Company was not in compliance with the requirement under the Credit Agreement to maintain a ratio of total assets to total current liabilities of at least 1.5 to 1. The Company's current ratio as of February 29, 2024 was 1.19 to 1. The Company has received a waiver from the Lender as of the date of issuance of these financial statements. The Company in compliance, however, with all other aspects of the Credit Agreement. Refer to Note 1 for further information. |
Stock Compensation Plans
Stock Compensation Plans | 12 Months Ended |
Feb. 29, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation Plans | NOTE 9 - STOCK COMPENSATION PLANS In FY 2021, stockholders approved an amendment and restatement of the 2007 Equity Incentive Plan (as amended and restated, 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 29, 2024, total shares authorized under the 2007 Plan was 985,340 , and 183,974 shares were available for issuance. Information with respect to restricted stock unit awards outstanding under the 2007 Plan at February 29, 2024, and changes for the three years then ended was as follows: Twelve Months Ended February 29 or 28: 2024 2023 2022 Outstanding non-vested restricted stock units at beginning 154,131 105,978 209,450 Granted 157,145 129,092 26,058 Vested ( 48,890 ) ( 70,782 ) ( 127,130 ) Cancelled/forfeited ( 101,428 ) ( 10,157 ) ( 2,400 ) Outstanding non-vested restricted stock units as of 160,958 154,131 105,978 Weighted average grant date fair value $ 5.59 $ 5.23 $ 9.33 Weighted average remaining vesting period (in years) 1.94 1.73 2.26 The Company also issued 19,591 restricted stock units outside of the 2007 Plan, of which 7,393 had service vesting conditions and 12,198 had performance vesting conditions, further discussed below. The grant date fair value of the non plan awards was $ 4.86 per share. Information with respect to stock option awards outstanding under the 2007 Plan at February 29, 2024, and changes for the three years then ended was as follows: Twelve Months Ended February 29 or 28: 2024 2023 2022 Outstanding stock options at beginning of year: 36,144 - - Granted - 36,144 - Exercised - - - Cancelled/forfeited ( 18,446 ) - - Outstanding stock options as of February 29 or 28: 17,698 36,144 - Weighted average exercise price $ 6.49 $ 6.49 n/a Weighted average remaining contractual term (in years) 8.26 9.26 n/a During the year ended February 29, 2024, the Company issued a total of 157,145 restricted stock units, inclusive of the 2007 Plan and non plan awards, of which 95,151 restricted stock units are subject to vesting based on the achievement of company performance goals and 61,994 restricted stock units that vest over time. These issuances were made to certain of the Company's executives. These restricted stock units were issued with an aggregate grant date fair value of $ 877,838 or $ 5.59 per share. The performance-based restricted stock units will vest following the end of the Company’s fiscal year ending February 2026 with respect to the target number of performance-based restricted stock units if the Company achieves metrics related to return on equity, Specialty Market gross margin, average unit volume, and social media engagement lifetime value during the performance period, subject to continued service through the end of the performance period. The performance-based restricted stock units may vest from 75 % to 110 % of target units based upon actual performance. The time-based restricted stock units vest 33 % annually on the anniversary date of the award until August 11, 2026. During the year ended February 28, 2023, the Company issued 36,144 stock options and issued 94,892 performance-based restricted stock units subject to vesting based on the achievement of performance goals. These issuances were made to certain of the Company's executives. The stock options were issued with an aggregate grant date fair value of $ 77,267 or $ 2.14 per share. The performance-based restricted stock units were issued with an aggregate grant date fair value of $ 298,582 or $ 6.29 per share, based upon a target issuance of 47,446 shares of common stock. The stock options granted vest with respect to one - third of the shares on the last day of the Company’s current fiscal year ending February 29, 2024, and vest as to remaining shares in equal quarterly increments on the last day of each quarter until the final vesting on February 28, 2025. The performance-based restricted stock units will vest following the end of the Company’s fiscal year ending February 2025 with respect to the target number of performance-based restricted stock units if the Company achieves an annualized total shareholder return of 12.5 % during the performance period, subject to continued service through the end of the performance period. The Compensation Committee of the Board of Directors has discretion to determine the number of performance-based restricted stock units between 0 - 200 % of the target number that will vest based on achievement of performance below or above the target performance goal. The Company recognized $ 437,829 and $ 651,016 of stock-based compensation expense during the years ended February 29 and 28, 2024 and 2023, respectively. Compensation costs related to stock-based compensation are generally amortized over the vesting period of the stock awards. Refer to Note 16 for further discussion of the equity impact of the prior CEO termination. Except as noted above, restricted stock units generally vest in equal annual installments over a period of five to six years . During the year ended February 29 and 28, 2024 and 2023, restricted stock units vested and issued as 48,890 and 70,781 shares of common stock, respectively. Total unrecognized compensation expense of non-vested, non-forfeited restricted stock units and stock options granted as of February 29, 2024 was $ 408,275 , which is expected to be recognized over the weighted-average period of 1.9 years. Total unrecognized compensation expense of non-forfeited, performance vesting, restricted stock units as of February 28, 2023 was $ 628,966 , which is expected to be recognized over the weighted-average period of 1.7 yea rs. |
Leasing Arrangements
Leasing Arrangements | 12 Months Ended |
Feb. 29, 2024 | |
Leases [Abstract] | |
Leasing Arrangements | NOTE 10 – LEASING ARRANGEMENTS The Company conducts its retail operations in facilities leased under non-cancelable operating leases of up to ten years. Certain leases contain renewal options for between five and ten additional years at increased monthly rentals. Some of the leases provide for contingent rentals based on sales in excess of predetermined base levels. The Company acts as primary lessee of some franchised store premises, which the Company then subleases to franchisees, but the majority of existing franchised locations are leased by the franchisee directly. In some instances, the Company has leased space for its Company-owned locations that are now occupied by franchisees. 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 also leases trucking equipment and warehouse space in support of its production operations. Expense associated with trucking and warehouse leases is included in cost of sales on the consolidated statements of operations. The Company accounts for payments related to lease liabilities on a straight-line basis over the lease term. During the years ended February 29 or 28, 2024 and 2023, lease expense recognized in the consolidated statements of operations was $ 599,853 and $ 565,046 , respectively. The lease liability reflects the present value of the Company’s estimated future minimum lease payments over the life of its leases. This includes known escalations and renewal option periods reasonably assured of being exercised. Typically, renewal options are considered reasonably assured of being exercised if the sales performance of the location remains strong. Therefore, the right of use asset and lease liability include an assumption on renewal options that have not yet been exercised by the Company and are not currently a future obligation. The Company has separated non-lease components from lease components in the recognition of the Asset and Liability except in instances where such costs were not practical to separate. To the extent that occupancy costs, such as site maintenance, are included in the asset and liability, the impact is immaterial. For franchised locations, the related occupancy costs including property taxes, insurance and site maintenance are generally required to be paid by the franchisees as part of the franchise arrangement. In addition, the Company is the lessee under non-store related leases such as storage facilities and trucking equipment. For leases where the implicit rate is not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease. The weighted average discount rate used for operating leases was 3.9 % , 3.4 % , and 3.1 % as of February 29 or 28, 2024, 2023 and 2022, respectively. The total estimated future minimum lease payments is $ 1.9 million as of February 29, 2024. As of February 29, 2024, maturities of lease liabilities for the Company’s operating leases were as follows: FYE 25 $ 514,169 FYE 26 496,466 FYE 27 284,667 FYE 28 135,010 FYE 29 103,198 Thereafter 341,130 Total $ 1,874,640 Less: Imputed interest ( 180,169 ) Present value of lease liabilities: $ 1,694,471 The weighted average lease term at February 29 or 28, 2024, 2023, and 2022 was 5.8 years, 5.5 years and 6.7 years, respectively. The following is a schedule of cash paid for lease liabilities for the three years ended February 29 or 28: 2024 2023 2022 Cash paid for amounts included in the measurement of 543,543 572,079 563,264 During the years ended February 29 or 28, 2024, 2023, and 2022 the Company entered into new leases representing a future lease liability of $ 56,012 , $ 1,472,667 , and $ 588,475 , respectively. The Company did not have any leases categorized as finance leases as of February 29, 2024 or February 28, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES 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. As of February 29, 2024, the Company was contracted for approximately $ 270,000 of raw materials under such agreements. The Company has designated these contracts as normal under the normal purchase and sale exception under the accounting standards for derivatives. These contracts are not entered into for speculative purposes. Litigation From time to time, the Company is involved in litigation relating to claims arising out of its operations. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. At February 29, 2024, the Company was not a party to any legal proceedings that were expected, individually or in the aggregate, to have a material adverse effect on its business, financial condition or operating results. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Feb. 29, 2024 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 12 – STOCKHOLDERS’ EQUITY Redemption of Preferred Stock Purchase Rights On October 2, 2021, the Board of Directors approved the redemption of all the outstanding preferred stock purchase rights (the “Rights”) granted pursuant to the Rights Agreement, dated March 1, 2015, between the Company and Computershare Trust Company, N.A., as Rights Agent (as amended, the “Rights Agreement”), commonly referred to as a “poison pill.” Immediately upon the action of the Board of Directors to approve the redemption of the Rights, the right to exercise the Rights terminated, which effectively terminated the Rights Agreement. Pursuant to the Rights Agreement, the Rights were redeemed at a redemption price of $ 0.01 per Right. As a result, the Company paid an aggregate amount of $ 61,276 to stockholders in October 2021 to redeem the Rights. Warrants In connection with a terminated supplier agreement with a former customer of the Company, the Company issued a warrant (the “Warrant”) to purchase up to 960,677 shares of the Company’s common stock (the “Warrant Shares”) at an exercise price of $ 8.76 per share. The Warrant Shares were to vest in annual tranches in varying amounts following each contract year under the terminated supplier agreement, and was subject to, and only upon, achievement of certain revenue thresholds on an annual or cumulative five-year basis in connection with its performance under the terminated supplier agreement. The Warrant was to expire six months after the final and conclusive determination of revenue thresholds for the fifth contract year and the cumulative revenue determination in accordance with the terms of the Warrant. On November 1, 2022, the Company sent a formal notice to the customer terminating the agreement. As of February 29, 2024, no Warrant Shares had vested and, subsequent to the termination by the Company of supplier agreement, the Company has no remaining material obligations under the Warrant. The Company determined that the grant date fair value of the Warrant was de minimis and did not record any amount in consideration of the warrants. The Company utilized a Monte Carlo model for purposes of determining the grant date fair value. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 29, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 - INCOME TAXES Income tax expense (benefit) is comprised of the following for the years ended February 29 or 28: 2024 2023 2022 Current Federal $ - $ ( 116,792 ) $ 204,058 State - 8,472 46,704 Total Current - ( 108,320 ) 250,762 Deferred Federal - 621,841 ( 231,430 ) State - 100,322 ( 36,144 ) Total Deferred - 722,163 ( 267,574 ) Total $ - $ 613,843 $ ( 16,812 ) 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 29 or 28: 2024 2023 2022 Statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 0.0 % 2.9 % 3.8 % Work opportunity tax credits 0.0 % 0.0 % ( 1.2 )% Equity compensation tax expense 0.0 % ( 0.7 )% ( 8.2 )% Compensation and benefits permanent differences ( 0.2 )% ( 3.2 )% ( 1.9 )% Other 1.6 % 0.7 % 0.1 % Valuation allowance ( 22.4 )% ( 33.3 )% 0.0 % Impact of CARES act 0.0 % 0.0 % ( 10.3 )% Effective tax rate ( 0.0 )% ( 12.6 )% 3.3 % During FY 2024, the Company's effective tax rate was zero . This was primarily the result of losses reported in the year, no income taxes due, and full valuation allowance against deferred tax assets. During FY 2023 the Company’s effective tax rate resulted in recognition of income tax expense despite incurring a pretax loss. During FY 2023 income tax expense was primarily the result of expense associated with an increase in reserves for deferred tax assets. Management evaluated recent losses before income taxes and determined that it is no longer more likely than not that our deferred income taxes are fully realizable. Because of this determination, the Company reserved for approximately $ 1.6 million of deferred tax assets. As of February 28, 2023, the Company has a full valuation allowance against its deferred tax asset s. During FY 2022 the low effective income tax rate was primarily the result of permanent differences between the Company’s expenses as valued for financial reporting purposes versus for income tax purposes. These differences were primarily valuation of restricted stock units and the period of recognition for employee retention credits. During FY 2021 the Company’s effective tax rate resulted in recognition of an income tax benefit as a result of a pretax loss being recognized for the year. The components of deferred income taxes as of February 29 or 28 are as follows: 2024 2023 Deferred Tax Assets Allowance for doubtful accounts and notes $ 169,615 $ 182,031 Inventories 30,849 100,725 Accrued compensation 437,972 158,652 Loss provisions and deferred income 303,600 340,652 Self-insurance accrual 27,893 24,098 Interest & other 17,239 — Restructuring charges 99,069 98,693 Right of use liabilities 479,732 — Accumulated net losses 3,576,640 1,669,288 Valuation allowance ( 3,106,393 ) ( 1,721,306 ) Net deferred tax assets $ 2,036,216 $ 852,833 Deferred Tax Liabilities Depreciation and amortization ( 1,450,441 ) ( 771,593 ) Right of use assets ( 479,609 ) — Prepaid expenses ( 106,166 ) ( 81,240 ) Deferred Tax Liabilities ( 2,036,216 ) ( 852,833 ) Net deferred tax assets $ - $ - The following table summarizes deferred income tax valuation allowances as of February 29 or 28: 2024 2023 Valuation allowance at beginning of period $ 1,721,306 $ 98,693 Tax expense realized by valuation allowance 1,385,087 1,622,613 Valuation allowance at end of period $ 3,106,393 $ 1,721,306 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 2019. 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. A valuation allowance to reduce the carrying amount of deferred income tax assets is established when it is more likely than not that we will not realize some portion or all of the tax benefit of our deferred income tax assets. The Company evaluates, on a quarterly basis, whether it is more likely than not that our deferred income tax assets are realizable based upon recent past financial performance, tax reporting positions, and expectations of future taxable income. The determination of deferred tax assets is subject to estimates and assumptions. The Company periodically evaluates our deferred tax assets to determine if our assumptions and estimates should change . As of February 29, 2024 and February 28, 2023, the Company had a full valuation allowance against its deferred tax assets. 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 29 or 28, 2024 or 2023. 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 the years ended February 29 or 28, 2024 and 2023. The Company’s subsidiaries, SWRL, along with U-Swirl had a history of net operating losses prior to the company’s acquisition of them and thus the Company has a related net operating loss carry forward. In accordance with Section 382 of the Internal Revenue Code, deductibility of SWRL’s and U-Swirl’s Federal net operating loss carryovers may be subject to annual limitation in the event of a change in control. The Company has performed a preliminary evaluation as to whether a change in control has taken place, and has 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. The initial limitations will continue to limit deductibility of SWRL’s and U-Swirl’s net operating loss carryovers, but the annual loss limitation will be deductible to RMCF and U-Swirl International Inc. upon the filing of joint tax returns in FY 2017 and future years. The Company estimates that the potential future tax deductions of U-Swirl’s Federal net operating losses, limited by section 382, to be approximately $ 1,811,000 with a resulting deferred tax asset of approximately $ 445,000 . U-Swirl’s Federal net operating loss carryovers will expire at various dates beginning in 2026. Income tax provision (benefit) allocated to continuing operations and discontinued operations for the years ended February 29 or 28, 2024, 2023 and 2022 was as follows: 2024 2023 2022 Continuing operations $ - $ 613,843 $ ( 16,812 ) Discontinued operations - 618,308 52,194 Total tax provision (benefit) $ - $ 1,232,151 $ 35,382 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Feb. 29, 2024 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | NOTE 14 - 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 29 or 28, 2024, 2023 and 2022, the Company’s contribution was approximately $ 62,000 , $ 68,000 , and $ 67,000 , respectively, to the plan. |
Operating Segments
Operating Segments | 12 Months Ended |
Feb. 29, 2024 | |
Segment Reporting [Abstract] | |
Operating segments | NOTE 15 - OPERATING SEGMENTS The Company classifies its business interests into three reportable segments: Rocky Mountain Chocolate Factory, Inc. Franchising, Manufacturing, Retail Stores, and Unallocated, which is the basis upon which the Company’s chief operating decision maker, the chief executive officer, evaluates the Company’s performance. 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 2024 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,928,870 $ 21,832,674 $ 1,318,901 $ - $ 29,080,445 Intersegment revenues ( 493 ) ( 1,129,265 ) - - ( 1,129,758 ) Revenue from external customers 5,928,377 20,703,409 1,318,901 - 27,950,687 Segment profit (loss) 1,758,953 149,191 144,842 ( 6,928,703 ) ( 4,875,717 ) Total assets 1,255,165 11,989,238 510,189 6,822,626 20,577,218 Capital expenditures 134,635 2,297,046 41,801 543,991 3,017,473 Total depreciation & amortization $ 31,618 $ 755,502 $ 7,684 $ 92,495 $ 887,299 FY 2023 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,980,945 $ 24,628,317 $ 1,084,777 $ - $ 31,694,039 Intersegment revenues ( 5,503 ) ( 1,256,184 ) - - ( 1,261,687 ) Revenue from external customers 5,975,442 23,372,133 1,084,777 - 30,432,352 Segment profit (loss) 2,601,485 2,832,307 130,880 ( 10,439,185 ) ( 4,874,513 ) Total assets 1,245,331 9,792,491 442,977 10,506,028 21,986,827 Capital expenditures 17,129 899,219 5,413 78,254 1,000,015 Total depreciation & amortization $ 34,301 $ 652,405 $ 5,845 $ 72,712 $ 765,263 FY 2022 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,959,624 $ 23,442,371 $ 1,160,295 $ - $ 30,562,290 Intersegment revenues ( 5,546 ) ( 1,068,196 ) - - ( 1,073,742 ) Revenue from external customers 5,954,078 22,374,175 1,160,295 - 29,488,548 Segment profit (loss) 2,862,263 3,863,460 75,962 ( 7,318,214 ) ( 516,529 ) Total assets 1,160,343 10,023,716 625,850 15,070,852 26,880,761 Capital expenditures 1,832 797,178 3,688 138,629 941,327 Total depreciation & amortization $ 36,625 $ 627,071 $ 5,635 $ 70,844 $ 740,175 |
Contested Solicitation of Proxi
Contested Solicitation of Proxies and Employee Agreements | 12 Months Ended |
Feb. 29, 2024 | |
Contested Solicitation Of Proxies And Change In Control Payments [Abstract] | |
Contested Solicitation of Proxies and Employee Agreements | NOTE 16 – CONTESTED SOLICITATION OF PROXIES AND EMPLOYEE AGREEMENTS Contested Solicitation of Proxies During FY 2023 and FY 2022, the Company incurred substantial costs associated with a contested solicitation of proxies in connection with its 2022 and 2021 annual meeting of stockholders. During FY 2023, the Company incurred approximately $ 4.1 million of costs associated with the contested solicitation of proxies, compared with $ 1.7 million of costs incurred during FY 2022, compared with no material costs incurred during FY 2024. These costs are recognized as general and administrative expense in the Consolidated Statement of Operations. Employment Agreement Payments The Company incurred charges as discussed below in relation to certain of its executives. Robert J. Sarlls Separation Agreement Effective January 27, 2024, the Company terminated the services of its CEO and entered into a separation agreement which specified that, due to the involuntary termination, certain cash payments would be made. These severance payments and the Company’s share of associated payroll taxes in the amount of approximately $ 660,000 will occur over a 15-month period. The Company accrued a total of approximately $ 692,000 for all cash payments to be made to the CEO pursuant to the separation agreement. In addition, all unvested RSU awards and stock options were cancelled upon effectiveness of the separation agreement. Stock options in the amount of 11,528 were cancelled as the employee had not met the service vesting condition as of the date of the separation agreement. Vested stock options in the amount of 16,140 could be exercised during the post termination exercise period as specified in the original option agreement. These shares had not yet been exercised as of February 29, 2024. Service-based RSU awards in the amount of 27,130 shares were cancelled pursuant to the separation agreement as the employee had not met the required service conditions as of the date of the separation agreement. Performance-based awards for 46,630 shares were also cancelled as the required performance and service conditions had not been met as of the date of termination. Because the required performance conditions had not yet been met and the requisite service had not been provided by the employee, the Company reversed all previously recorded stock-based compensation in the amount of $ 69,000 in accordance with ASC 718. Gregory L. Pope, Sr. Retirement Agreement On May 8, 2023, the Company announced that Gregory L. Pope, Sr., Senior Vice President – Franchise Development, retired effective as of May 3, 2023 (the “Retirement Date”). In connection with his retirement, the Company and Mr. Pope entered into a retirement agreement and general release (the “Retirement Agreement”) that provides (i) Mr. Pope will provide consulting services to the Company, as an independent contractor, until December 31, 2023, for a monthly consulting fee of $ 22,000 , (ii) a retirement bonus of 26 equal bi-weekly payments of $ 12,500 (less tax withholding) payable beginning November 2023, (iii) for accelerated vesting of 8,332 non-vested restricted stock units as of the Retirement Date, (iv) payment of the cost of Mr. Pope’s COBRA premiums for up to 18 months, and (v) reimbursement of Mr. Pope’s legal fees incurred in connection with the Retirement Agreement (not to exceed $ 7,500 ). In addition, the Retirement Agreement includes covenants related to cooperation, non solicitation, and employment, as well as customary release of claims and non-disparagement provisions in favor of the Company, and a non-disparagement provision in favor of Mr. Pope. In connection with Mr. Dudley’s retirement in FY 2023, Mr. Dudley and the Company entered into a Separation Agreement and General Release (the “Separation Agreement”), dated September 30, 2022 (the “Effective Date”). Under the Separation Agreement, Mr. Dudley retired from the Company on the Effective Date and will be entitled, subject to the terms and conditions therein, to the following payments and separation benefits: (i) a cash separation payment amount in accordance with Mr. Dudley’s employment agreement; (ii) acceleration of vesting of Mr. Dudley’s 12,499 unvested restricted stock units as of the Effective Date; (iii) an additional cash severance payment of $ 70,000 ; and (iv) Mr. Dudley has agreed to provide consulting services to the Company through December 31, 2022, to the extent requested by the Company, for which he will receive a cash payment of $ 56,250 . In addition, the Separation Agreement includes covenants related to cooperation, solicitation, and employment, as well as the customary release of claims and non-disparagement provisions in favor of the Company. During FY 2022 Bryan J. Merryman agreed to voluntarily step down as President and Chief Executive Officer (“CEO”) of the Company upon the hiring of a new President and CEO for the Company. On May 5, 2022 the Company concluded its search for a new CEO with the announcement that Robert Sarlls will succeed Mr. Merryman as the Company’s CEO beginning on May 9, 2022. In connection therewith, the Company and Mr. Merryman entered into a letter agreement dated November 8, 2021 (the “Letter Agreement”), effective November 3, 2021 (the “Effective Date”), amending that certain Second Restated Employment Agreement, dated as of February 26, 2019, by and between the Company and Mr. Merryman (the “Current Employment agreement”). Pursuant to the Letter Agreement, among other things, Mr. Merryman agreed to (i) continue as Chief Financial Officer of the Company, and (ii) until the Company hires a new President and CEO, as the interim President and CEO of the Company. Except as specifically set forth in the Letter Agreement, all the terms and provisions of the Current Employment Agreement remain unmodified and in full force and effect. In addition, on November 3, 2021, the Compensation Committee of the Board of Directors recommended, and the Board of Directors unanimously approved, the acceleration of vesting of approximately 66,667 unvested restricted stock units previously granted to Mr. Merryman, such that the restricted stock units are fully vested as of November 3, 2021 (the “RSU Acceleration”). On July 7, 2022 Mr. Merryman retired from the Company and all of the Company’s obligations under the Letter Agreement and the Current Employment Agreement were satisfied. As a result of the above agreements, the Company incurred the following costs during the fiscal years ended February 29 or 28, 2024, 2023 and 2022: 2024 2023 2022 Severance compensation: $ 692,295 $ 928,938 $ 1,344,813 Accelerated restricted stock unit compensation expense: 74,956 95,156 525,000 Reversal of previously recorded restricted stock unit compensation expense: ( 69,032 ) — — Consulting Services and Retirement Bonus: 501,000 56,250 - Total $ 1,199,219 $ 1,080,344 $ 1,869,813 These costs are recognized as general and administrative expense in the Consolidated Statement of Operations. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Feb. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 17 – DISCO NTINUED OPERATIONS On February 24, 2023 and May 1, 2023, the Company entered into agreements to sell: 1) all operating assets and inventory associated with the Company’s three U-Swirl Company-owned locations, and 2) all franchise rights and intangible assets associated with the franchise operations of U-Swirl, respectively. The May 1, 2023 sale was completed pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”), dated May 1, 2023, by and among the Company, as guarantor, U Swirl as seller, LLC (“Purchaser”), a related company of Fosters Freeze, Inc., a California corporation. Pursuant to the Asset Purchase Agreement, on the Closing Date, Purchaser paid to U-Swirl $ 2.75 million, consisting of approximately (i) $ 1.75 million in cash and (ii) $ 1.0 million evidenced by a three-year secured promissory note in the aggregate original principal amount of $ 1.0 million. As a result of these asset sales, the activities of the Company’s subsidiary, U-Swirl, which were previously recorded to the U-Swirl operating segment are reported as discontinued operations in the consolidated statement of operations, consolidated balance sheet and consolidated statement of cash flows for all periods presented. The majority of the assets and liabilities of U-Swirl met the accounting criteria to be classified as held for sale and were aggregated and reported on separate lines of the respective statements. On October 31, 2023, the Company filed a certificate of dissolution with the Secretary of State of the State of Nevada with respect to U-Swirl. As a result, U-Swirl is effectively fully dissolved and no longer in legal existence. The following table discloses the results of operations of the businesses reported as discontinued operations for the years ended February 29 or 28, 2024, 2023 and 2022, respectively: FOR THE YEARS ENDED FEBRUARY 29 or 28, 2024 2023 2022 Total Revenue $ 212,242 $ 3,128,368 $ 2,854,031 Cost of sales - 654,353 556,933 Operating Expenses 143,198 2,048,129 2,087,021 Gain on disposal of assets ( 634,790 ) - - Other expense, net - - ( 137 Earnings from discontinued operations before 703,834 425,886 210,214 Income tax provision - 618,308 52,194 Earnings (loss) from discontinued operations, net of tax $ 703,834 $ ( 192,422 ) $ 158,020 The following table reflects the summary of assets and liabilities held for sale for U-Swirl as of February 29 or 28, 2024 and 2023, respectively: AS OF FEBRUARY 29 or 28, 2024 2023 Accounts and notes receivable, net $ - $ 75,914 Inventory, net - 6,067 Other - 1,023 Current assets held for sale - 83,004 Property and equipment, net - - Franchise rights, net - 1,708,336 Intangible assets, net - 48,095 Deferred income taxes - - Other - 9,415 Long-term assets held for sale - 1,765,846 Total Assets Held for Sale - 1,848,850 Accounts payable - 125,802 Accrued compensation - 11,205 Accrued liabilities - 11,981 Contract liabilities - 29,951 Current liabilities held for sale - 178,939 Contract liabilities, less current portion - 184,142 Long term liabilities held for sale - 184,142 Total Liabilities Held for Sale $ - $ 363,081 The following table summarizes the gain recognized during the year ended February 29, 2024 related to the sale of assets on May 1, 2023, as described above: Cash proceeds from the sale of assets $ 1,757,738 Notes receivable 1,000,000 Total consideration received 2,757,738 Assets and liabilities transferred Franchise rights 1,703,325 Inventory 6,067 Liabilities ( 229,431 ) Net assets transferred 1,479,961 Costs associated with the sale of assets 642,987 Gain on disposal of assets $ 634,790 |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 29, 2024 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, its wholly-owned subsidiaries, Rocky Mountain Chocolate Factory, Inc. (a Colorado corporation), Aspen Leaf Yogurt, LLC (“ALY”), U-Swirl International, Inc. (dissolved in October 2023) (“U-Swirl”), and U-Swirl, Inc. (“SWRL”) (collectively, the “Company”, "we", “RMCF”). 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 (“Durango Products”). The Company also sells its candy in select locations outside of its system of retail stores. On February 24, 2023 the Company entered into an agreement to sell its three Company-owned U-Swirl locations. Separately, on May 1, 2023, subsequent to the 2023 fiscal year end, the Company entered into an agreement to sell its franchise rights and intangible assets related to U-Swirl and associated brands. As a result, the activities of the Company’s U-Swirl subsidiary that have historically been reported in the U-Swirl segment have been reported as discontinued operations. See Note 17 – Discontinued Operations in the Notes to Consolidated Financial Statements for additional information regarding the Company's discontinued operations, including net sales, operating earnings and total assets by segment. The Company’s financial statements reflect continuing operations only, unless otherwise noted. 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; sales at Company-owned stores of chocolates and other confectionery products including gourmet caramel apples; and marketing fees. The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any material derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required. The Company believes the fair values of cash equivalents, accounts and notes receivable, accounts payable and line of credit approximate their carrying amounts due to their short duration. The following table summarizes the number of stores operating under the Rocky Mountain Chocolate Factory brand at February 29, 2024: Stores Opened Closed Sold Stores Rocky Mountain Chocolate Factory Company-owned stores 1 1 - - 2 Franchise stores - Domestic stores 153 5 ( 9 ) - 149 International license stores 4 - ( 1 ) - 3 Cold Stone Creamery - co-branded 101 4 ( 1 ) - 104 U-Swirl - co-branded 10 1 - - 11 Total 269 269 |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In accordance with ASC 205-40, Going Concern, the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued. During the year ended February 29, 2024, the Company incurred a net loss of $ 4.2 million and used cash in operating activities of $ 2.4 million . Additionally, the Company was not in compliance with the requirement under a credit agreement, as amended (the “Credit Agreement”), with Wells Fargo Bank N.A. (the “Lender”) to maintain a ratio of total current assets to total current liabilities of at least 1.5 to 1. The Company's current ratio as of February 29, 2024 was 1.19 to 1. The Company requested and received a waiver from the Lender as of the date the financial statements were available to be issued. The Credit Agreement is set to expire on September 30, 2024. These factors raise substantial doubts about the Company’s ability to continue as a going concern within one year of the date that these consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to continue to implement its business plan. The Company is exploring various means of strengthening its liquidity position and ensuring compliance with its debt financing covenants, which may include the obtaining of waivers from the Lender and/or, amending its Credit Line facility. The Company is also exploring supplemental debt facilities for other operational activities. During the next twelve months the Company intends to sell an unused parcel of land near its headquarters, cut overhead for manufacturing, and increase profits and gross margins through increasing chocolate price sales to its franchising system and Specialty Market customers. In addition, the Company intends to benefit from busy season of holiday product sales and add a CFO to its management teams during the next twelve months. In the event the Company is unable to generate profits, positive cash flow, and implement its business plan, it may have to curtail its business further and no longer continue as a going concern. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements, which include the accounts of the Company and its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany balances and transactions have been eliminated in consolidation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the estimate of the reserve for uncollectible accounts, revenue recognition, reserve for inventory obsolescence, and inputs for assessing goodwill impairment. The Company bases its estimates on historical experience and also on assumptions that the Company believes are reasonable. The Company assesses these estimates on a regular basis; however, actual results could materially differ from these estimates. 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, and 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. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. 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. |
Accounts and Notes Receivable | Accounts and Notes Receivable Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Notes receivable generally reflect the sale of assets. Accounts and notes receivable are stated at the net amount expected to be collected, using an estimate of current expected credit losses to determine the allowance for expected credit losses. The Company evaluates the collectability of its accounts and notes receivable and determines the appropriate allowance for expected credit losses based on a combination of factors, including the aging of the receivables and historical collection trends. When the Company is aware of a customer’s inability to meet its financial obligation, the Company may individually evaluate the related receivable to determine the allowance for expected credit losses. The Company uses specific criteria to determine uncollectible receivables to be written off, including bankruptcy filings, the referral of customer accounts to outside parties for collection, and the length that accounts remain past due. As of February 29, 2024, the Company had $ 2,183,685 of accounts receivable outstanding, inclusive of an allowance for credit losses of $ 331,902 . As of February 29, 2023, the Company had $ 2,055,694 of accounts receivable outstanding, inclusive of an allowance for credit losses of $ 666,315 . On February 29, 2024, the Company had total notes receivable of $ 1,184,677 , of which $ 1,000,000 relates to the U-Swirl note. The U-Swirl note is a three-year secured promissory note in the aggregate original principal amount of $ 1,000,000 . Payment is due May 1, 2026. The remaining balance of notes receivable includes $ 214,563 of notes receivable outstanding and an allowance for credit losses of $ 29,886 associated with these notes, compared to $ 191,725 of notes receivable outstanding and an allowance for credit losses of $ 73,951 on February 28, 2023. The notes require monthly payments and bear interest rates ranging from 4.5 % to 7.0 %. The notes mature through December 2027 and all of the notes receivable are secured by the assets of the location. The Company may experience the failure of its wholesale customers, including its franchisees, to whom it extends credit to pay amounts owed to the Company on time, or at all. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, which is adjusted for obsolete, damaged and excess inventories to the lower of cost or net realizable value based on actual differences. The inventory value is determined through analysis of items held in inventory, and, if the recorded value is higher than the net realizable value, the Company records an expense to reduce inventory to its actual net realizable 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, net realizable 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 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 ranges 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. |
Income Taxes | Income Taxes The Company provides for income taxes pursuant to the asset and liability method. The asset and liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax basis 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. The Company has recorded a deferred tax asset related to historical U-Swirl losses and has determined that these losses are restricted due to a limitation on the deductibility of future losses in accordance with Section 382 of the Internal Revenue Code as a result of the foreclosure transaction. The Company's temporary differences are listed in Note 13. |
Gift Card Breakage | Gift Card Breakage The Company and its franchisees sell gift cards that are redeemable for product in 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 current liabilities in our balance sheets. There are no expiration dates on the Company’s gift cards, and the Company does not charge any service fees. While the Company’s franchisees continue to honor all gift cards presented for payment, the Company may determine the likelihood of redemption to be remote for certain cards due to long periods of inactivity. The Company recognizes breakage from gift cards when the gift card is redeemed by the customer or the Company determines the likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). The determination of the gift card breakage rate is based upon Company-specific historical redemption patterns. Accrued gift card liability was $ 624,335 and $ 592,932 at February 29, 2024 and February 28, 2023, respectively. The Company recognized breakage of $ 40,218 and $ 59,754 during FY 2024 and FY 2023, respectively. |
Goodwill | Goodwill Goodwill arose primarily from two transaction types. The first 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. The second type was 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, generally the first day of its fourth quarter, or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. The recoverability of goodwill is evaluated through a comparison of the fair value of each of the Company’s 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’s goodwill is further described in Note 7 to the financial statements. During FY 2023, the Company recorded $ 84,183 of impairment of goodwill associated with its retail segment, and included within general and administrative expense on the Consolidated Statements of Operations. There were no similar impairment charges during FY 2024 or FY 2022. |
Intangible Assets | Intangible Assets Intangible assets represent non-physical assets that create future economic value and are primarily composed of packaging design, store design, trademarks and non-competition agreements. Intangible assets are amortized on a straight line basis over periods ranging from 5 years to 20 years based on the expected future economic value of the intangible asset. Intangible assets are recorded at their cost. The Company performs intangible asset impairment testing 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. The Company’s intangible assets are further described in Note 7 to the financial statements. |
Insurance and Self-Insurance Reserves | 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. |
Revenue | Sales The Company has performance obligations to sell products to franchisees and other customers, and revenue is recognized at a point in time. Control is transferred when the order has been shipped to a customer, utilizing a third party, or at the time of delivery when shipped on the Company’s trucks. Revenue is measured based on the amount of consideration that is expected to be received by the Company for providing goods or services under a contract with a customer. 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 the Company’s 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 The Company recognizes franchise fees over the term of the associated franchise agreeme nt, which is generally a period of 10 years. 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. The Company recognizes no royalty on franchised stores’ retail sales of products purchased from the Company’s manufacturing facility and recognizes a ten percent ( 10 %) royalty on all other sales of product made in store and sold at franchise locations. |
Stock-Based Compensation | Stock-Based Compensation In FY 2021, stockholders approved an amendment and restatement of the 2007 Equity Incentive Plan (as amended and restated, 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. Stock-based compensation expense related to stock awards is measured based on the fair value of the awards granted and recognized as an expense over the requisite service period. The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, generally five to six years. The Company accounts for forfeitures as they occur. |
Related Party Transactions | Related Party Transactions On December 14, 2022 the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”), by and among the Company, Bradley L. Radoff, an individual (“Radoff”), Andrew T. Berger, an individual, AB Value Partners, LP (“AB Value Partners”), AB Value Management LLC (“AB Value Management” and, together with AB Value Partners, “AB Value” and, together with Radoff, “ABV-Radoff”), and Mary Bradley, an individual, pertaining to, among other things, the dismissal of all pending lawsuits between the parties. Pursuant to the Settlement Agreement, the Company and ABV-Radoff agreed to a “Standstill Period” commencing on the effective date of the agreement and ending on the date that is forty-five (45) days prior to the beginning of the Company’s advance notice period for the nomination of directors at the Company’s 2025 annual meeting of stockholders. During the Standstill Period, ABV-Radoff agreed, subject to certain exceptions, other than in Rule 144 open market broker sale transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, not to sell, offer, or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities of the Company held by ABV-Radoff to any person or entity other than the Company or an affiliate of ABV-Radoff (a “Third Party”) that, to the ABV-Radoff’s knowledge would result in such Third Party, together with its Affiliates and Associates (as such terms are defined in the Settlement Agreement), owning, controlling, or otherwise having beneficial ownership or other ownership interest in the aggregate of more than 4.9 % of the Company’s common stock outstanding at such time, or would increase the beneficial ownership or other ownership interest of any Third Party who, together with its Affiliates and Associates, has a beneficial ownership or other ownership interest in the aggregate of more than 4.9% of the shares Common Stock outstanding at such time (such restrictions collectively, the “Lock-Up Restriction”). On August 3, 2023, the Board of Directors of the Company authorized and approved the issuance of a limited waiver (the “Limited Waiver”) of the Lock-Up Restriction with regard to a sale by ABV-Radoff of up to 200,000 shares of Common Stock to Global Value Investment Corp. (“GVIC”) to be consummated by August 7, 2023. Jeffrey Geygan, the Company’s Chairman of the Board and current Interim CEO of the Company, is the chief executive officer and a principal of GVIC. Other than as waived by the Limited Waiver, the Settlement Agreement remains in full force and effect and the rights and obligations under the Settlement Agreement of each of the parties remain unchanged. |
Earnings Per Share | 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. The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include outstanding common shares issuable if their effect would be anti-dilutive. During the year ended February 29, 2024, 960,677 shares of common stock that were issuable upon exercise of warrants, 160,958 shares of common stock that were issuable upon the vesting of restricted stock units, and 17,698 shares of common stock that were issuable upon the exercise of options were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. During the year ended February 28, 2023, 960,677 shares of common stock that were issuable upon exercise of warrants, 137,294 shares of common stock that were issuable upon the vesting of restricted stock units, and 36,144 shares of common stock that were issuable upon the exercise of options were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. During the year ended February 28, 2022, 960,677 shares of common stock reserved for issuance upon the exercise of warrants and 147,422 shares of common stock that were issuable upon the vesting of restricted stock units were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. |
Advertising and Promotional Expenses | Advertising and Promotional Expenses The Company expenses advertising costs as incurred. Total advertising expenses amounted to $ 701,214 , $ 577,984 , and $ 210,103 for the fiscal years ended February 29 or 28, 2024, 2023 and 2022, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, trade and notes receivables, accounts payables, and its line of credit. The fair value of all instruments approximates the carrying value, because of the relatively short maturity of these instruments. All of the Company’s financial instruments are classified as level 1 and level 2 assets within the fair value hierarchy. The Company does not have any financial instruments classified as level 3 assets. |
Recently Adopted Accounting Pronouncements and New Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Except for the recent accounting pronouncements described below, other recent accounting pronouncements are not expected to have a material impact on the Company's consolidated financial statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments and affect the carrying value of accounts receivable. The Company adopted ASU 2016-13 effective March 1, 2023 . The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. The disclosures required under ASU 2023-07 are also required for public entities with a single reportable segment. The updates in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The updates in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. |
Subsequent Events | Subsequent Events Management evaluated all activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition or disclosure in the financial statements. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Number of Stores | The following table summarizes the number of stores operating under the Rocky Mountain Chocolate Factory brand at February 29, 2024: Stores Opened Closed Sold Stores Rocky Mountain Chocolate Factory Company-owned stores 1 1 - - 2 Franchise stores - Domestic stores 153 5 ( 9 ) - 149 International license stores 4 - ( 1 ) - 3 Cold Stone Creamery - co-branded 101 4 ( 1 ) - 104 U-Swirl - co-branded 10 1 - - 11 Total 269 269 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of Supplemental Cash Flow Information | For the three years ended February 29 or 28: Cash paid (received) for: 2024 2023 2022 Interest $ 25,127 $ 25,000 $ 5,202 Income taxes ( 298,895 ) ( 547,763 ) 240,890 Supplemental disclosure of non-cash investing activities: Sale of assets in exchange for note receivable $ 1,000,000 $ - $ - |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
us-gaap_TableTextBlock | |
Summary of Contract Liabilities | The following table summarizes contract liabilities as of February 29, 2024 and February 28, 2023: Twelve Months Ended February 29 or 28: 2024 2023 Contract liabilities at the beginning of the year: $ 943,415 $ 962,572 Revenue recognized ( 167,767 ) ( 204,657 ) Contract fees received 53,000 185,500 Contract liabilities at the end of the year: $ 828,648 $ 943,415 |
Schedule of Revenue Expected to Be Recognized in the Future, Related to Performance Obligations | A t February 29, 2024, annual revenue expected to be recognized in the future, related to performance obligations that are not yet fully satisfied, are estimated to be the following: 2025 $ 150,494 2026 135,223 2027 112,137 2028 103,775 2029 66,653 Thereafter 260,366 Total $ 828,648 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Disaggregation of Revenue [Abstract] | |
Summary of Disaggregated Revenue by the Method of Recognition and Segment | The following table presents disaggregated revenue by the method of recognition and segment: For the Year Ended February 29, 2024 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 167,767 - $ - $ 167,767 Revenues recognized at a point in time: Durango Product sales $ - $ 20,703,409 $ - $ 20,703,409 Retail sales - - 1,318,901 1,318,901 Royalty and marketing fees 5,760,610 - - 5,760,610 Total revenues recognized over time and point in time $ 5,928,377 $ 20,703,409 $ 1,318,901 $ 27,950,687 For the Year Ended February 28, 2023 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 204,657 $ - $ - $ 204,657 Revenues recognized at a point in time: Durango Product sales $ - $ 23,372,133 $ - $ 23,372,133 Retail sales - - 1,084,777 1,084,777 Royalty and marketing fees 5,770,785 - - 5,770,785 Total revenues recognized over time and point in time $ 5,975,442 $ 23,372,133 $ 1,084,777 $ 30,432,352 For the Year Ended February 28, 2022 Revenues recognized over time: Franchising Manufacturing Retail Total Franchise fees $ 179,678 $ - $ - $ 179,678 Revenues recognized at a point in time: Durango Product sales $ - $ 22,374,175 $ - $ 22,374,175 Retail sales - - 1,160,295 1,160,295 Royalty and marketing fees 5,774,400 - - 5,774,400 Total revenues recognized over time and point in time $ 5,954,078 $ 22,374,175 $ 1,160,295 $ 29,488,548 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following at February 29 or 28: 2024 2023 Ingredients and supplies $ 2,037,727 $ 2,481,510 Finished candy 2,509,460 1,567,887 Reserve for slow moving inventory ( 188,786 ) ( 409,617 ) Total inventories $ 4,358,401 $ 3,639,780 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following at February 29 or 28: 2024 2023 Land $ 513,618 $ 513,618 Building 5,108,950 5,151,886 Machinery and equipment 12,508,888 10,152,211 Furniture and fixtures 590,679 512,172 Leasehold improvements 138,515 134,010 Transportation equipment 325,979 476,376 19,186,629 16,940,273 Less accumulated depreciation ( 11,428,974 ) ( 11,229,534 ) Property and equipment, net $ 7,757,655 $ 5,710,739 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill and intangible assets consist of the following at February 29 or 28: 2024 2023 Amortization Period (in Years) Gross Accumulated Gross Accumulated Intangible assets subject to amortization Store design 10 $ 394,826 $ 277,344 $ 394,826 $ 259,314 Trademark/Non-competition agreements 5 - 20 259,339 138,924 259,339 128,924 Total 654,165 416,268 654,165 388,238 Goodwill and intangible assets not subject to Goodwill Retail $ 360,972 $ 360,972 Franchising 97,318 97,318 Manufacturing 97,318 97,318 Trademark 20,000 20,000 Total 575,608 575,608 Total Goodwill and Intangible Assets $ 1,229,773 $ 416,268 $ 1,229,773 $ 388,238 |
Schedule of Changes to Goodwill | hange to goodwill during the fiscal year ended February 29, 2024. Changes to goodwill during the fiscal year ended February 28, 2023 consisted of the following: Retail Segment Balance as of February 28, 2022 $ 515,065 Impairment losses ( 84,183 ) Goodwill written off related to sales of Company-owned stores ( 69,910 ) Balance as of February 29, 2023 $ 360,972 |
Schedule of Annual Amortization of Intangible Assets | At February 29, 2024, annual amortization of intangible assets, based upon the Company’s existing intangible assets and current useful lives, is estimated to be the following: 2025 $ 27,405 2026 27,405 2027 27,405 2028 27,405 2029 27,405 Thereafter 100,872 Total $ 237,897 |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Unit Awards Outstanding under 2007 Plan | Information with respect to restricted stock unit awards outstanding under the 2007 Plan at February 29, 2024, and changes for the three years then ended was as follows: Twelve Months Ended February 29 or 28: 2024 2023 2022 Outstanding non-vested restricted stock units at beginning 154,131 105,978 209,450 Granted 157,145 129,092 26,058 Vested ( 48,890 ) ( 70,782 ) ( 127,130 ) Cancelled/forfeited ( 101,428 ) ( 10,157 ) ( 2,400 ) Outstanding non-vested restricted stock units as of 160,958 154,131 105,978 Weighted average grant date fair value $ 5.59 $ 5.23 $ 9.33 Weighted average remaining vesting period (in years) 1.94 1.73 2.26 |
Schedule of Stock Option Awards Outstanding under 2007 Plan | Information with respect to stock option awards outstanding under the 2007 Plan at February 29, 2024, and changes for the three years then ended was as follows: Twelve Months Ended February 29 or 28: 2024 2023 2022 Outstanding stock options at beginning of year: 36,144 - - Granted - 36,144 - Exercised - - - Cancelled/forfeited ( 18,446 ) - - Outstanding stock options as of February 29 or 28: 17,698 36,144 - Weighted average exercise price $ 6.49 $ 6.49 n/a Weighted average remaining contractual term (in years) 8.26 9.26 n/a |
Leasing Arrangements (Tables)
Leasing Arrangements (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Leases [Abstract] | |
Schedule of Maturities of Lease Liabilities for Operating Leases | As of February 29, 2024, maturities of lease liabilities for the Company’s operating leases were as follows: FYE 25 $ 514,169 FYE 26 496,466 FYE 27 284,667 FYE 28 135,010 FYE 29 103,198 Thereafter 341,130 Total $ 1,874,640 Less: Imputed interest ( 180,169 ) Present value of lease liabilities: $ 1,694,471 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) is comprised of the following for the years ended February 29 or 28: 2024 2023 2022 Current Federal $ - $ ( 116,792 ) $ 204,058 State - 8,472 46,704 Total Current - ( 108,320 ) 250,762 Deferred Federal - 621,841 ( 231,430 ) State - 100,322 ( 36,144 ) Total Deferred - 722,163 ( 267,574 ) Total $ - $ 613,843 $ ( 16,812 ) 2024 2023 2022 Continuing operations $ - $ 613,843 $ ( 16,812 ) Discontinued operations - 618,308 52,194 Total tax provision (benefit) $ - $ 1,232,151 $ 35,382 |
Reconciliation of the Statutory Federal Income Tax Rate and the Effective Rate | 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 29 or 28: 2024 2023 2022 Statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 0.0 % 2.9 % 3.8 % Work opportunity tax credits 0.0 % 0.0 % ( 1.2 )% Equity compensation tax expense 0.0 % ( 0.7 )% ( 8.2 )% Compensation and benefits permanent differences ( 0.2 )% ( 3.2 )% ( 1.9 )% Other 1.6 % 0.7 % 0.1 % Valuation allowance ( 22.4 )% ( 33.3 )% 0.0 % Impact of CARES act 0.0 % 0.0 % ( 10.3 )% Effective tax rate ( 0.0 )% ( 12.6 )% 3.3 % |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred income taxes as of February 29 or 28 are as follows: 2024 2023 Deferred Tax Assets Allowance for doubtful accounts and notes $ 169,615 $ 182,031 Inventories 30,849 100,725 Accrued compensation 437,972 158,652 Loss provisions and deferred income 303,600 340,652 Self-insurance accrual 27,893 24,098 Interest & other 17,239 — Restructuring charges 99,069 98,693 Right of use liabilities 479,732 — Accumulated net losses 3,576,640 1,669,288 Valuation allowance ( 3,106,393 ) ( 1,721,306 ) Net deferred tax assets $ 2,036,216 $ 852,833 Deferred Tax Liabilities Depreciation and amortization ( 1,450,441 ) ( 771,593 ) Right of use assets ( 479,609 ) — Prepaid expenses ( 106,166 ) ( 81,240 ) Deferred Tax Liabilities ( 2,036,216 ) ( 852,833 ) Net deferred tax assets $ - $ - |
Schedule Of Deffered Income Tax Valuation Allowances | The following table summarizes deferred income tax valuation allowances as of February 29 or 28: 2024 2023 Valuation allowance at beginning of period $ 1,721,306 $ 98,693 Tax expense realized by valuation allowance 1,385,087 1,622,613 Valuation allowance at end of period $ 3,106,393 $ 1,721,306 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting Information | FY 2024 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,928,870 $ 21,832,674 $ 1,318,901 $ - $ 29,080,445 Intersegment revenues ( 493 ) ( 1,129,265 ) - - ( 1,129,758 ) Revenue from external customers 5,928,377 20,703,409 1,318,901 - 27,950,687 Segment profit (loss) 1,758,953 149,191 144,842 ( 6,928,703 ) ( 4,875,717 ) Total assets 1,255,165 11,989,238 510,189 6,822,626 20,577,218 Capital expenditures 134,635 2,297,046 41,801 543,991 3,017,473 Total depreciation & amortization $ 31,618 $ 755,502 $ 7,684 $ 92,495 $ 887,299 FY 2023 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,980,945 $ 24,628,317 $ 1,084,777 $ - $ 31,694,039 Intersegment revenues ( 5,503 ) ( 1,256,184 ) - - ( 1,261,687 ) Revenue from external customers 5,975,442 23,372,133 1,084,777 - 30,432,352 Segment profit (loss) 2,601,485 2,832,307 130,880 ( 10,439,185 ) ( 4,874,513 ) Total assets 1,245,331 9,792,491 442,977 10,506,028 21,986,827 Capital expenditures 17,129 899,219 5,413 78,254 1,000,015 Total depreciation & amortization $ 34,301 $ 652,405 $ 5,845 $ 72,712 $ 765,263 FY 2022 Franchising Manufacturing Retail Unallocated Total Total revenues $ 5,959,624 $ 23,442,371 $ 1,160,295 $ - $ 30,562,290 Intersegment revenues ( 5,546 ) ( 1,068,196 ) - - ( 1,073,742 ) Revenue from external customers 5,954,078 22,374,175 1,160,295 - 29,488,548 Segment profit (loss) 2,862,263 3,863,460 75,962 ( 7,318,214 ) ( 516,529 ) Total assets 1,160,343 10,023,716 625,850 15,070,852 26,880,761 Capital expenditures 1,832 797,178 3,688 138,629 941,327 Total depreciation & amortization $ 36,625 $ 627,071 $ 5,635 $ 70,844 $ 740,175 |
Contested Solicitation of Pro_2
Contested Solicitation of Proxies and Employee Agreements (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Contested Solicitation Of Proxies And Change In Control Payments [Abstract] | |
Summary of Agreements to Company Incurred | As a result of the above agreements, the Company incurred the following costs during the fiscal years ended February 29 or 28, 2024, 2023 and 2022: 2024 2023 2022 Severance compensation: $ 692,295 $ 928,938 $ 1,344,813 Accelerated restricted stock unit compensation expense: 74,956 95,156 525,000 Reversal of previously recorded restricted stock unit compensation expense: ( 69,032 ) — — Consulting Services and Retirement Bonus: 501,000 56,250 - Total $ 1,199,219 $ 1,080,344 $ 1,869,813 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Feb. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Operations of Businesses Reported as Discontinued Operations | The following table discloses the results of operations of the businesses reported as discontinued operations for the years ended February 29 or 28, 2024, 2023 and 2022, respectively: FOR THE YEARS ENDED FEBRUARY 29 or 28, 2024 2023 2022 Total Revenue $ 212,242 $ 3,128,368 $ 2,854,031 Cost of sales - 654,353 556,933 Operating Expenses 143,198 2,048,129 2,087,021 Gain on disposal of assets ( 634,790 ) - - Other expense, net - - ( 137 Earnings from discontinued operations before 703,834 425,886 210,214 Income tax provision - 618,308 52,194 Earnings (loss) from discontinued operations, net of tax $ 703,834 $ ( 192,422 ) $ 158,020 The following table reflects the summary of assets and liabilities held for sale for U-Swirl as of February 29 or 28, 2024 and 2023, respectively: AS OF FEBRUARY 29 or 28, 2024 2023 Accounts and notes receivable, net $ - $ 75,914 Inventory, net - 6,067 Other - 1,023 Current assets held for sale - 83,004 Property and equipment, net - - Franchise rights, net - 1,708,336 Intangible assets, net - 48,095 Deferred income taxes - - Other - 9,415 Long-term assets held for sale - 1,765,846 Total Assets Held for Sale - 1,848,850 Accounts payable - 125,802 Accrued compensation - 11,205 Accrued liabilities - 11,981 Contract liabilities - 29,951 Current liabilities held for sale - 178,939 Contract liabilities, less current portion - 184,142 Long term liabilities held for sale - 184,142 Total Liabilities Held for Sale $ - $ 363,081 The following table summarizes the gain recognized during the year ended February 29, 2024 related to the sale of assets on May 1, 2023, as described above: Cash proceeds from the sale of assets $ 1,757,738 Notes receivable 1,000,000 Total consideration received 2,757,738 Assets and liabilities transferred Franchise rights 1,703,325 Inventory 6,067 Liabilities ( 229,431 ) Net assets transferred 1,479,961 Costs associated with the sale of assets 642,987 Gain on disposal of assets $ 634,790 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Feb. 29, 2024 USD ($) shares | Feb. 28, 2023 USD ($) shares | Feb. 28, 2022 USD ($) shares | Dec. 14, 2022 | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Net Income (Loss) | $ (4,171,883) | $ (5,680,778) | $ (341,697) | |
Cash used in operating activities | (2,434,947) | (2,102,491) | 2,858,154 | |
Accounts receivable outstanding | 2,183,685 | 2,055,694 | ||
Accounts receivable, allowance for credit losses | 331,902 | 666,315 | ||
Total notes receivable | 1,184,677 | |||
Financing receivable, before allowance for credit loss | 214,563 | 191,725 | ||
Financing receivable, allowance for credit loss | 29,886 | 73,951 | ||
Gift card, liability, current | 624,335 | 592,932 | ||
Gift card liability, breakage | 40,218 | 59,754 | ||
Impairment of goodwill | $ 0 | 84,183 | 0 | |
Current ratio, credit agreement requirement | 1.5 | |||
Current ratio | 1.19 | |||
Accounting Standards Update 2016-13 [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Change in accounting principle, accounting standards update, adoption date | Mar. 01, 2023 | |||
Change in accounting principle, accounting standards update, adopted [true false] | true | |||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | |||
USwirl Inc [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Total notes receivable | $ 1,000,000 | |||
Notes receivable term | 3 years | |||
Rocky Mountain Chocolate Factory [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Advertising expense | $ 701,214 | $ 577,984 | $ 210,103 | |
Warrant [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 960,677 | 960,677 | 960,677 | |
Unvested Restricted Stock Units [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 160,958 | 137,294 | 147,422 | |
Stock Options [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 17,698 | 36,144 | ||
Global Value Investment Corp [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Sale of stock maximum shares | shares | 200,000 | |||
ABV Radoff [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Minimum percentage of common stock outstanding | 4.90% | |||
Minimum [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Financing receivable interest rate | 4.50% | |||
Property, plant and equipment, useful life (year) | 5 years | |||
Finite-lived intangible asset, useful life (year) | 5 years | |||
Franchise fee rate | 1% | |||
Minimum [Member] | Franchise Rights [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Finite-lived intangible asset, useful life (year) | 10 years | |||
Maximum [Member] | ||||
Nature of Operations and Summary of Significant Accounting Policies [Line items] | ||||
Financing receivable interest rate | 7% | |||
Property, plant and equipment, useful life (year) | 39 years | |||
Finite-lived intangible asset, useful life (year) | 20 years | |||
Franchise fee rate | 10% |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Number of Stores (Details) | Feb. 29, 2024 Segment |
Stores Opened at 2/28/2023 [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 269 |
Stores Opened at 2/29/2024 [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 269 |
Company Owned Stores [Member] | Stores Opened at 2/28/2023 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 1 |
Company Owned Stores [Member] | Open [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 1 |
Company Owned Stores [Member] | Closed [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
Company Owned Stores [Member] | Sold [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
Company Owned Stores [Member] | Stores Opened at 2/29/2024 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 2 |
Franchise Stores - Domestic Stores and Kiosks [Member] | Stores Opened at 2/28/2023 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 153 |
Franchise Stores - Domestic Stores and Kiosks [Member] | Open [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 5 |
Franchise Stores - Domestic Stores and Kiosks [Member] | Closed [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 9 |
Franchise Stores - Domestic Stores and Kiosks [Member] | Sold [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
Franchise Stores - Domestic Stores and Kiosks [Member] | Stores Opened at 2/29/2024 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 149 |
International License Stores [Member] | Stores Opened at 2/28/2023 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 4 |
International License Stores [Member] | Open [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
International License Stores [Member] | Closed [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 1 |
International License Stores [Member] | Sold [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
International License Stores [Member] | Stores Opened at 2/29/2024 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 3 |
Cold Stone Creamery - Co-Branded [Member] | Stores Opened at 2/28/2023 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 101 |
Cold Stone Creamery - Co-Branded [Member] | Open [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 4 |
Cold Stone Creamery - Co-Branded [Member] | Closed [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 1 |
Cold Stone Creamery - Co-Branded [Member] | Sold [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
Cold Stone Creamery - Co-Branded [Member] | Stores Opened at 2/29/2024 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 104 |
USwirl Inc [Member] | Stores Opened at 2/28/2023 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 10 |
USwirl Inc [Member] | Open [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 1 |
USwirl Inc [Member] | Closed [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
USwirl Inc [Member] | Sold [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 0 |
USwirl Inc [Member] | Stores Opened at 2/29/2024 [Member] | Rocky Mountain Chocolate Factory [Member] | |
Nature of Operations and Summary of Significant Accounting Policies [Line items] | |
Number of stores | 11 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Summary of Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |||
Interest | $ 25,127 | $ 25,000 | $ 5,202 |
Income taxes | (298,895) | (547,763) | 240,890 |
Supplemental disclosure of non-cash investing activities: | |||
Sale of assets in exchange for note receivable | $ 1,000,000 | $ 0 | $ 0 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Additional Information (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Revenue from Contract with Customer [Line Items] | ||
Customers contracts, term (year) | 10 years | |
Gift card liability, breakage | $ 40,218 | $ 59,754 |
Maximum [Member] | ||
Revenue from Contract with Customer [Line Items] | ||
Customers contracts, term (year) | 20 years | |
Minimum [Member] | ||
Revenue from Contract with Customer [Line Items] | ||
Franchise agreement, term (year) | 10 years |
Revenue From Contracts With C_4
Revenue From Contracts With Customers - Summary of Contract Liabilities (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities at the beginning of the year: | $ 943,415 | $ 962,572 |
Revenue recognized | (167,767) | (204,657) |
Contract fees received | 53,000 | 185,500 |
Contract liabilities at the end of the year: | $ 828,648 | $ 943,415 |
Revenue From Contracts With C_5
Revenue From Contracts With Customers - Schedule of Revenue Expected to Be Recognized in the Future, Related to Performance Obligations (Details) | Feb. 29, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 828,648 |
Revenue From Contracts With C_6
Revenue From Contracts With Customers - Schedule of Revenue Expected to Be Recognized in the Future, Related to Performance Obligations 1 (Details) | Feb. 29, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 828,648 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 150,494 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 135,223 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 112,137 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 103,775 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 66,653 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2030-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period (Year) | 1 year |
Revenue, remaining performance obligation, amount | $ 260,366 |
Disaggregation of Revenue - Sum
Disaggregation of Revenue - Summary of Disaggregated Revenue by the Method of Recognition and Segment (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 27,950,687 | $ 30,432,352 | $ 29,488,548 |
Retail [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,318,901 | 1,084,777 | 1,160,295 |
Franchise Fees [Member] | Transferred over Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 167,767 | 204,657 | 179,678 |
Durango Product Sales [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 20,703,409 | 23,372,133 | 22,374,175 |
Royalty and Marketing Fees [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 5,760,610 | 5,770,785 | 5,774,400 |
Franchising [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 5,928,377 | 5,975,442 | 5,954,078 |
Franchising [Member] | Retail [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Franchising [Member] | Franchise Fees [Member] | Transferred over Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 167,767 | 204,657 | 179,678 |
Franchising [Member] | Durango Product Sales [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Franchising [Member] | Royalty and Marketing Fees [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 5,760,610 | 5,770,785 | 5,774,400 |
Manufacturing [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 20,703,409 | 23,372,133 | 22,374,175 |
Manufacturing [Member] | Retail [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Manufacturing [Member] | Franchise Fees [Member] | Transferred over Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Manufacturing [Member] | Durango Product Sales [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 20,703,409 | 23,372,133 | 22,374,175 |
Manufacturing [Member] | Royalty and Marketing Fees [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Retail Segment [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,318,901 | 1,084,777 | 1,160,295 |
Retail Segment [Member] | Retail [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,318,901 | 1,084,777 | 1,160,295 |
Retail Segment [Member] | Franchise Fees [Member] | Transferred over Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Retail Segment [Member] | Durango Product Sales [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Retail Segment [Member] | Royalty and Marketing Fees [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 0 | $ 0 | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 |
Inventory Disclosure [Abstract] | ||
Ingredients and supplies | $ 2,037,727 | $ 2,481,510 |
Finished candy | 2,509,460 | 1,567,887 |
Reserve for slow moving inventory | (188,786) | (409,617) |
Total inventories | $ 4,358,401 | $ 3,639,780 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 19,186,629 | $ 16,940,273 |
Less accumulated depreciation | (11,428,974) | (11,229,534) |
Property and equipment, net | 7,757,655 | 5,710,739 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 513,618 | 513,618 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,108,950 | 5,151,886 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 12,508,888 | 10,152,211 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 590,679 | 512,172 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 138,515 | 134,010 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 325,979 | $ 476,376 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Property, Plant and Equipment, Net [Abstract] | |||
Depreciation | $ 859,269 | $ 736,358 | $ 710,804 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, gross carrying value | $ 654,165 | $ 654,165 |
Intangible assets subject to amortization, accumulated amortization | 416,268 | 388,238 |
Intangible assets not subject to amortization, gross carrying value | 575,608 | 575,608 |
Total Goodwill and Intangible Assets | 1,229,773 | 1,229,773 |
Total Goodwill and Intangible Assets | 416,268 | 388,238 |
Retail Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization, gross carrying value | 360,972 | 360,972 |
Franchising Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization, gross carrying value | 97,318 | 97,318 |
Manufacturing Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization, gross carrying value | 97,318 | 97,318 |
Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization, gross carrying value | $ 20,000 | 20,000 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 20 years | |
Store Design [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 10 years | |
Intangible assets subject to amortization, gross carrying value | $ 394,826 | 394,826 |
Intangible assets subject to amortization, accumulated amortization | 277,344 | 259,314 |
Trademark/Non-Competition Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, gross carrying value | 259,339 | 259,339 |
Intangible assets subject to amortization, accumulated amortization | $ 138,924 | $ 128,924 |
Trademark/Non-Competition Agreement [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Trademark/Non-Competition Agreement [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 20 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Changes to Goodwill (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Goodwill [Line Items] | |||
Goodwill | $ 575,608 | ||
Impairment losses | 0 | $ (84,183) | $ 0 |
Goodwill | 575,608 | 575,608 | |
Company Stores Goodwill [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 360,972 | 515,065 | |
Impairment losses | (84,183) | ||
Goodwill written off related to sales of Company-owned stores | (69,910) | ||
Goodwill | $ 360,972 | $ 515,065 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Annual Amortization of Intangible Assets (Details) | Feb. 29, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2025 | $ 27,405 |
2026 | 27,405 |
2027 | 27,405 |
2028 | 27,405 |
2029 | 27,405 |
Thereafter | 100,872 |
Total | $ 237,897 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 28,030 | $ 28,905 | $ 29,371 |
Notes Payable and Revolving C_2
Notes Payable and Revolving Credit Line - Additional Information (Details ) $ in Thousands | 12 Months Ended | |
Feb. 29, 2024 USD ($) | Feb. 28, 2023 | |
Current ratio, credit agreement requirement | 1.5 | |
Current ratio | 1.19 | |
Line of Credit [Member] | Wells Fargo Bank [Member] | ||
Long-term line of credit | $ 4,000 | |
Line of credit facility, remaining borrowing capacity | $ 2,750 | |
Line of Credit [Member] | Wells Fargo Bank [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||
Debt instrument, basis spread on variable rate | 2.37% | |
Debt instrument, interest rate, stated percentage | 7.69% | 6.92% |
Line of Credit [Member] | Credit Agreement [Member] | Wells Fargo Bank [Member] | ||
Long-term line of credit | $ 1,250 |
Stock Compensation Plans - Addi
Stock Compensation Plans - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross (in shares) | 0 | 36,144 | 0 |
Share-based payment arrangement, expense | $ 437,829 | $ 651,016 | |
2007 Equity Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 7,393 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 4.86 | ||
Shares authorized under plan | 985,340 | ||
Shares available for future issuance | 183,974 | ||
Executive [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 47,446 | ||
Share-based compensation arrangement by share-based payment award, options, grants in period, aggregate grant date fair value | $ 77,267 | ||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross (in shares) | 36,144 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 2.14 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 157,145 | 129,092 | 26,058 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 5.59 | $ 5.23 | $ 9.33 |
Exercised (in shares) | 48,890 | 70,782 | 127,130 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares) | $ 48,890 | $ 70,781 | |
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ 628,966 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year 8 months 12 days | ||
Restricted Stock Units (RSUs) [Member] | 2007 Equity Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 19,591 | ||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting period (Year) | 6 years | ||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting period (Year) | 5 years | ||
Restricted Stock Units (RSUs) [Member] | Executive [Member] | 2007 Plan and Non Plan Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 157,145 | ||
Share-based compensation arrangement by share-based payment award, options, grants in period, aggregate grant date fair value | $ 877,838 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 5.59 | ||
Restricted Stock Units (RSUs) [Member] | Vesting Based On Performance Goals [Member] | Executive [Member] | 2007 Plan and Non Plan Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 95,151 | ||
Restricted Stock Units (RSUs) [Member] | Vesting Annually [Member] | Executive [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Restricted stock unit award vests percentage | 33% | ||
Restricted Stock Units (RSUs) [Member] | Vest Over Time [Member] | Executive [Member] | 2007 Plan and Non Plan Awards [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 61,994 | ||
Performance Shares [Member] | 2007 Equity Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Issuance of shares | 12,198 | ||
Performance Shares [Member] | Executive [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Percentage of performance-based restricted stock units | 12.50% | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 6.29 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Aggregate Grant Date Fair Value | $ 298,582 | ||
Performance Shares [Member] | Executive [Member] | Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross (in shares) | 94,892 | ||
Percentage of performance-based restricted stock units | 200% | ||
Performance Shares [Member] | Executive [Member] | Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Percentage of performance-based restricted stock units | 0% | ||
Performance Shares [Member] | Vesting on Last Day of Each Quarter Thereafter [Member] | Executive [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Restricted stock unit award vests percentage | 33.33% | ||
Performance Shares [Member] | Vesting Based On Performance Goals [Member] | Executive [Member] | Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Percentage of performance-based restricted stock units | 110% | ||
Performance Shares [Member] | Vesting Based On Performance Goals [Member] | Executive [Member] | Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Percentage of performance-based restricted stock units | 75% | ||
Performance Shares [Member] | Vesting on Last Day of Current Fiscal Year Ending [Member] | Executive [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Restricted stock unit award vests percentage | 33.33% | ||
Stock Compensation Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares) | $ 408,275 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year 10 months 24 days |
Stock Compensation Plans - Sche
Stock Compensation Plans - Schedule of Restricted Stock Unit Awards Outstanding under 2007 Plan (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding non-vested restricted stock units at beginning of year: | 154,131 | 105,978 | 209,450 |
Granted | 157,145 | 129,092 | 26,058 |
Vested | (48,890) | (70,782) | (127,130) |
Cancelled/forfeited | (101,428) | (10,157) | (2,400) |
Outstanding non-vested restricted stock units as of February 29 or 28: | 160,958 | 154,131 | 105,978 |
Weighted average grant date fair value | $ 5.59 | $ 5.23 | $ 9.33 |
Weighted average remaining vesting period (in years) | 1 year 11 months 8 days | 1 year 8 months 23 days | 2 years 3 months 3 days |
Stock Compensation Plans - Sc_2
Stock Compensation Plans - Schedule of Stock Option Awards Outstanding under 2007 Plan (Details) - $ / shares | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Share-Based Payment Arrangement [Abstract] | |||
Outstanding stock options at beginning of year: | 36,144 | 0 | 0 |
Granted | 0 | 36,144 | 0 |
Exercised | 0 | 0 | 0 |
Cancelled/forfeited | (18,446) | 0 | 0 |
Outstanding stock options as of February 29 or 28: | 17,698 | 36,144 | 0 |
Weighted average exercise price | $ 6.49 | $ 6.49 | |
Weighted average remaining contractual term (in years) | 8 years 3 months 3 days | 9 years 3 months 3 days |
Leasing Arrangements - Addition
Leasing Arrangements - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease liability | $ 1,694,471 | ||
Weighted average discount rate percent | 3.90% | 3.40% | 3.10% |
Future lease liability | $ 1,874,640 | ||
Weighted average lease term | 5 years 9 months 18 days | 5 years 6 months | 6 years 8 months 12 days |
Operating lease, expense | $ 599,853 | $ 565,046 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 56,012 | $ 1,472,667 | $ 588,475 |
Leasing Arrangements - Schedule
Leasing Arrangements - Schedule of Maturities of Lease Liabilities for Operating Leases (Details) | Feb. 29, 2024 USD ($) |
Leases [Abstract] | |
FYE 25 | $ 514,169 |
FYE 26 | 496,466 |
FYE 27 | 284,667 |
FYE 28 | 135,010 |
FYE 29 | 103,198 |
Thereafter | 341,130 |
Total | 1,874,640 |
Less: Imputed interest | (180,169) |
Present value of lease liabilities | $ 1,694,471 |
Leasing Arrangements - Schedu_2
Leasing Arrangements - Schedule of Lease Expense (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Lessee, Lease, Description [Line Items] | |||
Cash paid for amounts included in the measurement of lease liabilities | $ 543,543 | $ 572,079 | $ 563,264 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended |
Feb. 29, 2024 USD ($) | |
Commitments and Contingencies [line Items] | |
Contractual Obligation | $ 270,000 |
Minimum [Member] | |
Commitments and Contingencies [line Items] | |
Purchase contracts term | 6 months |
Maximum [Member] | |
Commitments and Contingencies [line Items] | |
Purchase contracts term | 18 months |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | Oct. 02, 2021 | Dec. 20, 2019 |
Preferred stock, redemption price per share (in dollars per share) | $ 0.01 | |
Payments for repurchase of redeemable preferred stock | $ 61,276 | |
Warrant to Purchase Common Stock [Member] | ||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ 8.76 | |
Certain revenue thresholds, cumulative basis connection with performance basis (year) | 5 years | |
Warrants and rights outstanding, term (month) | 6 months | |
Warrant to Purchase Common Stock [Member] | Maximum [Member] | ||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 960,677 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 0 | $ (116,792) | $ 204,058 |
State | 0 | 8,472 | 46,704 |
Total Current | 0 | (108,320) | 250,762 |
Federal | 0 | 621,841 | (231,430) |
State | 0 | 100,322 | (36,144) |
Total Deferred | 0 | 722,163 | (267,574) |
Total | 0 | 613,843 | (16,812) |
Income Tax Provision (Benefit) | 0 | 613,843 | (16,812) |
Discontinued operations | 0 | 618,308 | 52,194 |
Total tax provision (benefit) | $ 0 | $ 1,232,151 | $ 35,382 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate and the Effective Rate (Details) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Income Tax Disclosure [Abstract] | |||
Statutory rate | 21% | 21% | 21% |
State income taxes, net of federal benefit | 0% | 2.90% | 3.80% |
Work opportunity tax credits | 0% | 0% | (1.20%) |
Equity compensation tax expense | 0% | (0.70%) | (8.20%) |
Compensation and benefits permanent differences | (0.20%) | (3.20%) | (1.90%) |
Other | 1.60% | 0.70% | 0.10% |
Valuation allowance | (22.40%) | (33.30%) | 0% |
Impact of CARES act | 0% | 0% | (10.30%) |
Effective tax rate | 0% | (12.60%) | 3.30% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 |
Components of Deferred Tax Assets and Liabilities [Abstract] | |||
Allowance for doubtful accounts and notes | $ 169,615 | $ 182,031 | |
Inventories | 30,849 | 100,725 | |
Accrued compensation | 437,972 | 158,652 | |
Loss provisions and deferred income | 303,600 | 340,652 | |
Self-insurance accrual | 27,893 | 24,098 | |
Interest & other | 17,239 | 0 | |
Restructuring charges | 99,069 | 98,693 | |
Right of use liabilities | 479,732 | ||
Accumulated net losses | 3,576,640 | 1,669,288 | |
Valuation allowance | (3,106,393) | (1,721,306) | $ (98,693) |
Net deferred tax assets | 2,036,216 | 852,833 | |
Depreciation and amortization | (1,450,441) | (771,593) | |
Right of use assets | (479,609) | ||
Prepaid expenses | (106,166) | (81,240) | |
Deferred Tax Liabilities | (2,036,216) | (852,833) | |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Income Tax Valuation Allowances (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance at beginning of period | $ 1,721,306 | $ 98,693 |
Tax expense realized by valuation allowance | 1,385,087 | 1,622,613 |
Valuation allowance at end of period | $ 3,106,393 | $ 1,721,306 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Deferred tax assets, operating loss carryforwards | $ 1,600,000 | ||
Effective tax rate | 0% | (12.60%) | 3.30% |
Federal effective tax rate | 21% | 21% | 21% |
Deferred tax assets, operating loss carryforwards, domestic | $ 3,576,640 | $ 1,669,288 | |
Income tax expense | 0 | $ 613,843 | $ (16,812) |
U-Swirl Segment [Member] | |||
Operating loss carryforwards | 1,811,000 | ||
Deferred tax assets, operating loss carryforwards, domestic | $ 445,000 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan employers matching contribution vesting period (Year) | 3 years | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 25% | ||
Defined contribution plan, maximum annual contributions per employee, percent | 1.50% | ||
Defined contribution plan, employer discretionary contribution amount | $ 62,000 | $ 68,000 | $ 67,000 |
Operating Segments - Additional
Operating Segments - Additional Information (Details) | 12 Months Ended |
Feb. 29, 2024 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Operating Segments - Summary of
Operating Segments - Summary of Segment Reporting Information (Details) - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 27,950,687 | $ 30,432,352 | $ 29,488,548 |
Segment profit (loss) | (4,875,717) | (4,874,513) | (516,529) |
Total assets | 20,577,218 | 21,986,827 | 26,880,761 |
Capital expenditures | 3,017,473 | 1,000,015 | 941,327 |
Total depreciation and amortization | 887,299 | 765,263 | 740,175 |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 29,080,445 | 31,694,039 | 30,562,290 |
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | (1,129,758) | (1,261,687) | (1,073,742) |
Franchising [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 5,928,377 | 5,975,442 | 5,954,078 |
Segment profit (loss) | 1,758,953 | 2,601,485 | 2,862,263 |
Total assets | 1,255,165 | 1,245,331 | 1,160,343 |
Capital expenditures | 134,635 | 17,129 | 1,832 |
Total depreciation and amortization | 31,618 | 34,301 | 36,625 |
Franchising [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 5,928,870 | 5,980,945 | 5,959,624 |
Franchising [Member] | Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | (493) | (5,503) | (5,546) |
Manufacturing [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 20,703,409 | 23,372,133 | 22,374,175 |
Segment profit (loss) | 149,191 | 2,832,307 | 3,863,460 |
Total assets | 11,989,238 | 9,792,491 | 10,023,716 |
Capital expenditures | 2,297,046 | 899,219 | 797,178 |
Total depreciation and amortization | 755,502 | 652,405 | 627,071 |
Manufacturing [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 21,832,674 | 24,628,317 | 23,442,371 |
Manufacturing [Member] | Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | (1,129,265) | (1,256,184) | (1,068,196) |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,318,901 | 1,084,777 | 1,160,295 |
Segment profit (loss) | 144,842 | 130,880 | 75,962 |
Total assets | 510,189 | 442,977 | 625,850 |
Capital expenditures | 41,801 | 5,413 | 3,688 |
Total depreciation and amortization | 7,684 | 5,845 | 5,635 |
Retail [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,318,901 | 1,084,777 | 1,160,295 |
Retail [Member] | Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | 0 |
Unallocated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | 0 |
Segment profit (loss) | (6,928,703) | (10,439,185) | (7,318,214) |
Total assets | 6,822,626 | 10,506,028 | 15,070,852 |
Capital expenditures | 543,991 | 78,254 | 138,629 |
Total depreciation and amortization | 92,495 | 72,712 | 70,844 |
Unallocated [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | 0 |
Unallocated [Member] | Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 0 | $ 0 | $ 0 |
Contested Solicitation of Pro_3
Contested Solicitation of Proxies and Employee Agreements - Additional Information (Details) | 12 Months Ended | ||||||
Jan. 27, 2024 USD ($) shares | May 08, 2023 USD ($) Payment shares | Sep. 30, 2022 USD ($) shares | Nov. 03, 2021 shares | Feb. 29, 2024 USD ($) shares | Feb. 28, 2023 USD ($) shares | Feb. 28, 2022 USD ($) shares | |
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Share based compensation shares under options that were cancelled | shares | 18,446 | 0 | 0 | ||||
Stock-based compensation | $ 437,829 | $ 651,016 | |||||
Former Senior Vice President, Sales and Marketing [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Payments for Postemployment Benefits | $ 70,000 | ||||||
Cash award receive | $ 56,250 | ||||||
Former Senior Vice President Franchise Development [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Monthly consulting fee | $ 22,000 | ||||||
Number of acceleration of vesting shares | shares | 8,332 | ||||||
Retirement Bonus [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Number of biweekly payments | Payment | 26 | ||||||
Deferred Compensation Arrangement with Individual, Recorded Liability | $ 12,500 | ||||||
Cobra Payments [Member] | Former Senior Vice President Franchise Development [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Premium payment period after retirement | 18 months | ||||||
Cobra Payments [Member] | Former Senior Vice President Franchise Development [Member] | Maximum [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Number of acceleration of vesting shares | shares | 7,500 | ||||||
Letter Agreement [Member] | President and Chief Executive Officer [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Severance payment | $ 692,295 | 928,938 | $ 1,344,813 | ||||
Letter Agreement [Member] | Restricted Stock Units (RSUs) [Member] | President and Chief Executive Officer [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Number of acceleration of vesting shares | shares | 12,499 | 66,667 | |||||
Separation Agreement [Member] | Former Chief Executive Officer [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Severance payment | $ 660,000 | ||||||
Severance payment term | 15 months | ||||||
Accrued amount payment to be made under separation agreement | $ 692,000 | ||||||
Share based compensation shares under options that were cancelled | shares | 11,528 | ||||||
Vested stock options that could be exercised | shares | 16,140 | ||||||
Stock-based compensation | $ 69,000 | ||||||
Separation Agreement [Member] | Service-based RSU [Member] | Former Chief Executive Officer [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Share based compensation cancelled shares | shares | 27,130 | ||||||
Separation Agreement [Member] | Performance Shares [Member] | Former Chief Executive Officer [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Share based compensation cancelled shares | shares | 46,630 | ||||||
Contested Solicitation of Proxies [Member] | |||||||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||||||
Litigation settlement expense | $ 4,100,000 | $ 1,700,000 |
Contested Solicitation of Pro_4
Contested Solicitation of Proxies and Employee Agreements (Details) - President and Chief Executive Officer [Member] - Letter Agreement [Member] - USD ($) | 12 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||
Severance compensation: | $ 692,295 | $ 928,938 | $ 1,344,813 |
Consulting Services and Retirement Bonus: | 501,000 | 56,250 | 0 |
Total | 1,199,219 | 1,080,344 | 1,869,813 |
Restricted Stock Units (RSUs) [Member] | |||
Contested Solicitation Of Proxies And Change In Control Payments [line Items] | |||
Accelerated restricted stock unit compensation expense: | 74,956 | 95,156 | 525,000 |
Reversal of previously recorded restricted stock unit compensation expense: | $ (69,032) | $ 0 | $ 0 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Operations of Businesses Reported as Discontinued Operations (Details) - USD ($) | 12 Months Ended | |||
May 01, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | Feb. 28, 2022 | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Earnings (loss) from discontinued operations, net of tax | Earnings (loss) from discontinued operations, net of tax | Earnings (loss) from discontinued operations, net of tax | |
Income tax provision | $ 0 | $ 618,308 | $ 52,194 | |
Current assets held for sale | 0 | 83,004 | ||
Long-term assets held for sale | 0 | 1,765,846 | ||
Current liabilities held for sale | 0 | 178,939 | ||
Long term liabilities held for sale | 0 | 184,142 | ||
Notes receivable | $ 214,563 | 191,725 | ||
Assets and liabilities transferred | ||||
Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Earnings (loss) from discontinued operations, net of tax | |||
USwirl Inc [Member] | ||||
Total Revenue | $ 212,242 | 3,128,368 | 2,854,031 | |
Cost of sales | 0 | 654,353 | 556,933 | |
Operating Expenses | 143,198 | 2,048,129 | 2,087,021 | |
Gain on disposal of assets | (634,790) | 0 | 0 | |
Other expense, net | 0 | 0 | (137) | |
Earnings from discontinued operations before income taxes | 703,834 | 425,886 | 210,214 | |
Income tax provision | 0 | 618,308 | 52,194 | |
Earnings (loss) from discontinued operations, net of tax | 703,834 | (192,422) | 158,020 | |
Accounts and notes receivable, net | 0 | 75,914 | ||
Inventory, net | 0 | 6,067 | ||
Other | 0 | 1,023 | ||
Current assets held for sale | 0 | 83,004 | ||
Property and equipment, net | 0 | 0 | ||
Franchise rights, net | 0 | 1,708,336 | ||
Intangible assets, net | 0 | 48,095 | ||
Deferred income taxes | 0 | 0 | ||
Other | 0 | 9,415 | ||
Long-term assets held for sale | 0 | 1,765,846 | ||
Total Assets Held for Sale | 0 | 1,848,850 | ||
Accounts payable | 0 | 125,802 | ||
Accrued compensation | 0 | 11,205 | ||
Accrued liabilities | 0 | 11,981 | ||
Contract liabilities | 0 | 29,951 | ||
Current liabilities held for sale | 0 | 178,939 | ||
Contract liabilities, less current portion | 0 | 184,142 | ||
Long term liabilities held for sale | 0 | 184,142 | ||
Total Liabilities Held for Sale | 0 | 363,081 | ||
Assets and liabilities transferred | ||||
Liabilities | 0 | (363,081) | ||
Gain on disposal of assets | 634,790 | $ 0 | $ 0 | |
USwirl Inc [Member] | Discontinued Operations, Disposed of by Sale [Member] | ||||
Gain on disposal of assets | (634,790) | |||
Total Liabilities Held for Sale | 229,431 | |||
Cash proceeds from the sale of assets | $ 1,750,000 | 1,757,738 | ||
Notes receivable | 1,000,000 | 1,000,000 | ||
Total consideration received | $ 2,750,000 | 2,757,738 | ||
Assets and liabilities transferred | ||||
Franchise rights | 1,703,325 | |||
Inventory | 6,067 | |||
Liabilities | (229,431) | |||
Net assets transferred | 1,479,961 | |||
Costs associated with the sale of assets | 642,987 | |||
Gain on disposal of assets | $ 634,790 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) | 12 Months Ended | ||
May 01, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Notes receivable | $ 214,563 | $ 191,725 | |
USwirl Inc [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Notes receivable term | 3 years | ||
Discontinued Operations, Disposed of by Sale [Member] | USwirl Inc [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration pursuant to the asset purchase agreement | $ 2,750,000 | $ 2,757,738 | |
Cash proceeds from the sale of assets | 1,750,000 | 1,757,738 | |
Notes receivable | $ 1,000,000 | $ 1,000,000 | |
Notes receivable term | 3 years |