RMCF Received
Letter From Immaculate Confection Reiterating Support for
Strengthening Partnership with Current RMCF Leadership and Concern
About AB Value’s False Public Statements
Urges
Stockholders to Vote "FOR" ALL of the Company's Nominees TODAY on
the WHITE Proxy Card
Rocky Mountain Chocolate
Factory, Inc. (NASDAQ: RMCF) (the "Company" or “RMCF”), one of
North America's largest retailers, franchisers and manufacturers of
premium, handcrafted chocolates and confections, today notified
stockholders that the Company has received a letter from Immaculate
Confection, operator of RMCF’s Canadian master franchise network,
expressing significant concerns about the misleading information
and false statements AB Value Management LLC (“AB Value”) continues
to disseminate publicly.
In the letter, Brian Kerzner,
President of Immaculate Confection, reiterated RMCF’s public
statements that the organizations are working productively together
to explore potential opportunities to strengthen their
relationship. Mr. Kerzner stated his serious concerns with AB
Value’s public conduct and expressed his belief that AB Value’s
control of RMCF’s Board would likely challenge the ability of the
two organizations to collaborate in the future toward growing their
business together.
RMCF reminds all stockholders
to vote on the WHITE proxy card today FOR ALL
of RMCF’s director nominees ahead
of the Company’s 2021 Annual Meeting of Stockholders (the "Annual
Meeting"), to be held October 6, 2021.
A copy of the letter Mr.
Kerzner sent to RMCF’s Board of Directors is copied
below:
*****
September 29, 2021
Dear RMCF:
I am writing further to my
extensive discussions with management of RMCF and in particular, I
am writing to respond to certain statements made in a public filing
made by the group of shareholders who are seeking to elect their
own slate of directors (the “AB Group”) on September 17, a group
that includes one of your current directors. On a page marked as
though it was slide 65, there is reference to the AB Group’s
intention to “Resolve Canadian Franchisee”. From my perspective,
there is nothing to resolve. We settled our litigation on August 4.
Is the AB Group not aware of the resolution we have
reached?
Our settlement provides that
we will spend some time in the coming weeks and months determining
if there is a way we can work together going forward. If we cannot,
then I am free to go my own way, if not with your blessing, at
least without any further interference from you - and vice versa.
On the slide marked 61, there is discussion of the AB Group’s
intention to reach a mutually beneficial agreement with me as the
Canadian franchisee. I do not understand this, since I have been in
extensive constructive discussions with Bryan Merryman, Frank Crail
and Jeff Geygan since we settled on August 4 and thought that I was
doing so with the knowledge and support of the Board of Directors
of RMCF. In my mind, we have already fleshed out many of the
details of what that going forward arrangement would look like. I
will go further and say that I thought we had a deal. Again, is the
AB Group not aware of our discussions? Or are they simply
unsupportive? The fact that they have put out a report stating
their intentions with respect to me and my operations that is
completely inconsistent with reality is unhelpful.
I realize that you are in the
middle of a contest over control of the Board, and as such you are
unwilling to work on our deal until after your AGM, but it is
misleading to say that the work of resolving the Canadian issue or
the negotiation of an arrangement with Canada has yet to be done. I
have no intention of negotiating anything different than the terms
that have already been discussed. Furthermore, the terms that have
been discussed assume I will be dealing with the people I have been
dealing with to date - it would be a mistake to assume that I will
happily pivot to work with a completely different group of people
after your AGM.
Let me be clear: I trust and
respect the people I have been talking to over the past six weeks.
I say this despite the fact that they sued me in order to force a
renegotiation of our deal. My relationship with Bryan goes back 20
years and with Frank longer. I understand what they are trying to
do, and I believe that they understand what I have been trying to
do. I also think that they realize that RMCF will be in much better
shape if we can stop working against each other and take the best
ideas of both country’s operations and make a bigger, stronger
company. Make no mistake, this is an idea we have considered off
and on for as long as I have been a franchisee of RMCF. I have
appreciated what Jeff Geygan has brought to the dynamic of our
relationship and I think he helped us both see how much better we
could be if we worked together.
On the other hand, I have not
had any discussions with the AB Group. If they are successful and a
majority of the Board is replaced with the nominees from their
group, will they honour the settlement agreement and the plans for
the future that we have been discussing? If not, I am prepared to
invoke the terms of our settlement and take Canada in its own
direction. I have a robust business model and am willing to go it
alone if RMCF does not want to bring North American operations
under one business. Similarly, if the appointment of a new board
causes a complete disruption to the management team of RMCF, then I
expect I would rather go my own way than join my business with a
dysfunctional RMCF.
I am writing to set these
things out because I want to be transparent with you. I think it
goes without saying, but I want to make sure you realize - the
plans that we have been jointly making for the future of our two
organizations are deeply personal and based on the trust and
respect I have for the people involved. They are not transferable
unless I am as impressed with whoever I wind up dealing with next
as I have been with current management. I have seen nothing to date
to give me confidence that will be the case.
Sincerely,
Brian Kerzner
President, Immaculate
Confection
*****
RMCF strongly urges
stockholders to discard any blue proxy cards you may receive and
vote on the WHITE proxy card today FOR ALL
six of the highly-qualified and
very experienced nominees. If you have already returned a blue
proxy card, you can change your vote simply by voting by telephone,
via the Internet or by signing, dating and returning a
WHITE proxy card
today.
RMCF’s proxy statement and
other important information related to the Annual Meeting can be
found on the SEC's website at www.sec.gov and on the Company's
website at rmcf.com/SEC-Filings.
Your vote is important, no
matter how many shares you own.
If you have any questions
about how to vote your shares, or need additional assistance,
please contact the firm assisting us in the solicitation of
proxies:
Georgeson LLC 1290 Avenue of
the Americas, 9th Floor New York, New York 10104 (888) 658-5755
(Toll Free)
Please refer to the enclosed
WHITE proxy card for information on how to vote by telephone or by
Internet, or simply complete, sign and date the WHITE proxy card
and return it TODAY in the postage-paid envelope provided.
About Rocky Mountain Chocolate Factory, Inc. Rocky Mountain Chocolate Factory, Inc.,
headquartered in Durango, Colorado, is an international franchiser
of gourmet chocolate, confection and self-serve frozen yogurt
stores and a manufacturer of an extensive line of premium
chocolates and other confectionery products. The Company, its
subsidiaries and its franchisees and licensees operate more than
300 Rocky Mountain Chocolate Factory and self-serve frozen yogurt
stores across the United States, South Korea, Qatar, the Republic
of Panama, and The Republic of the Philippines. The Company's
common stock is listed on the Nasdaq Global Market under the symbol
"RMCF."
Important Additional Information and Where to Find It
This communication relates to the
Annual Meeting. In connection with the Annual Meeting, Rocky
Mountain Chocolate Factory, Inc. (the “Company” or “RMCF”) filed a
definitive proxy statement on Schedule 14A, an accompanying
WHITE proxy card and other
relevant documents with the Securities and Exchange Commission (the
"SEC") on September 9, 2021 in connection with the solicitation of
proxies from stockholders for the Annual Meeting. The definitive
proxy statement and a form of WHITE proxy were first mailed or otherwise
furnished to the stockholders of the Company on September 9, 2021
as supplemented on September 20, 2021. BEFORE MAKING ANY
VOTING DECISION, STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE
COMPANY'S DEFINITIVE PROXY STATEMENT IN ITS ENTIRETY AND ANY OTHER
DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE ANNUAL
MEETING OR INCORPORATED BY REFERENCE IN THE DEFINITIVE PROXY
STATEMENT, IF ANY, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE ANNUAL MEETING. This communication is not a
substitute for the definitive proxy statement or any other document
that may be filed by the Company with the SEC. Investors and stockholders may obtain a copy
of the documents free of charge at the SEC's website at
www.sec.gov, and in the "SEC Filings" section of the of the
Company's Investor Relations website at
www.rmcf.com/Investor-Relations.aspx or by contacting the Company's
Investor Relations department at (970) 375-5678, as soon as
reasonably practicable after such materials are electronically
filed with, or furnished to, the SEC. In addition, the documents
(when available) may be obtained free of charge by directing a
request by mail or telephone to: Rocky Mountain Chocolate Factory,
Inc., 265 Turner Drive, Durango, Colorado 81303, Attn: Secretary,
(970) 259-0554.
Certain Information Regarding Participants to the
Solicitation The Company, its
directors and certain of its directors, director nominees,
executive officers and members of management and employees of the
Company and agents retained by the Company are participants in the
solicitation of proxies from stockholders in connection with
matters to be considered at the Annual Meeting. Information
regarding the Company's directors, director nominees and executive
officers, and their beneficial ownership of the Company's common
stock is set forth in the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 2021, filed with the SEC on June
1, 2021, as amended by Amendment No. 1 on Form 10-K/A filed with
the SEC on June 28, 2021, and in the definitive proxy statement.
Changes to the direct or indirect interests of the Company's
directors and executive officers are set forth in SEC filings on
Initial Statements of Beneficial Ownership on Form 3, Statements of
Change in Ownership on Form 4 and Annual Statements of Changes in
Beneficial Ownership on Form 5. These documents are available free
of charge as described above.
Forward-Looking Statements This press release includes statements of the
Company's expectations, intentions, plans and beliefs that
constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and are
intended to come within the safe harbor protection provided by
those sections. These forward-looking statements involve various
risks and uncertainties. The nature of the Company's operations and
the environment in which it operates subjects it to changing
economic, competitive, regulatory and technological conditions,
risks and uncertainties. The statements, other than statements of
historical fact, included in this press release are forward-looking
statements. Many of the forward-looking statements contained in
this press release may be identified by the use of forward-looking
words such as "will," "intend," "believe," "expect," "anticipate,"
"should," "plan," "estimate," "potential," or similar expressions.
Factors which could cause results to differ include, but are not
limited to: the impact of the COVID-19 pandemic and global economic
conditions on the Company's business, including, among other
things, online sales, factory sales, retail sales and royalty and
marketing fees, the Company's liquidity, the Company's cost cutting
and capital preservation measures, achievement of the anticipated
potential benefits of the strategic alliance with Edible
Arrangements®, LLC and its affiliates ("Edible"), the ability to
provide products to Edible under the strategic alliance, Edible's
ability to increase the Company's online sales, changes in the
confectionery business environment, seasonality, consumer interest
in the Company's products, general economic conditions, the success
of the Company's frozen yogurt business, receptiveness of the
Company's products internationally, consumer and retail trends,
costs and availability of raw materials, competition, the success
of the Company's co-branding strategy, the success of international
expansion efforts and the effect of government regulations.
Government regulations which the Company and its franchisees and
licensees either are, or may be, subject to and which could cause
results to differ from forward-looking statements include, but are
not limited to: local, state and federal laws regarding health,
sanitation, safety, building and fire codes, franchising,
licensing, employment, manufacturing, packaging and distribution of
food products and motor carriers. For a detailed discussion of the
risks and uncertainties that may cause the Company's actual results
to differ from the forward-looking statements contained herein,
please see the "Risk Factors" contained in Item 1A. of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 2021, as amended. Additional factors that might cause
such differences include, but are not limited to: the length and
severity of the current COVID-19 pandemic and its effect on among
other things, factory sales, retail sales, royalty and marketing
fees and operations, the effect of any governmental action or
mandated employer-paid benefits in response to the COVID-19
pandemic, and the Company's ability to manage costs and reduce
expenditures and the availability of additional financing if and
when required. These forward-looking statements apply only as of
the date hereof. As such they should not be unduly relied upon for
more current circumstances. Except as required by law, the Company
undertakes no obligation to release publicly any revisions to these
forward-looking statements that might reflect events or
circumstances occurring after the date of this press release or
those that might reflect the occurrence of unanticipated
events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210930005570/en/
Media Contacts: Dan
Scorpio / Jake Yanulis Abernathy MacGregor amg-rmcf@abmac.com (212) 371-5999 Investor
Contact: William P.
Fiske Georgeson LLC
(212) 440-9128
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