The Right Start Prepares for Rights Offering

The board of directors for The Right Start has set March 8 as the record date to determine stockholders entitled to participate in the company’s proposed rights offering.

Holders of record will be entitled to receive one right for each share of common stock held on the record date, and each right will entitle the holder to purchase 0.25 shares of common stock. Upon exercise of the rights, holders will be entitled to purchase common stock at $3.17 per share.

It is estimated that the gross proceeds to the company will be $5 million if all the underlying shares of common stock are purchased. The company intends to use the proceeds to fund retail expansion and for general corporate purposes.

The company reported a significant loss for the third fiscal quarter, which ended March 2. The figures were blamed on operating losses for the Right Start Catalog and severance costs related to the resignation of the company’s former chief executive officer.

The company expects to incur losses through at least the fiscal year ending June 1.