Jamba, Inc. (NASDAQ: JMBA; NASDAQ:JMBAU; NASDAQ:JMBAW) today announced that it has entered into an agreement for the sale of $35.0 million in convertible preferred stock. The funding was led by a $19.55 million investment by Mistral Equity Partners, a private equity firm, with the remaining $15.45 million investment made by a company controlled by the Serruya family, a successful entrepreneurial Canadian-based family.MO< Upon completion, the proceeds from the stock sale will be used to repay the company's senior term note and to provide additional working capital as the company executes its BLEND plan (Building a Customer First Service Culture, Building a Food Capability, Licensing and Consumer Products Platform, Improvement in our Expense Structure and Accelerating Franchising and Non-Traditional Store Development).
"We are pleased to announce this financing which will provide us greater financial flexibility to execute our BLEND plan, which was launched in January and serves as the blueprint for our strategic priorities," says James D. White, President and CEO of Jamba, Inc. "We have made significant progress in delivering on several of the plan's key elements, including new licensing alliances, ongoing collaboration with Nestlé, an expanded refranchising initiative, and an improved cost structure and disciplined expense management. This financing will play a key role in helping us to achieve our long term strategic objectives."
The convertible preferred stock matures in June 2016 unless converted earlier and includes an 8% annual dividend. The preferred stock is convertible into common shares at a price of $1.15 per share. Mistral Equity Partners and the Serruya family also have the right to appoint three members to Jamba's board of directors. Please refer to the Company's Form 8-K to be filed with the Securities and Exchange Commission for the complete terms of the convertible preferred stock.