Crumbs Bake Shop, Inc. Sells $7 Million in Aggregate Principal Amount of Notes
NEW YORK--(BUSINESS WIRE)--
Crumbs Bake Shop, Inc. ("Crumbs") (NASDAQ: CRMB), the largest cupcake
specialty store chain in the U.S., today announced that it has closed on
the sale of $7 Million in aggregate principal amount of its senior
unsecured convertible promissory notes (the "Notes") pursuant to the
terms of a Securities Purchase Agreement with Michael Serruya (the
"Purchase Agreement") relating to the sale of up to $10.0 million in
aggregate principal amount of its Notes to accredited investors.
Company Closing on Sale of $7 Million in Aggregate Principal Amount
of its Notes
On May 10, 2013, the Company closed on the sale of $7.0 Million in
aggregate principal amount of its Notes issued to each of Front Street
Tactical Equity Class; Front Street Canadian Hedge Fund; Front Street
Global Opportunities Class; Front Street Growth and Income Class; IA
Clarington Global Income Fund; Redwood Income Strategies Class; Aston
Hill Growth and Income Fund; Aston Hill Capital Growth Fund; Aston Hill
Opportunities Fund; Kitchener Investment Corp.; and York Plains
Investment Corp. Mr. Serruya assigned his purchase rights under the
Purchase Agreement to these Canadian funds and corporations pursuant to
an Accession Agreement, dated May 10, 2013, by and among the Company,
Mr. Serruya and the investors.
After paying a $200,000 corporate finance fee and reimbursing the
investors for $87,500 in legal fees and expenses, the Company received
$6,712,500 in proceeds. From this amount, the Company is obligated to
pay a fee to its placement agent in connection with the transactions
contemplated by the Purchase Agreement in an amount equal to 7.0% of the
gross proceeds raised by the Company, less the $200,000 corporate
finance fee.
The Purchase Agreement contemplates that, subject to various closing
conditions contained in the Purchase Agreement, Mr. Serruya and/or his
buyer assignees will purchase an additional $3.0 million in aggregate
principal amount of Notes in a second closing to occur on or before June
9, 2013.
About Crumbs Bake Shop, Inc.
The first Crumbs bake shop opened in March 2003 on the Upper West Side
of Manhattan and is well known for its innovative and oversized gourmet
cupcakes. The Company currently has 70 locations in 12 states and the
District of Columbia.
Forward Looking Statements
Some of the statements in this press release constitute forward-looking
statements within the meaning of the federal securities laws. Words such
as "anticipate," "expect," "project," "intend," "plan," "believe,"
"target," "aim," "will" and words and terms of similar substance and any
financial projections used in connection with any discussion of future
plans, strategies, objectives, actions, or events identify
forward-looking statements. Such statements include, among others, those
concerning our expected financial performance and strategic and
operational plans, as well as all assumptions, expectations,
predictions, intentions or beliefs about future events. These statements
are based on the beliefs of our management as well as assumptions made
by and information currently available to us and reflect our current
views concerning future events. As such, they are subject to risks and
uncertainties that could cause our results to differ materially from
those expressed or implied by such forward-looking statements. Such
risks and uncertainties include, among many others: the risk that the
pending sale of Notes may not be consummated because the conditions to
such closing cannot be satisfied; the risk that the businesses of Crumbs
Bake Shop, Inc. and Crumbs Holdings LLC and its wholly-owned
subsidiaries will not be integrated successfully; the risk that any
projections, including earnings, revenues, expenses, synergies, margins
or any other financial items that form the basis for management's plans
and assumptions are not realized; the risk of disruption from being a
public company, making it more difficult to maintain relationships with
customers, employees or suppliers; a reduction in industry profit
margin; the inability to continue the development of the Crumbs brand;
the timing of and ability to achieve profitability of new stores; the
inability to manage or fund rapid growth; requirements or changes
affecting the business in which Crumbs Bake Shop, Inc. and Crumbs
Holdings LLC and its wholly-owned subsidiaries are engaged; our ability
to successfully implement new strategies; operating hazards; and
competition and the loss of key personnel; changing interpretations of
generally accepted accounting principles; continued compliance with
government regulations; changing legislation and regulatory
environments; the ability to meet the NASDAQ Stock Market's continued
listing standards; a lower return on investment; and the general
volatility of the market prices of our securities and general economic
conditions. These and other risks are discussed in detail in the
periodic reports that Crumbs Bake Shop, Inc. files with the Securities
and Exchange Commission (the "SEC"), including in the "Risk Factors"
section of its Annual Report on Form 10-K for the year ended December
31, 2012, and investors are urged to review those periodic reports and
its other filings with the SEC, which are accessible on the SEC's
website at www.sec.gov,
before making an investment decision. Crumbs Bake Shop, Inc.'s
forward-looking statements may also be subject to other risks and
uncertainties, including those that it may discuss elsewhere in this
news release or in its filings with the SEC. We assume no obligation to
update these forward-looking statements except as required by law.
Investor Relations Contact:
Tom Ryan/Raphael Gross of ICR
IR@crumbs.com
/ 646-478-9917
or
Media Relations Contact:
Quinn
Solomon of Crumbs
qsolomon@crumbs.com
/ 212-221-7105
Source: Crumbs Bake Shop, Inc.
News Provided by Acquire Media
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