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Note 4 - Line Of Credit And Long-term Debt
12 Months Ended
Feb. 28, 2013
Debt Disclosure [Text Block]
NOTE 4 - LINE OF CREDIT AND LONG-TERM DEBT

Line of Credit

At February 28, 2013, the Company had a $5 million line of credit from a bank, collateralized by substantially all of the Company’s assets with the exception of the Company’s retail store assets. Draws may be made under the line at 75% of eligible accounts receivable plus 50% of eligible inventories. Interest on borrowings is at prime less 50 basis points or at 5.0%, whichever is greater (5.0% at February 28, 2013). At February 28, 2013, $5 million was available for borrowings under the line of credit, subject to borrowing base limitations. Terms of the line require that the line be rested (that is, that there be no outstanding balance) for a period of 30 consecutive days during the term of the loan. Additionally, the line of credit is subject to various financial ratio and leverage covenants. At February 28, 2013 the Company was in compliance with all such covenants. The credit line is subject to renewal in July 2013 and we believe it is likely to be renewed at terms similar to current terms.

In November 2012, Aspen Leaf Yogurt executed a promissory note for $2.5 million in order to establish a line of credit for the funding of the potential expansion of Company-owned Aspen Leaf Yogurt locations.  The line of credit was guaranteed by Rocky Mountain Chocolate Factory, Inc. At the request of the Company, upon the sale of substantially all assets of Aspen Leaf Yogurt, this promissory note was cancelled and no amount is outstanding at February 28, 2013.