Note 5 - Commitments and Contingencies

12 Months Ended

Feb. 28, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Operating leases

The Company conducts its retail operations in facilities leased under five to ten-year non-cancelable operating leases. Certain leases contain renewal options for between five and ten additional years at increased monthly rentals. The majority of the leases provide for contingent rentals based on sales in excess of predetermined base levels.

The following is a schedule by year of future minimum rental payments required under such leases for the years ending February 28 or 29:

2015	$	851,000
2016		584,000
2017		359,000
2018		310,000
2019		242,000
Thereafter		52,000
Total	$	2,398,000

In some instances the Company has leased space for its Company-owned locations that are now occupied by franchisees, or majority owned subsidiaries. When the Company-owned location was sold or transferred, the store was subleased to the franchisee who is responsible for the monthly rent and other obligations under the lease. The Company's liability as primary lessee on sublet franchise outlets, all of which is offset by sublease rentals, is as follows for the years ending February 28 or 29:

2015	$	468,000
2016		373,000
2017		192,000
2018		79,000
Total	$	1,112,000

The following is a schedule of lease expense for all retail operating leases for the three years ended February 28 or 29:

	2014			2013			2012
Minimum rentals	$	1,658,710		$	862,866		$	834,087
Less sublease rentals		(686,000	)		(157,000	)		(125,300	)
Contingent rentals		22,626			20,399			17,692
	$	995,336		$	726,265		$	726,479

In FY 2013, the Company renewed an operating lease for warehouse space in the immediate vicinity of its manufacturing operation. The following is a schedule, by year, of future minimum rental payments required under such lease for the years ending February 28 or 29:

2015	$	113,000
2016		116,000
2017		121,000
2018		30,000
Total	$	380,000

The Company also leases trucking equipment under operating leases. The following is a schedule by year of future minimum rental payments required under such leases for the years ending February 28 or 29:

2015	$	183,500
2016	$	145,400
2017	$	145,400
2018	$	96,900
Total	$	571,200

The following is a schedule of lease expense for trucking equipment operating leases for the three years ended February 28 or 29:

2014		2013		2012
	199,894		201,081		200,826

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. Currently the Company has contracted for approximately $567,000 of raw materials under such agreements.

Contingencies

The Company is party to various legal proceedings arising in the ordinary course of business. Management believes that the resolution of these matters will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

Resulting from the purchase of the franchise rights of Yogurtini, the Company may pay up to an additional aggregate amount of $928,000, which is contingent on financial performance of the franchise rights over a two-year period. Resulting from the purchase of the franchise rights of Fuzzy Peach, the Company may pay up to an additional aggregate amount of $349,000 which is contingent on financial performance of the franchise rights over 12 months.

Our Subsidiary, U-Swirl, as part of the business acquisition of CherryBerry agreed to issue 4,000,000 shares of U-Swirl common stock as a component of the consideration paid for the business assets. Associated with these shares, U-Swirl guaranteed a per share value of $0.50, subject to restrictions on the sale of the shares. This guaranteed value of the shares may result in the need for an additional payment of up to $2,000,000 based on the value of U-Swirl stock price.