US-based sandwich chain Potbelly Sandwich Shop has signed a definitive securities purchase agreement with its existing and new investors to raise approximately $16m.
The private placement offering involves 3,249,688 shares of common stock and warrants to acquire up to 1,299,867 shares of common stock. The offering is priced at $4.91 per share.
Additionally, the chain entered an agreement in principle with its lender, JP Morgan, to amend its current senior secured revolving credit facility.
Following the amendment, Potbelly is expected to have a senior secured revolving credit facility of $25m that will mature on 31 January 2023.
The company expects to use the proceeds from the financing and the revised credit facility to improve its balance sheet and offer the necessary capital to boost the brand and invest in growth.
Potbelly president and CEO Bob Wright said that the chain is looking to boost its ability to achieve ‘Traffic-Driven Profitability’ through five strategic pillars.
The pillars are ‘craveable’, quality food at a great value; people creating good vibes; customer experiences that drive traffic growth; digitally-driven awareness, connection and traffic; as well as franchise-focused development.
Wright added: “As 2021 progresses, we expect to see our customers increasingly enjoy Potbelly’s offerings as the pace of Covid-19 vaccinations and dining-room reopenings accelerate across our markets.”
The Potbelly menu includes sandwiches, signature salads, hand-dipped shakes, and other fresh menu items.
The chain currently has more than 400 company-owned shops in the US, in addition to 40 shops operated by its franchisees.