Needing to raise cash in a hurry, Body Central Corp. on Monday said it is voluntarily delisting its stock from the Nasdaq Stock Market because a new financing plan is not in compliance with listing requirements.
The Jacksonville-based fashion retailer also said in a Securities and Exchange Commission filing that it is overhauling its board of directors in conjunction with the financing.
Body Central, which has been losing money for the past year amid declining sales, said it completed a private placement of $18 million in subordinated convertible notes to unnamed investors that can be converted into shares of common stock.
The company said in a news release that Nasdaq rules would require stockholder approval for the issuance of the notes, but “in order to preserve the financial viability of the company, it was necessary to consummate the transaction before stockholder approval could be obtained.”
The stock will be traded on the OTC bulletin board, the company said, but it did not give a timetable.
Body Central’s stock was trading on Nasdaq Monday after the announcement, which came before the markets opened.
Body Central also said the terms of the private placement gave three investors the ability to elect one director each to its board of directors.
In the SEC filing, it said Erica Niemann, Ari Zweiman and Justin Evans were elected to the board, but it did not give any information on the background of the new board members.
With the three new directors joining the board, the filing said that four directors resigned, including Chairman of the Board Donna Ecton.
The other three directors that resigned were Scott Gallin, David Katz and Robert Glass.
Body Central’s stock, which has been trading near $1 recently, fell 11 cents to 89 cents in trading Monday.
The stock was trading above $30 a little more than two years ago before declining sales started to send the stock plummeting.
Body Central said Monday it will be seeking stockholder approval for a reverse stock split.
That would decrease the number of shares outstanding but raise the trading price of the stock.