Cache says Margolis to invest $1M in conjunction with Rights Offering

In conjunction with joining the company Margolis will invest $1M in newly issued shares of Cache in connection with the $8.0M Rights Offering announced by the company, subject to shareholder approval. The proceeds of the Rights Offering will be used to provide enhanced liquidity to Cache, the company said. In connection with the Rights Offering, the company announced that it entered into an Investment Agreement with Margolis and two of the company’s shareholders, MFP Partners and Mill Road Capital, under which they have each agreed to backstop the Rights Offering on the terms and subject to the conditions contained in that agreement. The Rights Offering will provide the opportunity for all Cache shareholders to invest at the same price as Margolis, MFP Partners and Mill Road. Pursuant to the Rights Offering, each Cache shareholder will be issued transferable rights that will enable the holder to purchase, at $1.65 per share, one share of Common Stock for each whole right. Holders of rights who fully exercise all of their rights will also be entitled, to the extent the Rights Offering is not fully subscribed, to purchase additional shares of Common Stock for $1.65 per share up to the number of shares purchased under the holder’s basic subscription privilege. Under the Backstop and Investment Agreement, MFP Partners and Mill Road have each agreed to purchase a number of shares equal to their pro rata portion of the shares offered in the Rights Offering, and, together with Margolis, they have each agreed to backstop the Rights Offering such that Cache will receive the full $8M. Pursuant to the Backstop and Investment Agreement, Margolis and Mill Road have been granted the right to purchase additional shares of Common Stock from the Company for $1.65 per share in an amount sufficient to enable them to acquire $1.0M and $3.5M of Common Stock, respectively, to the extent that they are not able to acquire those amounts through the Rights Offering and the backstop. The company expects to commence the Rights Offering as soon as practicable, and has not yet determined the record date, anticipated issuance date, or expiration date in respect of the Rights Offering. The company also announced that it entered into a Voting Agreement with MFP Partners and Mill Road providing that Michael Price and an independent individual designated by Mill Road will be appointed to serve as directors of the company on the day prior to the shareholders meeting to vote on the issuance of shares in the Rights Offering and under the Backstop and Investment Agreement.