Investor increases stake in Grill Concepts

WOODLAND HILLS Calif. Grill Concepts Inc. completed a $5 million private placement, the proceeds of which were earmarked for working capital needs and expansion of the company’s Daily Grill, The Grill on the Alley, and the fast-casual In Short Order concepts, the company said last week.

The deal, which included an offering of convertible preferred stock and warrants, was struck with Charles Mathewson, as trustee of the Charles N. Mathewson Trust, who was described by Grill Concepts officials as “a longtime friend and investor” of the company.

Grill Concepts “has made great strides successfully executing an accelerated expansion strategy that was initiated over two years ago,” said Philip Gay, president and chief executive officer. “This capital infusion ensures our ongoing progress.”

The company has said it would open five restaurants this year in areas including Boston; Tulsa, Okla.; Thousand Oaks, Calif.; and Miami-Dade County, Fla.

In the private offering, Grill Concepts sold 5,000 shares of convertible preferred stock, with each share convertible into 250 shares of common stock, or 1.25 million shares in total. The conversion price was $4.00 per share. The transaction also included warrants to purchase up to 600,000 additional common shares, also at $4.00 per share. The warrants are exercisable for seven years, according to the company’s statement.

Grill Concepts has about 8.8 million shares outstanding, and its stock price has fluctuated between $2.02 per share and $7.00 per share during the past 52 weeks.

The company operates 31 restaurants, including five The Grill on the Alley locations, 25 casual-dining Daily Grill restaurants, and one unit of In Short Order.