SHERMAN OAKS, Calif., Aug. 14, 2017 (GLOBE NEWSWIRE) -- Cherokee, Inc. (NASDAQ:CHKE), a global brand marketing platform that manages a growing portfolio of fashion and lifestyle brands, today announced an amendment of its senior secured credit facility with Cerberus Business Finance, LLC (“Cerberus”). The amended credit agreement addresses all matters that gave rise to the forbearance agreement the Company entered into on June 27, 2017.
In connection with the amendment, on August 11, 2017, the Company and several investors, including certain of the Company’s directors, officers and large stockholders, entered into a common stock purchase agreement. Through the private placement financing, the Company issued an aggregate of 947,870 shares of common stock at a per share purchase price of $4.22, resulting in net proceeds to the Company of approximately $4.0 million. The financing is expected to close on August 18, 2017.
In addition, the Company secured commitments from the investor group for additional financing that if required, will allow the Company to continue to grow its business and execute its long-term strategic plan. The maximum aggregate value of the commitments for the committed financings from all investors is approximately $5.5 million.
“We are pleased to announce our amended facility with Cerberus, and appreciate their continued confidence in Cherokee Global Brands,” commented Henry Stupp, Chief Executive Officer of Cherokee Global Brands. “While the financial integration of the Hi-Tec acquisition was difficult given the complexities of its foreign operations, we have taken the necessary steps to resolve these matters. We look forward to focusing our efforts on the continued growth of all of our brands, particularly our namesake Cherokee brand and the Hi-Tec portfolio. On that front, we continue to make progress, expanding our reach across new categories and geographies, both domestically and abroad.”
For further information, please refer to the Company's Current Report on Form 8-K filed today with the Securities Exchange Commission (the “SEC”).
The Company also anticipates that it will file its form 10-Q for the first quarter ended April 29, 2017, with the SEC by August 18, 2017.
About Cherokee Inc.
Cherokee is a global brand marketing platform that manages a growing portfolio of fashion and lifestyle brands including Cherokee®, Carole Little®, Tony Hawk® Signature Apparel and Hawk Brands®, Liz Lange®, Everyday California®, Sideout®, Hi-Tec®, Magnum®, 50 Peaks®, Interceptor® and Flip Flop Shops®, a leading franchise retail chain, across multiple consumer product categories and retail tiers around the world. The Company currently maintains license and franchise agreements with leading retailers and manufacturers that span over 110 countries in 12,000 retail locations and digital commerce.
Safe Harbor Statement
This news release may contain forward-looking statements regarding future events and the future performance of Cherokee. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances and is based on currently available market, operating, financial and competitive information and assumptions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expected or projected, including, among others, risks that: the Company and its partners will not achieve the results anticipated in the statements made in this release; that the Company’s Quarterly Report on Form 10-Q will not be filed as anticipated and that further delays in such filing could cause the Company’s lenders to exercise their rights under the credit agreements or the Company’s stock to be delisted from Nasdaq; the anticipated benefits of the Hi-Tec acquisition will not be achieved; global economic conditions and the financial condition of the apparel and retail industry and/or adverse changes in licensee or consumer acceptance of products bearing the Company’s brands may lead to reduced royalties; the ability and/or commitment of the Company’s licensees to design, manufacture and market Cherokee®, Hi-Tec®, Magnum®, 50 Peaks®, Interceptor®, Carole Little®, Tony Hawk® and Hawk Brands®, Liz Lange®, Everyday California® and Sideout® branded products could cause our results to differ from our anticipations; the Company’s dependence on a select group of licensees for most of the Company’s revenues makes us susceptible to changes in those organizations; and the Company’s dependence on its key management personnel could leave us exposed to disruption on any termination of service. The risks included here are not exhaustive. Other risks and uncertainties are described in our annual report on Form 10-K filed on May 18, 2017, its periodic reports on Forms 10-Q and 8-K, and subsequent filings with the SEC we make from time to time, including the preliminary prospectus supplement that we filed in connection with the offering described herein. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Cherokee Global Brands
Jason Boling, CFO
Addo Investor Relations
Laura Bainbridge/Patricia Nir