In addition, and importantly, BLUM Growth Fund, along with outside investors, would provide $10 million as a backstop to a rights offering to current shareholders who have expressed a desire to invest more in the Cosi company, subject to and only if, the BLUM Growth Fund proposal is adopted. Otherwise, if the status quo continues, these shareholders have expressed no interest in investing and putting more of their money at risk.
Option #2 is that shareholders' desires are honored by having the Cosi Board of Directors call a special shareholder meeting as soon as possible, with the Board of Directors and BLUM Growth Fund each prepared to live with the results of such meeting. We strongly believe that the fiduciary responsibilities and duties of the Cosi Board of Directors mandates that such a special shareholder meeting be called.
Option #3 would be implemented if the Cosi Board of Directors rejects both Option #1 and Option #2. It would leave shareholders with its final option, which is to exercise their remaining rights. They would take any and all possible actions to achieve a positive result for Cosi to protect the investments of current shareholders and to create shareholder value.
“The Board of Directors has failed at every turn, managing to drive the Cosi stock price down until it is almost valueless, despite its position in the highest growth segment in the restaurant industry, where brands like Chipotle and Panera have achieved stock price growth of approximately +700% and +300%, respectively in the past three years,” said Brad Blum, owner of BLUM Growth Fund. “Shareholders have thrown down the gauntlet and challenged the Board of Directors’ failed actions and limited abilities and have made it clear, they will not support further destruction of Cosi.”In summary Blum added, "This whole matter is about one, and only one, thing: RESULTS. The Cosi Board of Directors now has an opportunity to do something good for the company they represent. The ball is in their court."