Bradley L. Radoff Expresses Concern Over Recent Insider Transactions by Chair Jeffrey Geygan and Other Directors of Rocky Mountain Chocolate Factory

November 08, 2022 at 08:00 AM EST

Spotlights Insider Stock Purchases in the Days and Weeks Ahead of the Disclosed Termination of the Company’s Material Agreements with Edible Arrangements

Urges Board to Establish a Special Committee to Investigate Whether Chair Geygan, CEO Robert Sarlls and Directors Mark Riegel and Brett Seabert Violated the Company’s Insider Trading Policy

Bradley L. Radoff, who owns approximately 9.9% of the outstanding shares of Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF) ("Rocky Mountain" or the "Company") and is the Company’s largest stockholder, today issued the following statement regarding recent questionable stock purchases by Chair Jeffrey Geygan and certain other members of the Company’s Board of Directors (the “Board”):

“I find it extremely concerning that Chair Geygan and his affiliates were buying stock in between when Rocky Mountain privately terminated its exclusive supplier and ecommerce licensing agreements with Edible Arrangements, LLC (“Edible Arrangements”) on November 1, 2022 and when the Company eventually publicly disclosed the termination via an 8-K after 5:00 PM Eastern on November 3, 2022.

According to a 13D/A filed by Chair Geygan’s investment entity on November 4^th, he and his affiliates bought more than 10,000 shares of the Company’s common stock on November 2^nd – a date on which the market was unaware of the material termination notice sent to Edible Arrangements.

I also find it concerning that Chair Geygan (through his entity) and Board members Mark Riegel, Robert Sarlls (who is Chief Executive Officer) and Brett Seabert were buying stock during the second half of October, which is a time I presume the Board was considering the termination of the material relationship with Edible Arrangements. It is important to highlight that Rocky Mountain’s own insider trading policy within its Code of Conduct states that ‘[i]f an employee, officer or director is in possession of material inside information that the Company has not yet disclosed to the public, he or she generally may not purchase or sell any of the securities of the Company or ‘tip’ others to trade in Company stock.’¹

In my view, these transactions raise serious questions that must be answered. I believe a special committee comprised of Gabriel Arreaga and Sandra Elizabeth Taylor – the only directors not to have engaged in any recent insider transactions – should retain independent counsel to investigate these seemingly concerning developments.”

___________________________

¹ https://d1io3yog0oux5.cloudfront.net/_32b98d431a6371a05e52fa3253e83f31/rmcf/db/2234/20677/file/Code_of_Conduct_6-04.pdf