EDiets.com Inc., an online retailer of diet plans and meal-delivery services, says it has sold 5.275 million shares to select investors for a discounted price of $1 per share. The company’s shares were trading at $1.30 before the market opened.
eDiets.com, No. 322 in the Internet Retailer Top 500 Guide, says it expects to generate proceeds of about $4.7 million from the sale after deducting for fees and other expenses. The company plans to use that money to fund future growth, such as expanding advertising of its meal delivery service.
EDiets says it will raise an additional $1 million by issuing $500,000 of shares to its executives and directors, according to a filing with the U.S. Securities and Exchange Commission.
"This financing strengthened our balance sheet and will enable us to make strategic investments in our business in 2010,” says Kevin McGrath, eDiets.com president and CEO. “Along with the various restructuring efforts we completed in 2009, we believe our improved balance sheet leaves us well positioned to generate improved results in coming quarters as we focus our resources on achieving profitability."
For the fiscal year ended Dec. 31, eDiets recorded a $12.1 million net loss.