WET SEAL INC The Wet Seal, Inc. (Nasdaq: WTSL), a leading specialty retailer to young women, today announced that it has entered into a securities purchase agreement to sell shares of its Class A common stock to a limited number of institutional investors in a private placement. Subject to the terms of the placement, the Company expects to receive at the closing gross proceeds from the placement of approximately $18.5 million.
Investors in the private placement have agreed to purchase shares of Class A common stock at a per share price equal to the lesser of $1.01, 87.5% of the volume weighted-average price for the 20 consecutive trading day period prior to when the price is set, or if the Company commences a rights offering to its shareholders at a subscription price which is lower than the foregoing, at such a lesser price. The Company has the right to terminate the anticipated closing of the sale if the volume weighted-average price for its common stock for a 15 consecutive trading day period is below $0.80, subject to investors retaining warrants or receiving a cash payment. Each investor will also receive, at its option, warrants to purchase additional shares of Class A common stock or a discount to the per share purchase price of four percent, but in no event greater than $0.04 per share. The warrants will be exercisable for five years beginning six months and one day from the date of issuance.
Subject to applicable terms and other conditions, the Company currently expects that the private placement will close in the third or fourth fiscal quarter of the current fiscal year. Additional disclosures regarding the terms of the private placement and transaction will be contained in a Current Report on Form 8-K to be filed by the Company with the Securities and Exchange Commission and investors are encouraged to read such report.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any offer, solicitation or sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of the securities under the securities laws of such state or jurisdiction.
The shares and warrants offered in the private placement and the shares issuable upon the exercise of the warrants have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold without being registered with the Securities and Exchange Commission (SEC) or through an applicable exemption from SEC registration requirements. The shares of common stock and warrants were offered only to accredited investors. The Company has agreed to file a registration statement with the SEC with respect to the resale of the common stock to be purchased by the investors, as well as the common stock issuable upon exercise of the warrants. Any offers of the Company's securities under the resale registration statement will be made only by means of a prospectus.
About The Wet Seal, Inc.
The Wet Seal, Inc., a pioneer in fast fashion retailing, sells apparel, footwear and accessories designed for teen girls and young women through retail stores nationwide, as well as two e-commerce websites. The Company operates 531 stores in 47 states and Puerto Rico, www.wetseal.com and www.ardenb.com. For additional corporate information, please visit www.wetsealinc.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements that relate to the anticipated closing of the placement. Such forward-looking statements made by the Company involve risks and uncertainties and are subject to change based on factors beyond the Company's control, including the fact that the closing of the private placement is subject to various conditions, some of which are outside of the company’s control. The can be no assurance that the contemplated sale will close. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
