Rocky Mountain Chocolate Factory(RMCF) - 2026 Q1 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This Quarterly Report contains forward-looking statements, which involve various risks and uncertainties, identifiable by specific terminology - This Quarterly Report contains forward-looking statements, which involve various risks and uncertainties, identifiable by words such as 'will,' 'intend,' 'believe,' 'expect,' and 'anticipate'[8] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[8] - Key risks and uncertainties include inflationary impacts, legal proceedings, changes in the confectionery business environment, seasonality, consumer interest, costs and availability of raw materials, and competition[8] PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Rocky Mountain Chocolate Factory, Inc. and its subsidiaries, including statements of operations, balance sheets, cash flows, and changes in stockholders' equity, along with detailed notes explaining significant accounting policies and specific financial line items Condensed Consolidated Statements of Operations This section presents the company's unaudited condensed consolidated statements of operations, detailing revenues, costs, expenses, and net loss for the period | Metric | Three Months Ended May 31, 2025 (in thousands) | Three Months Ended May 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Revenue | $6,373 | $6,407 | $(34) | (0.5)% | | Total Costs and Expenses | $6,518 | $8,037 | $(1,519) | (18.9)% | | Loss from Operations | $(145) | $(1,630) | $1,485 | (91.1)% | | Net Loss | $(324) | $(1,658) | $1,334 | (80.5)% | | Basic Loss per Common Share | $(0.04) | $(0.26) | $0.22 | (84.6)% | Condensed Consolidated Balance Sheets This section presents the company's unaudited condensed consolidated balance sheets, outlining assets, liabilities, and stockholders' equity at specific dates | Metric | May 31, 2025 (in thousands) | February 28, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $20,096 | $21,175 | $(1,079) | (5.1)% | | Total Liabilities | $13,364 | $14,200 | $(836) | (5.9)% | | Total Stockholders' Equity | $6,732 | $6,975 | $(243) | (3.5)% | | Cash and cash equivalents | $893 | $720 | $173 | 24.0% | | Accounts receivable, less allowance for credit losses | $2,327 | $3,405 | $(1,078) | (31.7)% | | Inventories | $4,633 | $4,630 | $3 | 0.1% | | Accounts payable | $4,172 | $4,816 | $(644) | (13.4)% | Condensed Consolidated Statement of Cash Flows This section presents the company's unaudited condensed consolidated statement of cash flows, categorizing cash activities into operating, investing, and financing | Metric | Three Months Ended May 31, 2025 (in thousands) | Three Months Ended May 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Cash Provided by (Used in) Operating Activities | $350 | $(2,157) | $2,507 | | Net Cash Used in Investing Activities | $(177) | $(38) | $(139) | | Net Cash Provided by Financing Activities | $- | $750 | $(750) | | Net Increase (Decrease) in Cash and Cash Equivalents | $173 | $(1,445) | $1,618 | | Cash and Cash Equivalents, End of Period | $893 | $637 | $256 | Condensed Consolidated Statements of Changes in Stockholders' Equity This section presents the company's unaudited condensed consolidated statements of changes in stockholders' equity, detailing movements in capital accounts | Metric (in thousands) | May 31, 2025 | February 28, 2025 | Change (in thousands) | | :-------------------------------- | :----------- | :---------------- | :-------------------- | | Total Stockholders' Equity | $6,732 | $6,975 | $(243) | | Accumulated Deficit | $(5,712) | $(5,388) | $(324) | | Equity compensation, restricted stock units, net of shares withheld | $81 | $- | $81 | | Metric (in thousands) | May 31, 2024 | February 29, 2024 | Change (in thousands) | | :-------------------------------- | :----------- | :---------------- | :-------------------- | | Total Stockholders' Equity | $9,018 | $10,636 | $(1,618) | | Retained Earnings / (Accumulated Deficit) | $(924) | $734 | $(1,658) | | Equity compensation, restricted stock units, net of shares withheld | $40 | $- | $40 | Notes to Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, explaining significant accounting policies and specific financial line items NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note describes the company's business, revenue sources, store network, and addresses going concern considerations - Rocky Mountain Chocolate Factory, Inc. is an international franchisor, confectionery producer, and retail operator, founded in 1981 and headquartered in Durango, Colorado[24] - Revenues are primarily derived from sales of confectionery products to franchisees, initial franchise fees and royalties, sales at Company-owned stores, and marketing fees[25] | Store Type | Open at Feb 28, 2025 | Opened | Closed | Sold | Open at May 31, 2025 | | :----------------------------- | :------------------- | :----- | :----- | :--- | :------------------- | | Company-owned stores | 2 | - | - | - | 2 | | Franchise stores - Domestic | 138 | 1 | (3) | - | 136 | | International license stores | 3 | - | - | - | 3 | | Cold Stone Creamery - co-branded | 107 | - | (3) | - | 104 | | SWRL - co-branded | 10 | - | - | - | 10 | | Total | 260 | 1 | (6) | - | 255 | - The company incurred a net loss of $0.3 million and was not in compliance with a debt covenant as of May 31, 2025, raising substantial doubt about its ability to continue as a going concern, though a waiver was received[29] - Management plans to reduce overhead, improve manufacturing efficiencies, increase profits and gross margins, and boost sales through holiday products and e-commerce to address going concern issues[30] NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION This note provides additional details on cash paid for interest and income taxes, along with non-cash investing and financing activities | Cash Paid (Received) For (in thousands) | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | | :------------------------------------- | :------------------------------ | :------------------------------ | | Interest | $188 | $35 | | Income taxes | $- | $6 | | Supplemental Non-Cash Activities (in thousands) | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | | Accounts receivable exchanged for notes receivable | $112 | $- | | Inventory accrued but not yet paid | $219 | $- | NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS This note outlines the company's policies for recognizing revenue from customer contracts, including franchise fees and gift card breakage - Initial franchise fees and license fees are recognized as revenue proportionately over the term of the franchise agreement, generally 10 years, as initial services are not distinct from continuing rights[39][40][42] | Contract Liabilities (in thousands) | May 31, 2025 | May 31, 2024 | | :---------------------------------- | :----------- | :----------- | | Beginning of period | $743 | $829 | | Revenue recognized | $(36) | $(70) | | Contract fees received | $11 | $53 | | End of period | $718 | $812 | - No gift card breakage was recognized during the three months ended May 31, 2025, or 2024, as recognition is based on historical redemption patterns or when redemption likelihood is remote[43] NOTE 4 – DISAGGREGATION OF REVENUE This note presents a detailed breakdown of the company's total revenues by segment and revenue type | Revenue Type (in thousands) | Franchising (2025) | Manufacturing (2025) | Retail (2025) | Total (2025) | Franchising (2024) | Manufacturing (2024) | Retail (2024) | Total (2024) | | :-------------------------- | :----------------- | :------------------- | :------------ | :----------- | :----------------- | :------------------- | :------------ | :----------- | | Franchise fees | $36 | $- | $- | $36 | $70 | $- | $- | $70 | | Durango Product sales | $- | $4,399 | $- | $4,399 | $- | $4,957 | $- | $4,957 | | Retail sales | $- | $- | $319 | $319 | $- | $- | $322 | $322 | | Royalty and marketing fees | $1,619 | $- | $- | $1,619 | $1,058 | $- | $- | $1,058 | | Total Revenues | $1,655 | $4,399 | $319 | $6,373 | $1,128 | $4,957 | $322 | $6,407 | NOTE 5 - INVENTORIES This note details the composition of the company's inventories, including ingredients, finished goods, and reserves | Inventory Component (in thousands) | May 31, 2025 | February 28, 2025 | | :--------------------------------- | :----------- | :---------------- | | Ingredients and supplies | $2,791 | $2,864 | | Finished candy | $2,015 | $2,277 | | Reserve for slow moving inventory | $(173) | $(511) | | Total inventories | $4,633 | $4,630 | NOTE 6 – PROPERTY AND EQUIPMENT, NET This note provides a breakdown of the company's property and equipment, net of accumulated depreciation, and related depreciation expense | Property and Equipment (in thousands) | May 31, 2025 | February 28, 2025 | | :------------------------------------ | :----------- | :---------------- | | Land | $124 | $124 | | Building | $5,468 | $5,415 | | Machinery and equipment | $15,019 | $14,904 | | Furniture and fixtures | $519 | $519 | | Leasehold improvements | $136 | $136 | | Transportation equipment | $326 | $326 | | Less accumulated depreciation | $(12,354) | $(12,015) | | Property and equipment, net | $9,238 | $9,409 | - Depreciation expense related to property and equipment totaled $0.3 million during the three months ended May 31, 2025, an increase from $0.2 million in the prior year[51] NOTE 7 – GOODWILL AND INTANGIBLE ASSETS This note details the company's goodwill and intangible assets, including their gross carrying values and accumulated amortization | Asset Type (in thousands) | May 31, 2025 Gross Carrying Value | May 31, 2025 Accumulated Amortization | February 28, 2025 Gross Carrying Value | February 28, 2025 Accumulated Amortization | | :------------------------ | :-------------------------------- | :------------------------------------ | :------------------------------------- | :----------------------------------------- | | Intangible assets subject to amortization: | | | | | | Store design | $395 | $(300) | $395 | $(295) | | Trademark/Non-competition agreements | $259 | $(151) | $259 | $(149) | | Goodwill: | | | | | | Retail | $362 | $- | $362 | $- | | Franchising | $97 | $- | $97 | $- | | Manufacturing | $97 | $- | $97 | $- | | Trademark | $20 | $- | $20 | $- | | Total Goodwill and Intangible Assets | $1,230 | $(451) | $1,230 | $(444) | - Amortization expense related to intangible assets totaled approximately $7 thousand during both the three months ended May 31, 2025, and 2024[52] NOTE 8 – NOTE PAYABLE This note describes the company's credit agreement, note payable terms, collateral, and compliance with debt covenants - The company entered into a credit agreement with RMC Credit Facility, LLC, a related party, for a $6.0 million note payable maturing on September 30, 2027, with interest accruing at 12% per annum[55] - The Credit Agreement is collateralized by the company's Durango real estate property, related inventory and property, plant and equipment, accounts receivable, and cash accounts[55] - As of May 31, 2025, the company was not in compliance with the maximum liabilities to tangible net worth covenant (2.0:1.0) but received a waiver from the Lender[57] NOTE 9 – COMMON STOCK This note outlines the company's equity incentive plan, stock awards, and stock-based compensation expense - The 2024 Equity Incentive Plan authorizes a total of 1,031,940 shares for stock awards, with 645,374 shares available for issuance as of May 31, 2025[58] | Metric (in thousands) | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | | :-------------------- | :------------------------------ | :------------------------------ | | Stock-based compensation expense | $81 | $40 | - Total unrecognized stock-based compensation expense for non-vested restricted stock units was approximately $0.4 million, expected to be recognized over the next 1.19 years[61] NOTE 10 - EARNINGS PER SHARE This note explains the calculation of basic and diluted earnings per share and the treatment of anti-dilutive securities - Basic earnings per share is calculated using the weighted-average number of common shares outstanding, while diluted earnings per share reflects potential dilution from restricted stock units[63] - During the three months ended May 31, 2025, 204,445 shares issuable upon vesting of restricted stock units were excluded from diluted EPS computation because their effect would have been anti-dilutive[64] NOTE 11 – LEASING ARRANGEMENTS This note details the company's operating lease arrangements, lease expenses, and future lease liability maturities - The company conducts its retail operations and supports production through non-cancelable operating leases for facilities, trucking equipment, and warehouse space[65][68] - Lease expense recognized in the consolidated statements of operations was $0.1 million for both the three months ended May 31, 2025, and 2024[68] | Lease Liabilities Maturities (in thousands) | Amount | | :---------------------------------------- | :----- | | FYE 26 | $369 | | FYE 27 | $287 | | FYE 28 | $137 | | FYE 29 | $105 | | FYE 30 | $51 | | Thereafter | $304 | | Total | $1,253 | | Less: Imputed interest | $(113) | | Present value of lease liabilities | $1,140 | - The weighted average lease term at May 31, 2025, was 5.65 years, and the weighted average discount rate used for operating leases was 3.9%[69] NOTE 12 – COMMITMENTS AND CONTINGENCIES This note discusses the company's purchase commitments for raw materials and involvement in legal disputes - The company frequently enters into 6-12 month purchase contracts for chocolate and certain nuts at fixed prices, designated as normal under the normal purchase and sale exception for derivatives[71][73] - The company is involved in the early stages of a legal dispute regarding the fulfillment of an agreement to sell franchise rights and intangible assets in connection with the sale of U-Swirl, but does not expect a material impact[74] NOTE 13 - OPERATING SEGMENTS This note provides financial information for the company's reportable segments: Franchising, Manufacturing, and Retail Stores - The company classifies its business interests into three reportable segments: Franchising, Manufacturing, and Retail Stores, along with an Unallocated category, for performance evaluation and resource allocation[77] | Segment (in thousands) | Total Revenues (2025) | Segment Profit (Loss) (2025) | Total Assets (2025) | Total Revenues (2024) | Segment Profit (Loss) (2024) | Total Assets (2024) | | :--------------------- | :-------------------- | :--------------------------- | :------------------ | :-------------------- | :--------------------------- | :------------------ | | Franchising | $1,655 | $839 | $1,936 | $1,128 | $144 | $989 | | Manufacturing | $4,399 | $92 | $13,947 | $4,957 | $(508) | $12,947 | | Retail | $319 | $25 | $776 | $322 | $(1) | $505 | | Unallocated | $- | $(1,101) | $3,437 | $- | $(1,265) | $4,579 | | Consolidated Net Loss | $6,373 | $(324) | $20,096 | $6,407 | $(1,658) | $19,020 | - The Manufacturing segment's profit improved significantly from a loss of $(508) thousand in 2024 to a profit of $92 thousand in 2025[77][79] NOTE 14 - INCOME TAXES This note describes the company's accounting for income taxes, including deferred taxes and valuation allowances - The company provides for income taxes using the liability method, recognizing deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities[80] - A valuation allowance to reduce the carrying amount of deferred income tax assets is established when it is more likely than not that some portion or all of the tax benefit will not be realized[81] - 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[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results for the three months ended May 31, 2025, compared to the prior year, highlighting key trends, revenue and expense drivers, liquidity, and significant accounting policies Overview This section provides a high-level description of Rocky Mountain Chocolate Factory, Inc.'s business, store operations, and key financial arrangements - Rocky Mountain Chocolate Factory, Inc. is an international franchisor, confectionery producer, and retail operator, founded in 1981 and headquartered in Durango, Colorado[88] - As of May 31, 2025, the company operated 255 stores (2 Company-owned, 114 licensee-owned, and 139 franchised) across 34 states and the Philippines[88] - The company has a $6.0 million credit agreement with RMC Credit Facility, LLC, a related party, with the note maturing on September 30, 2027[89] Current Trends Affecting Our Business and Outlook This section discusses macroeconomic factors, seasonal business fluctuations, and strategic drivers influencing the company's future performance - Macroeconomic inflationary trends and global supply chain disruptions have led to higher raw material, labor, and freight costs, contributing to lower factory, retail, and e-commerce sales[90] - The business is subject to seasonal fluctuations, with the strongest sales historically occurring during key holidays and summer vacation seasons[91] - Continued growth in earnings depends on increasing sales of premium chocolate products from the Durango facility, franchisee support for customer visits and transaction values, ongoing e-commerce revenue growth, and new franchise store growth[92] Results of Continuing Operations This section analyzes the company's financial performance for the three months ended May 31, 2025, compared to the prior year, detailing revenue and expense changes Three Months Ended May 31, 2025 Compared To the Three Months Ended May 31, 2024 This section provides a comparative analysis of the company's financial results for the three months ended May 31, 2025, against the same period in the prior year Results Summary This summary highlights key financial outcomes, including basic loss per share, revenues, operating loss, and net loss for the period | Metric | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Change | % Change | | :-------------------------- | :------------------------------ | :------------------------------ | :----- | :------- | | Basic loss per share | $(0.04) | $(0.26) | $0.22 | (84.6)% | | Revenues | $6,373 | $6,407 | $(34) | (0.5)% | | Operating loss | $(145) | $(1,630) | $1,485 | (91.1)% | | Net loss | $(324) | $(1,658) | $1,334 | (80.5)% | REVENUES This section details the company's revenue streams, including product sales, franchise fees, and royalty and marketing fees, and their period-over-period changes | Revenue Type (in thousands) | May 31, 2025 | May 31, 2024 | Change | % Change | | :-------------------------- | :----------- | :----------- | :----- | :------- | | Durango product and retail sales | $4,718 | $5,279 | $(561) | (10.6)% | | Franchise fees | $36 | $70 | $(34) | (48.6)% | | Royalty and marketing fees | $1,619 | $1,058 | $561 | 53.0% | | Total | $6,373 | $6,407 | $(34) | (0.5)% | - The decrease in Durango product and retail sales was primarily due to the non-renewal of an unprofitable contract with a specialty market customer[97] - Royalty and marketing fees increased by $0.6 million, driven by higher royalties on sales revenue generated from products made in the store, while franchise fee revenue decreased due to fewer store openings[100] COSTS AND EXPENSES This section analyzes the company's various cost and expense categories, including cost of sales, franchise costs, and general and administrative expenses | Expense Category (in thousands) | May 31, 2025 | May 31, 2024 | Change | % Change | | :------------------------------ | :----------- | :----------- | :----- | :------- | | Total cost of sales | $4,392 | $5,586 | $(1,194) | (21.4)% | | Franchise costs | $595 | $541 | $54 | 10.0% | | Sales and marketing | $206 | $430 | $(224) | (52.1)% | | General and administrative | $1,001 | $1,239 | $(238) | (19.2)% | | Retail operating | $206 | $199 | $7 | 3.5% | | Depreciation and amortization (excl. cost of sales) | $118 | $42 | $76 | 181.0% | | Total | $6,518 | $8,037 | $(1,519) | (18.9)% | | Gross Margin (in thousands) | May 31, 2025 | May 31, 2024 | Change | % Change | | :-------------------------- | :----------- | :----------- | :----- | :------- | | Total gross margin | $326 | $(307) | $633 | 206.2% | | Gross margin percentage | 6.9% | (5.8)% | 13% | 218.8% | - The increase in gross margin percentage was primarily due to the cancellation of certain unprofitable contracts and adjusted sales prices as of March 1, 2025, to achieve targeted margins[103] - Sales and marketing costs decreased significantly due to cost-cutting measures and a re-evaluation of marketing strategies[105] - General and administrative costs decreased primarily due to various cost-cutting measures[106] - Depreciation and amortization (exclusive of amounts in cost of sales) increased by 181.0% due to investments in computer software and production equipment[108] Non-GAAP Measures This section defines and presents non-GAAP financial measures, such as adjusted gross margin, used to supplement GAAP reporting - Adjusted gross margin is a non-GAAP measure, calculated as total gross margin plus depreciation and amortization, used to supplement GAAP gross margin for understanding operating performance and cash generation[102] | Adjusted Gross Margin (non-GAAP, in thousands) | May 31, 2025 | May 31, 2024 | Change | % Change | | :--------------------------------------------- | :----------- | :----------- | :----- | :------- | | Total Adjusted Gross Margin | $554 | $(111) | $665 | 599.1% | | Total Adjusted Gross Margin percentage | 11.7% | (2.1)% | 14% | 658.4% | Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term obligations, focusing on working capital, cash flows, and debt covenant compliance | Metric (in millions) | May 31, 2025 | February 28, 2025 | Change | | :------------------- | :----------- | :---------------- | :----- | | Working capital | $2.2 | $2.4 | $(0.2) | | Cash and cash equivalents | $0.9 | $0.7 | $0.2 | - Operating activities provided $0.4 million in cash for the three months ended May 31, 2025, a significant improvement from using $2.2 million in the prior year[112] - The company's net loss and non-compliance with a debt covenant (liabilities to tangible net worth) raise substantial doubt about its ability to continue as a going concern, although a waiver was received from the Lender[115][118] - The company continues to explore additional means of strengthening its liquidity position and ensuring compliance with debt financing covenants, which may include obtaining waivers from lenders[119] Significant Accounting Policies This section reiterates that the preparation of financial statements involves management judgments and estimates, with no material changes to policies - The preparation of consolidated financial statements requires management to make judgments, assumptions, and estimates in conformity with GAAP[120] - There have been no material changes to the company's significant accounting policies disclosed in its Annual Report on Form 10-K for the fiscal year ended February 28, 2025[120] Off Balance Sheet Arrangements This section confirms the absence of material off-balance sheet arrangements and outlines existing purchase obligations - As of May 31, 2025, the company had no material off-balance sheet arrangements or obligations[121] - The company had approximately $2.6 million in purchase obligations, primarily for future commodity purchases for manufacturing[121] Impact of Inflation This section discusses how inflationary pressures on raw materials, labor, and lease expenses affect the company's operations and pricing strategies - Inflationary factors, such as increases in the costs of raw materials, labor, and lease-related expenses, directly affect the company's operations[122] - Most of the company's leases provide for cost-of-living adjustments and require payment of taxes, insurance, and maintenance expenses, all subject to inflation[122] - There is no assurance that the company will be able to pass on increased costs to its customers[122] Seasonality This section explains the seasonal nature of the company's sales and its impact on quarterly financial results - The company is subject to seasonal fluctuations in sales, with the strongest sales historically occurring during key holidays and the summer vacation season[124] - Quarterly results are affected by the timing of new store openings and sales of new franchise locations, meaning results for any quarter are not necessarily indicative of a full fiscal year[124] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Rocky Mountain Chocolate Factory, Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide the information regarding quantitative and qualitative disclosures about market risk[125] Item 4. Controls and Procedures Management, under the supervision of the Interim CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of May 31, 2025. There were no material changes in internal control over financial reporting during the quarter - Management, under the supervision and with the participation of the Interim Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of May 31, 2025[128] - There were no changes in internal control over financial reporting during the quarter ended May 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[129] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and other disclosures Item 1. Legal Proceedings The company is not aware of any pending legal actions that would have a material adverse effect on its business or operations. While it may be involved in disputes in the ordinary course of business, no material adverse effects are currently expected - The company is not aware of any pending legal actions that would, if determined adversely, have a material adverse effect on its business and operations[131] - The company may, from time to time, become involved in disputes and proceedings arising in the ordinary course of business, but no material adverse effect is currently expected[132] Item 1A. Risk Factors This section refers readers to the risk factors discussed in the company's Annual Report on Form 10-K for the fiscal year ended February 28, 2025, noting that there have been no material changes to these risk factors - Readers should carefully consider the factors discussed in Part 1, Item 1A. 'Risk Factors' in the Annual Report on Form 10-K for the fiscal year ended February 28, 2025[133] - There have been no material changes in the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended February 28, 2025[133] Item 2. Unregistered Sale of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities and use of proceeds during the period[134] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities during the period[135] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the registrant[136] Item 5. Other Information During the three months ended May 31, 2025, no directors or officers adopted or terminated Rule 10b5-1 trading arrangements. As of July 11, 2025, the company had approximately 431 record holders of its common stock - During the three months ended May 31, 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement[137] - On July 11, 2025, the registrant had approximately 431 record holders of its common stock[138] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report, including certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL documents - Exhibits include Certifications Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002, and Inline XBRL Instance Document, Taxonomy Extension Schema, and Cover Page Interactive Data File[140] - The certifications attached as Exhibits 32.1 and 32.2 are not deemed filed with the SEC and are not to be incorporated by reference into any other filing[140] Signatures This section formally attests to the accuracy of the report, signed by the Interim Chief Executive Officer and Chief Financial Officer - The report is signed on July 15, 2025, by Jeffrey R. Geygan, Interim Chief Executive Officer, and Carrie E. Cass, Chief Financial Officer[146]