Note 13 - Commitments and Contingencies

6 Months Ended

Aug. 31, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

13

– COMMITMENTS AND CONTINGENCIES

Purchase contracts

The Company frequently enters into purchase contracts of between

six

to

eighteen

months for chocolate and certain nuts. These contracts permit the Company to purchase the specified commodity at a fixed price on an as-needed basis during the term of the contract. Because prices for these products

may

fluctuate, the Company

may

benefit if prices rise during the terms of these contracts, but it

may

be required to pay above-market prices if prices fall and it is unable to renegotiate the terms of the contract. As of

August 31, 2020,

the Company was contracted for approximately

$100,000

of raw materials under such agreements. The Company has designated these contracts as normal under the normal purchase and sale exception under the accounting standards for derivatives. These contracts are

not

entered into for speculative purposes.

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND SUBSIDIARIES

NOTES TO INTERIM (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS