DEERFIELD Ill. Cosi Inc., parent of the 144-unit fast-casual chain, filed a registration statement with federal securities regulators for a rights offering to its existing stockholders that could garner the company $5 million.
The company plans to make the offering through a distribution of subscription rights to purchase shares of Cosi’s common stock at an as yet undetermined price, the company said this week. The offering is subject to an ownership limitation of 19.9 percent of Cosi’s common stock. In conjunction with the offering to shareholders, all of Cosi’s executive officers and outside directors have agreed to purchase shares at the same price offered to shareholders that would total a commitment of $478,712.
Cosi holds about 40.5 million shares outstanding and a market capitalization of about $24.5 million. It has traded between 15 cents per share and $2.06 per share during the past 52 weeks.
“As we continue to navigate through these uncertain economic times, we feel it is important to shore up our capital and liquidity,” said Jim Hyatt, Cosi’s chief executive. “We intend to use the bulk of the proceeds from this offering for that purpose, although we may also use the proceeds for general corporate purposes as we see fit in this environment, including marketing initiatives intended to increase traffic in our stores and funding the costs associated with closing underperforming stores.”
Deerfield, Ill.-based Cosi has suffered from a sales slowdown during the recession, as both customer counts and business catering volumes have deteriorated. During its latest quarter, the company was able to narrow its net loss, but reported a same-store sales decline of 12.2 percent.
In mid-September, the company said it received a notice of possible delisting from the Nasdaq Stock Market because its stock price had not maintained a minimum of $1.00 per share that is required to trade on the exchange. Cosi has until March 15, 2010, to regain compliance, which will require a minimum bid closing share price of at least $1.00 for a minimum of 10 consecutive business days.
Contact Sarah E. Lockyer at [email protected].
