Rocky Mountain Chocolate Factory, Inc. (RMCF) entered into a business loan agreement with Alpine Bank on October 16, 2026. The company received a $2.0 million term loan, with the full amount funded on the same day. The proceeds are intended to be used for working capital purposes. The loan matures on October 16, 2028.
The Alpine Loan bears interest at a variable rate equal to the JP Morgan Chase Bank prime rate plus 1.00%. The interest rate is subject to a floor of 6.00% per annum and a ceiling of the lesser of 24.00% per annum or the maximum rate permitted by law. If an event of default occurs, the interest rate increases to 24.00%. The company is required to make monthly payments of accrued interest beginning November 16, 2026, with all outstanding principal and accrued interest due at maturity.
RMCF paid a $20,000 loan origination fee and a $30,000 cash collateral fee to the Colorado Housing and Finance Authority (CHFA) in connection with the loan. The company’s obligations under the Alpine Loan are secured by a security interest in substantially all of its assets and personal property. Additionally, the loan is secured by an assignment of a deposit account of approximately $1.0 million held by CHFA at Alpine Bank.
The loan agreement includes customary representations, warranties, and covenants. These restrictions prevent the company from incurring additional indebtedness, granting liens, merging, consolidating, selling assets outside the ordinary course of business, or paying dividends without Alpine Bank’s consent. The company is also required to maintain its deposit accounts, including its primary operating account, with Alpine Bank.
The loan documents also contain customary events of default, including payment defaults, covenant defaults, cross-defaults, insolvency events, a material adverse change in the company's financial condition, and any change in ownership of 25% or more of the company’s common stock. Upon an event of default, Alpine Bank may declare all outstanding amounts immediately due and payable.
In connection with this financing, the company also completed a sale-leaseback transaction for its manufacturing facility at 265 Turner Drive in Durango, Colorado. The property was sold to American Heritage Legacies, LLC for $6.6 million, and the company executed a commercial lease to continue operating the facility. The net proceeds from the sale were used to repay $6.6 million in principal and accrued interest outstanding under existing debt, resulting in no further obligations under those notes.
