Concerned Shareholders of Rocky Mountain Comment on Dubiously Timed Board Decision to Rescind Poison Pill on Eve of Annual Meeting

AB Value Management LLC (collectively with its affiliates, “AB Value”), and the other participants in this solicitation (collectively with AB Value, the “Concerned Shareholders of Rocky Mountain”) representing approximately 14.70% of the outstanding shares of Rocky Mountain Chocolate Factory, Inc. (the “Company”), today commented on the Company’s desperate last-minute rescindment of its poison pill (which originated in the 1990s),¹ merely four days before the Company’s 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”) scheduled for October 6, 2021.

“Although we welcome the termination of such a shareholder-unfriendly device, this decision by the Company’s Board of Directors (the “Board”) deserves no applause. AB Value has been urging the Board to redeem the pill since its first proxy contest against the Company nearly 2.5 years ago. Only after unrelenting pressure from us and the proxy advisory firms, the Board rescinded the poison pill,” commented Andrew T. Berger, Managing Member of AB Value.

The Concerned Shareholders of Rocky Mountain note that until now, the Board had consistently decided to keep this poison pill on its books every day for the past 22+ years. With the contested election at the 2021 Annual Meeting looming, the Concerned Shareholders of Rocky Mountain do not believe the Board’s sudden, convenient change of heart to be an authentic demonstration of proper corporate governance. This timing suggests that certain incumbent Board members have shown once and for all that their priority is self-preservation over, and at the expense of, maximizing shareholder value.

The Concerned Shareholders of Rocky Mountain also noticed that the Company’s furtive Saturday night announcement noticeably lacked any commitment from the Board preventing it from unilaterally adopting another unjustifiable long-term pill following the 2021 Annual Meeting. To avoid such a disingenuous maneuver, the Concerned Shareholders of Rocky Mountain intend to bring their proposal to request that the Board redeem any poison pill previously issued and not adopt or extend any poison pill, unless submitted to a shareholder vote within 12 months of such adoption (such proposal, the “Poison Pill Redemption Proposal”) at the 2021 Annual Meeting. No such policy has been adopted by the Company. Prior to rescinding the poison pill Saturday evening, the Board had refused to even acknowledge the Concerned Shareholders of Rocky Mountain’s Poison Pill Redemption Proposal in the Company’s proxy statement. To date, the Board has not taken a position on the Poison Pill Redemption Proposal, yet has refused to allow shareholders to vote on the proposal using the Company’s proxy card.