Potbell today announced that it has entered into a definitive securities purchase agreement with existing and new investors to raise approximately $16 million. The closing is anticipated to occur on February 12, subject to customary closing conditions.    

Potbelly also announced that it has reached an agreement in principle with its lender, JP Morgan, to amend its existing senior secured revolving credit facility. Upon execution of the amendment, Potbelly is expected to have a senior secured revolving credit facility of $25 million that matures on January 31, 2023.  

Bob Wright, President and Chief Executive Officer of Potbelly comments, “Today is great day for Potbelly as we enhance our ability to achieve ‘Traffic-Driven Profitability’ through the five strategic pillars that are the core to the company’s growth. These include: 1) Craveable, Quality Food at a Great Value, 2) People Creating Good Vibes, 3) Customer Experiences that Drive Traffic Growth, 4) Digitally-Driven Awareness, Connection and Traffic, and 5) Franchise-Focused Development. As 2021 progresses, we expect to see our customers increasingly enjoy Potbelly’s offerings as the pace of COVID-19 vaccinations and dining-room re-openings accelerate across our markets. Thus, the proceeds from today’s offering and the revised credit facility will help bolster our balance sheet and provide the necessary capital to both boost the brand and invest in our future as we return to growth.”

The private placement offering consists of 3,249,688 shares of common stock and warrants to purchase up to 1,299,867 shares of common stock. Potbelly expects to receive gross proceeds of approximately $16 million from the Offering before deducting estimated offering expenses and placement agent fees, based on an offering price of $4.91 per share. The warrants will have an exercise price of $5.45 per share and will be exercisable for five years beginning on August 13, 2021. Subscribers to the Offering include new investors in the Company and certain current Potbelly institutional investors. The Company intends to use the net proceeds of the offering for working capital and other general corporate purposes.  

None of the Common Stock, the Warrants or the shares of common stock issuable upon exercise of the warrants  have been registered under the Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Potbelly has agreed to file a resale registration statement with the Securities and Exchange Commission for purposes of registering the resale of the Common Stock and Warrant Shares within 30 days following the closing of the Offering.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.  

William Blair & Company is acting as the sole placement agent for the Offering.

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