Business
Rocky Mountain Chocolate Factory and Edible Arrangements Join Forces in Groundbreaking Strategic Partnership
DURANGO, CO / ACCESSWIRE / December 23, 2019 / Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) and Edible Arrangements®, LLC have entered into a
About this update from Rocky Mountain Chocolate Factory, Inc.
[{"type":"text","content":"DURANGO, CO / ACCESSWIRE / December 23, 2019 / Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) and Edible Arrangements®, LLC have entered into a long-term strategic alliance whereby Rocky Mountain will become the exclusive provider of certain branded chocolate products to Edible, its affiliates and its franchisees. The strategic alliance represents the culmination of Rocky Mountain's exploration of its strategic alternatives, as announced on May 29, 2019.Rocky Mountain Chocolate Factory branded products will be available for purchase both on Edible's website as well as through over 1,000 franchised Edible Arrangement locations nationwide. In addition, due to Edible's significant e-commerce expertise and scale, Edible and Rocky Mountain have also executed a letter of intent for Edible to be responsible for all e-commerce sales from the Rocky Mountain corporate website and the broader Rocky Mountain e-commerce eco-system.As part of the strategic alliance, Rocky Mountain will issue Edible warrants to purchase up to 960,677 shares of Rocky Mountain common stock at an exercise price of $8.76 per share. The warrants will vest annually over the five-year contractual period if Edible achieves various revenue thresholds on an annual or cumulative five-year basis. Such annual revenue thresholds for vesting reach a maximum of $46 million in the fifth year of the contract. The maximum shares of Rocky Mountain common stock underlying such warrants, if fully vested, represent a total of 16% of the current Rocky Mountain shares of common stock currently outstanding.In conjunction with the strategic alliance, Edible CEO and founder Tariq Farid, through his affiliate, will purchase $1 million of Rocky Mountain common stock and, effective January 2020, will join the Company's Board of Directors, bringing his significant expertise with franchising, gifting and e-commerce.\"I believe this is truly a historic partnership for the company,\" said Bryan Merryman, CEO and Chairman of the Board of Rocky Mountain. \"As we have explored various strategic alternatives throughout this year, one of our main objectives was to drive incremental demand for our factory in Durango, Colorado. Currently, the factory operates below 50% capacity. With the strategic alliance with Edible, we have the opportunity to not only significantly increase factory sales of o...