Cosi Inc (NASDAQ:COSI) has received a notice from the Listing Qualifications Department, at NASDAQ, stating that the stock would be delisted from the exchange. The company noted that the delisting was in accordance with the bylaws of the exchange, since there is a pending chapter 11 case against it. A statement from COSI stated that it does not plan to appeal against the decision, which is due to go into effect on October 10, 2016.
The statement also stated that it might continue trading on the OTC market, under PINKSHEETS, provided that it is eligible to do so. It should be noted here that SEC laws require that a security must have a market maker sponsor, to be listed on the OTC. Cosi has claimed that there can be no assurance that a market maker would sponsor its stock, once it has been de-listed. The statement from the company also warned its shareholders that trading of its stock, while the chapter 11 case is pending, would be highly speculative and would carry substantial risks.
Cosi Inc and its subsidiaries voluntarily filed for Chapter 11, claiming that it wanted to preserve its value and accommodate a going concern sale of its business operations. The filing was made on September 28, after the company obtained $4 million worth financing, as post-petition-debtor in possession. The company stated that this was enough liquidity to help it continue operations, while it restructures under chapter 11. Under the agreement, the DIP lenders have agreed to purchase all assets of the company. The management believes that the move would result in a stronger balance sheet for the company.
On September 30, COSI announced that it appointed Randy Kominsky, as the Chief Restructuring Officer, effective from October 4, 2016. Mr. Kominsky is a part of the Alliance For Financial Growth and has over 25-years of experience helping companies and creditors, with their chapter 11 processes. He has been president of the alliance, since 1996 and has since held several leadership positions at different companies. Mr. Kominsky would report to Cosi Inc (NASDAQ:COSI)’s interim CEO, Patrick Bennet, once the Bankruptcy Court has approved the plan for restructuring.
