As filed with the Securities and Exchange Commission
on December 19, 2024
Registration No. 333-282664
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT
OF 1933
THE CHILDREN’S
PLACE, INC.
(Exact Name of Registrant
as Specified in Its Charter)
| Delaware |
31-1241495 |
(State
or Other Jurisdiction of
Incorporation or Organization) |
(I.R.S.
Employer
Identification Number) |
500 Plaza Drive
Secaucus, New Jersey
07094
(201) 558-2400
(Address, Including
Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Jared E. Shure
Chief Administrative
Officer, General Counsel and Corporate Secretary
The Children's Place, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
(201) 558-2400
(Name, Address, Including
Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Cadwalader, Wickersham &
Taft LLP
200 Liberty Street
New York, NY 10281
212-504-6000
Approximate
date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on
this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended
(the “Securities Act”), check the following box. x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “accelerated filer,” “large accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| |
Large accelerated filer |
|
¨ |
Accelerated filer |
x |
|
| |
Non-accelerated filer |
|
¨ |
Smaller reporting company |
¨ |
|
| |
|
|
|
Emerging growth company |
¨ |
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
The registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. These securities may not be distributed until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY
Prospectus Dated december 19, 2024
THE CHILDREN’S PLACE, INC.
Non-Transferable
Subscription Rights to Purchase Up to $90,000,000 in
Shares of Common Stock, representing 9,230,769 Shares of Common Stock in the Aggregate
The Children’s Place, Inc.
(“The Children’s Place”, the “Company”, “we”, “us”
or “our”) is distributing at no charge to the holders of our common stock, par value $0.10 per share (the “Common
Stock”), on a pro rata basis, non-transferable subscription rights to purchase up to an aggregate of 9,230,769 shares
of our Common Stock at a subscription price of $9.75 per whole share, payable by each rights holder (i) in cash, (ii) by delivery
in lieu of cash of an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by
the Company to such rights holder, or (iii) by delivery of a combination of cash and such indebtedness. We refer to this offering
as the “Rights Offering”. We are offering to each of our stockholders one non-transferable subscription right for
each full share of Common Stock owned by that stockholder as of the close of business on December 13, 2024, the record date (the
“Record Date”). Each subscription right will entitle its holder to purchase 0.7220 shares of our Common Stock. Additionally,
rights holders who fully exercise their basic subscription rights will be entitled to subscribe for additional shares of our Common Stock
that remain unsubscribed as a result of any unexercised basic subscription rights (the “over-subscription privilege”).
The over-subscription privilege allows a rights holder to subscribe for additional shares of our Common Stock at the subscription price
of $9.75 per whole share. We refer to the basic subscription rights and over-subscription privilege as “rights” or “subscription
rights”.
The
total subscription price of shares of Common Stock offered in this Rights Offering will be $90.0 million, assuming all rights are exercised.
To the extent you properly exercise your over-subscription privilege for an amount of shares of Common Stock that exceeds the number
of the unsubscribed shares of Common Stock available to you, the subscription agent for this Rights Offering, Equiniti Trust Company,
LLC (the “Subscription Agent”), will return to you any excess subscription payments, in the manner and form in which
such payments were made, without interest or penalty, as soon as practicable following the Expiration Date and Time (as defined below),
and after all necessary calculations, pro rata allocations and adjustments
have been completed. We are not requiring a minimum individual or overall subscription to complete the Rights Offering. The Subscription
Agent will hold all funds received from subscribing stockholders in a segregated account (or, with respect to any evidence of indebtedness
for borrowed money received from subscribing stockholders, in escrow) until we issue your shares of our Common Stock to you upon consummation
of the Rights Offering or the withdrawal or termination of the Rights Offering. Subscription rights may only be exercised in aggregate
for whole numbers of our Common Stock; fractional shares of Common Stock or cash in lieu of fractional shares of Common Stock will
not be issued in the Rights Offering. Any fractional shares of Common Stock resulting from the exercise of the basic subscription rights
will be eliminated by rounding down to the nearest whole share of Common Stock.
The
subscription rights may be exercised at any time during the Rights Offering subscription period (the “Subscription Period”),
which will commence on December 24, 2024, and will expire at 5:00 p.m., New York City time, on January 24, 2025 (the “Expiration
Date and Time”). We may, in our sole discretion, extend the Subscription Period. We will extend the duration of the Rights
Offering as required by applicable law, and we may choose to extend it if we decide that changes in the market price of our Common Stock
warrant an extension or if we decide to give you more time to exercise your subscription rights in this Rights Offering. Once you have
exercised your subscription right, your exercise may not be revoked. The rights are non-transferable. The subscription rights that are
not exercised by the Expiration Date and Time will expire and will have no value. You should carefully consider whether or not to exercise
your subscription rights before the Expiration Date and Time. If you are a beneficial owner of shares of Common Stock registered
in the name of a broker, dealer, custodian bank, or other nominee, your nominee may establish an earlier deadline before the
Expiration Date and Time by which time you must provide the nominee with your instructions and deliver all documents and payments to
exercise your subscription rights.
See “The Rights
Offering” for additional information.
The
Rights Offering is being made in connection with the Letter Agreement between the Company and Mithaq Capital SPC, a Cayman segregated
portfolio company (“Mithaq”) entered into on February 29, 2024 (the “Letter Agreement”).
Our largest stockholder,
Mithaq, has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights distributed
to it and its subsidiary, Snowball Compounding Ltd. (“Snowball”), by the Company in the Rights Offering, as well as
the over-subscription privilege, and that it currently intends, but undertakes no obligation, to pay some or all of the subscription
price payable upon the exercise of any such subscription rights directly held by Mithaq with indebtedness for borrowed money owed by
the Company to Mithaq (including any indebtedness then-outstanding pursuant to Mithaq Term Loans (as defined below)). Our directors and
executive officers who own shares of Common Stock are permitted, but not required, to participate in the Rights Offering on the same
terms and conditions applicable to all holders of subscription rights. See “The Rights Offering – Participation of Our
Directors, Executive Officers and Significant Stockholders” and “Risk Factors – Risks Related to Our Stock and
Stock Price – We have a controlling stockholder who, following the Rights Offering, may continue owning a majority of our outstanding
shares of common stock, and as a result controls all matters requiring shareholder approval.”
Our Common Stock is listed
on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “PLCE”. On December 18, 2024, the
closing price of our Common Stock as reported by Nasdaq was $10.77 per share.
The subscription rights
are non-transferable, except that they will be transferable by operation of law. The subscription rights will not be listed for trading
on Nasdaq or any other stock exchange or market.
| | |
Per
Share of
Common
Stock | | |
Aggregate | |
| Subscription Price | |
$ | 9.75 | | |
$ | 90,000,000 | |
| Proceeds to The Children’s Place, before expenses | |
$ | 9.75 | | |
$ | 90,000,000 | (1) |
(1) Assumes
that the Rights Offering is fully subscribed and that the subscription price for all shares of Common Stock subscribed for is paid in
cash. To the extent that the subscription price for any shares of Common Stock subscribed for is paid for by the delivery of indebtedness
for borrowed money, such delivery would have the result of reducing the Company’s outstanding indebtedness for borrowed money but
would not result in cash proceeds to the Company.
Exercising
the subscription rights and investing in our Common Stock involves significant
risks. We urge you to read carefully the entirety of this prospectus, including the section titled “Risk Factors”
beginning on page 11 of this prospectus, the section titled “Risk Factors” of the Company’s Annual
Report on Form 10-K filed on May 6, 2024 (the “Form 10-K”) and in our Quarterly Reports on
Form 10-Q for the fiscal quarters ended May 4,
2024, August 3,
2024 and November 2,
2024, and all other information included or incorporated by reference in this prospectus before you decide whether to exercise your
rights.
Neither the Securities
and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Equiniti Trust Company, LLC
will serve as the Subscription Agent and transfer agent (the “Transfer Agent”) for the Rights Offering, and D.F. King &
Co., Inc. will serve as the information agent (the “Information Agent”) for the Rights Offering.
Neither we nor our board
of directors (the “Board of Directors”) make any recommendation to holders regarding whether they should exercise
their subscription rights. As a result of the terms of this Rights Offering, stockholders who do not fully exercise their subscription
rights will own, upon completion of this Rights Offering, a smaller proportional interest in our Common Stock than otherwise would be
the case had they fully exercised their rights, including as compared to any stockholders that exercise a greater proportion of their
rights. See “Risk Factors” beginning on page 11 of this registration statement for more information.
If
you have any questions or need further information about this Rights Offering, please call D.F. King & Co., Inc., our Information
Agent for this Rights Offering, at (888) 567-1626. It is anticipated that delivery of the Common Stock purchased in this Rights Offering
will be made on or about January 31, 2025 (assuming all necessary calculations,
pro rata allocations and adjustments have been completed by such date).
The
date of this prospectus is [•], 2024.
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This prospectus is part of
a registration statement that we have filed with the SEC. The exhibits to the registration statement contain the full text of certain
contracts and other important documents we have summarized in this prospectus. Since these summaries may not contain all the information
that you may find important in deciding whether to purchase our Common Stock, you should review the full text of these documents. The
registration statement and the exhibits can be obtained from the SEC as indicated under the section entitled “Where You Can
Find More Information”.
We have not authorized
anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf
of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other
information that others may give you. You should assume that the information appearing in this prospectus is accurate only as of the
date on its cover page. Our business, financial condition, results of operations and prospects may have changed since those dates.
QUESTIONS
AND ANSWERS ABOUT THE RIGHTS OFFERING
The following are examples
of what we anticipate will be common questions about the Rights Offering. The answers are based on selected information included elsewhere
in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not
address all of the questions that you may have about the Rights Offering. You should carefully read this prospectus and the documents
incorporated by reference in this prospectus as they contain more detailed descriptions of the terms and conditions of the Rights Offering
and provide additional information about us and our business, including potential risks related to the Rights Offering. We urge you to
read this entire prospectus, our financial statements and related notes and the other information incorporated by reference herein as
described under the section entitled “Incorporation of Certain Information by Reference”.
| Q: | What
is the Rights Offering? |
| A: | The
Rights Offering is a pro rata distribution at no charge to holders of our Common Stock
of non-transferable subscription rights to purchase up to an aggregate of 9,230,769
shares of our Common Stock at a subscription price of $9.75 per whole share. We are offering
to each of our stockholders, either as a holder of record or, in the case of shares held
of record by brokers, dealers, custodian banks or other nominees on your behalf, as a beneficial
owner of those shares, one non-transferable subscription right for each full share of Common
Stock owned by that stockholder as of the close of business on the Record Date. Each subscription
right will entitle its holder to purchase 0.7220 shares of our Common Stock. Each subscription
right contains the basic subscription right and an over-subscription privilege, as described
below. This registration statement is registering both the subscription rights and the shares
of Common Stock that may be issued pursuant to the exercise of subscription rights. |
| Q: | What
is the basic subscription right? |
| A: | The
basic subscription right gives our stockholders the opportunity to purchase 0.7220
shares of Common Stock at a subscription price of $9.75 per whole share. We have granted
to you, as a stockholder of record on the Record Date, one non-transferable subscription
right for every share of our Common Stock you owned at that time. |
We determined the ratio of rights
required to purchase one share of Common Stock by dividing $90.0 million by the subscription price of $9.75 to determine the number of
shares of Common Stock to be issued in the Rights Offering and then dividing the number of shares of Common Stock to be issued in the
Rights Offering by 12,784,972, which was the number of shares of our Common Stock outstanding on the Record Date. Accordingly, each subscription
right allows the holder thereof to subscribe for 0.7220 shares of Common Stock at a subscription price of $9.75 per whole share. As an
example, if you owned 1,000 shares of our Common Stock on the Record Date, you would receive 1,000 subscription rights pursuant to your
basic subscription right that would entitle you to purchase up to 722 shares of Common Stock at a subscription price of $9.75 per whole
share.
You may exercise all or a portion of
your basic subscription right or you may choose not to exercise any subscription rights at all. However, if you exercise less than your
full basic subscription right, you will not be entitled to purchase shares of Common Stock under your over-subscription privilege.
If
you hold your shares in street name through a broker, dealer, custodian bank, or other nominee who uses the services of The Depository
Trust Company (“DTC”), then DTC will issue one non-transferable subscription right to your nominee for every share
of our Common Stock you own on the Record Date. Each subscription right can then be used to purchase 0.7220 shares of Common Stock for
$9.75 per whole share of Common Stock. See “The Rights Offering – Procedures for DTC Participants”. As in the
example above, if you owned 1,000 shares of our Common Stock on the Record Date, your nominee would receive 1,000 subscription rights
and you would have the right to purchase up to 722 shares of Common Stock for $9.75 per whole share.
No fractional shares of Common Stock
will be issued upon the exercise of subscription rights in the Rights Offering. Any fractional shares of Common Stock created by the
exercise of subscription rights will be rounded down to the nearest whole share.
| Q: | What
is the over-subscription privilege? |
| A: | The
over-subscription privilege of each subscription right entitles you, if you fully exercise
your basic subscription right and subject to certain limitations, to subscribe for additional
shares of our Common Stock at the same subscription price per share if any shares are not
purchased by other holders of subscription rights under their basic subscription rights as
of the Expiration Date and Time. No fractional shares will be issued. |
| Q: | What
if there are an insufficient number of shares of Common Stock to satisfy the over-subscription
requests? |
If
there are an insufficient number of shares of our Common Stock available to fully satisfy the over-subscription requests of rights holders,
whether due to all holders exercising their basic subscription rights in full, or due to over-subscription requests exceeding the number
of shares not purchased by other holders of subscription rights under their basic subscription rights, subscription rights holders who
exercised their over-subscription privilege will receive the available shares of Common Stock pro rata based on the number of
shares of Common Stock each subscription rights holder subscribed for under the basic subscription right. “Pro rata”
means in proportion to the number of shares of our Common Stock that you and the other subscription rights holders have purchased by
exercising your basic subscription rights on your Common Stock holdings. Any excess subscription payments will be returned in the manner
and form in which such payments were made, without interest or penalty, as soon as practicable following the Expiration Date and Time,
and after all necessary calculations, pro rata allocations and adjustments
have been completed.
| Q: | Will
fractional shares be issued upon exercise of the subscription rights? |
| A: | No. We
will not issue fractional shares of Common Stock in this Rights Offering. Any fractional
shares of Common Stock created by the exercise of subscription rights will be rounded down
to the nearest whole share. Any excess subscription payments received by the Subscription
Agent will be returned in the manner and form in which such payments were made, without interest
or deduction, as soon as practicable following the Expiration Date and Time, and after
all necessary calculations, pro rata allocations
and adjustments have been completed. |
| Q: | Why
are you engaging in the Rights Offering? |
| A: | On
February 28, 2024, the then-Board of Directors of the Company, none of the members of
which were associated with Mithaq, approved the Letter Agreement, which requires, among other
things, that the Company use reasonable best efforts to prepare, file, and cause to be effective
a registration statement, prospectus and other materials required under applicable law to
permit, and to then commence and complete, a rights offering, as has been previously disclosed
by the Company. In furtherance of the Company’s efforts to comply with such pre-existing
contractual obligation, and following the determination of the disinterested directors on
the Company’s current Board of Directors (the “Disinterested Directors”)
that the Rights Offering is in the best interests of the Company and its stockholders and
would, among other things, provide the Company with an opportunity to raise capital and deleverage
and more generally strengthen its balance sheet, the Disinterested Directors unanimously
approved the Rights Offering. See “Summary – Recent Developments”,
“Use of Proceeds” and “The Rights Offering – Reasons for
the Rights Offering” for additional information. |
| Q: | When
will I receive my rights certificate? |
| A: | Promptly
after the date of this prospectus, the Subscription Agent will send a rights certificate
to each registered holder of our Common Stock as of 5:00 p.m., New York City time, on the
Record Date, based on our stockholder registry maintained at the Transfer Agent for our Common
Stock. If you hold your shares of Common Stock in “street name” through a brokerage
account, dealer, custodian bank, or other nominee, you will not receive a physical rights
certificate. Instead, as described in this prospectus, you must instruct your broker, dealer,
custodian bank, or other nominee whether or not to exercise subscription rights on your behalf.
If you wish to obtain a separate rights certificate, you should promptly contact your broker,
dealer, custodian bank, or other nominee and request a separate rights certificate. It is
not necessary to have a physical rights certificate to elect to exercise your subscription
rights if your shares are held by a broker, dealer, custodian bank, or other nominee. |
| Q: | What
happens if I choose not to exercise my subscription rights? |
| A: | You
will retain your current number of shares of our Common Stock even if you do not exercise
your basic subscription rights. However, if you do not exercise your basic subscription rights,
the percentage of our Common Stock that you own may decrease, and your voting and other rights
may be diluted. |
| Q: | Can
the Board of Directors amend, withdraw or terminate the Rights Offering? |
| A: | Yes.
Our Board of Directors reserves the right to amend, withdraw or terminate the Rights Offering
at any time prior to the expiration of the Rights Offering for any reason. If the Rights
Offering is terminated, any subscription payments received by the Subscription Agent will
be returned in the manner and form in which such payments were made, without interest or
penalty, as soon as practicable following the termination of the Rights Offering. To the
extent that our Board of Directors amends material terms of, withdraws or terminates the
Rights Offering, we will notify our stockholders in a manner reasonably calculated to inform
them about such action. |
| Q: | When
will the Rights Offering expire? |
| A: | The
subscription rights will expire, if not exercised, at the Expiration Date and Time, unless
we decide to extend the Rights Offering until some later time. See “The Rights Offering
– Expiration of the Rights Offering and Extensions, Amendments and Termination”.
The Subscription Agent must actually receive all required documents and payments before that
time and date in order for you to properly exercise your subscription rights. Although we
will make reasonable attempts to provide this prospectus to our stockholders, the Rights
Offering and all subscription rights will expire on the Expiration Date and Time, whether
or not we have been able to locate each person entitled to subscription rights. If you cannot
deliver your documents and payment before the Expiration Date and Time, you may follow the
guaranteed delivery procedures described under “The Rights Offering – Guaranteed
Delivery Procedures”. |
| Q: | How
do I exercise my subscription rights? |
| A: | You
may exercise your subscription rights by properly completing and signing your subscription
rights certificate if you are a record holder of our Common Stock, or by properly completing
the subscription documents received from your bank or broker-dealer if your shares of Common
Stock are held in street name. Your subscription rights certificate, or properly completed
subscription documents, as the case may be, together with full payment of the subscription
price, must be received by the Subscription Agent by the Expiration Date and Time, unless
delivery of the subscription rights certificate is effected pursuant to the guaranteed delivery
procedures described below. You must exercise your over-subscription privilege at the same
time you exercise your basic subscription right in full. In exercising the over-subscription
privilege, you must pay the full subscription price for all the shares you are electing to
purchase. All subscription payments received by the Subscription Agent from the exercise
of subscription rights that are not fulfilled will be returned to investors in the manner
and form in which such payments were made, without interest or penalty, as soon as practicable
after the Rights Offering has expired and all prorating calculations and reductions contemplated
by the terms of the Rights Offering have been effected. |
If you use mail, we recommend that
you use insured, traceable or overnight mail, return receipt requested. We will not be obligated to honor your exercise of subscription
rights if the Subscription Agent receives the documents relating to your exercise after the Expiration Date and Time, regardless of when
you transmitted the documents.
| Q: | May I
transfer, sell or assign my subscription rights? |
| A: | No.
You may not transfer, sell or assign any of your subscription rights, except that the
subscription rights will be transferable by operation of law. The subscription rights are
non-transferable and will not be listed on any securities exchange or included in any automated
quotation system. Therefore, there will be no market for the subscription rights. |
| Q: | What
should I do if I want to participate in the Rights Offering but my shares of Common Stock
are held in the name of my broker, dealer, custodian bank, or other nominee? |
| A: | If
you hold shares of our Common Stock through a broker, dealer, custodian bank, or other nominee,
we will ask your broker, dealer, custodian bank, or other nominee to notify you of the Rights
Offering. If you wish to exercise your subscription rights, you will need to have your broker,
dealer, custodian bank, or other nominee act for you. To indicate your decision, you should
complete and return to your broker, dealer, custodian bank, or other nominee the form entitled
“Beneficial Owner Election Form”. You should receive this form from your broker,
dealer, custodian bank, or other nominee with the other rights offering materials. You should
contact your broker, dealer, custodian bank, or other nominee if you do not receive this
form, but you believe you are entitled to participate in the Rights Offering. Your
nominee may establish an earlier deadline before the Expiration Date and Time by
which time you must provide the nominee with your instructions and deliver all documents
and payments to exercise your subscription rights. |
| Q: | Will
I be charged a sales commission or a fee if I exercise my subscription rights? |
| A: | We
will not charge a brokerage commission or a fee to subscription rights holders for exercising
their subscription rights. However, if you exercise your subscription rights through a broker,
dealer, custodian bank, or other nominee, you will be responsible for any fees charged by
your broker, dealer, custodian bank, or other nominee. |
| Q: | Are
there any conditions to my right to exercise my subscription rights? |
| A: | Yes.
The Rights Offering is subject to certain limited conditions. See “The Rights Offering
– Conditions, Amendment, Withdrawal and Termination”. |
| Q: | May I
participate in this Rights Offering if I sell my Common Stock after the Record Date? |
| A: | The
Record Date for this Rights Offering is December 13, 2024. If you owned Common Stock
as of the Record Date, you will receive subscription rights and may participate in the Rights
Offering even if you subsequently sell your Common Stock. |
| Q: | Will
the Company’s executive officers and directors exercise their subscription rights? |
Messrs. Turki Saleh A. AlRajhi
and Muhammad Asif Seemab, members of the Board of Directors, are also Managing Directors of Mithaq,
and may be deemed to beneficially own all of the shares of Common Stock currently beneficially owned by Mithaq and its subsidiary, Snowball,
and any shares of Common Stock which would be acquired by Mithaq and Snowball upon exercise of their subscription rights in the
Rights Offering. Mithaq has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights
distributed to it and Snowball by the Company in the Rights Offering, as well as the over-subscription privilege.
More generally, our directors and executive
officers who own shares of Common Stock are permitted, but not required, to participate in the Rights Offering on the same terms and
conditions applicable to all holders of subscription rights.
| Q: | What
is the recommendation of the Board of Directors regarding the Rights Offering? |
| A: | Although
the Rights Offering has been approved by the Disinterested Directors, neither the Company
nor the Board of Directors is making any recommendation regarding your exercise of subscription
rights in the Rights Offering or the sale or transfer of the underlying shares of Common
Stock. You are urged to make your decision based on your own assessment of your best interests
and of our business and financial condition, our prospects for the future, the terms of the
Rights Offering and the information contained in, or incorporated by reference in, this prospectus,
as it may be supplemented from time to time. |
| Q: | How
was the subscription price of $9.75 per whole share of Common Stock established? |
| A: | The
Disinterested Directors determined the subscription price prior to the registration statement
of which this prospectus forms a part becoming effective, after
consultation with our financial advisor, Roth Capital Partners, LLC (“Roth”),
and taking into consideration, among other things, the following factors: |
| · | the
current and historical trading prices of Common Stock on Nasdaq; |
| · | the
Disinterested Directors’ assessment of the price at which stockholders might be willing
to participate in the Rights Offering; |
| · | the
Company’s need for additional capital and liquidity and to deleverage; |
| · | the
Company’s business prospects and general conditions of the securities markets; |
| · | the
cost of capital from other sources; |
| · | comparable
precedent transactions, including the percentage of shares offered, the terms of the rights
being offered, the subscription price and the discount that the subscription price represents
to recent closing prices for those offerings; and |
| · | the
Company’s contractual obligations pursuant to the Letter Agreement. |
In conjunction with the review of
these factors, the Disinterested Directors considered our history and prospects, including our past and present earnings and cash requirements,
our prospects for the future, the outlook for our industry and our current financial condition. The Disinterested Directors believe that
the subscription price should be designed to provide an incentive to our current stockholders to participate in the Rights Offering and
exercise their basic subscription rights and their over-subscription privilege.
The subscription price does not
necessarily bear any relationship to the book value of our assets or our past operations, cash flows, losses, financial condition, net
worth or any other established criteria used to value securities. No valuation consultant or investment banker has opined or is expected
to opine upon the fairness or adequacy of the subscription price. You should not consider the subscription price to necessarily be an
indication of the fair value of the Common Stock to be offered in this Rights Offering. You should not assume or expect that, after the
Rights Offering, our Common Stock will trade at or above the subscription price in any given time period. The market price of our Common
Stock may decline after the Rights Offering. We cannot assure you that you will be able to sell the shares of our Common Stock purchased
during the Rights Offering at a price equal to or greater than the subscription price. You should obtain a current price quote for our
Common Stock before exercising your subscription sights and make your own assessment of our business and financial condition, our prospects
for the future, and the terms of the Rights Offering. Once made, all exercises of subscription rights are irrevocable. For a discussion
of recent trading prices of our Common Stock on Nasdaq, see “Public Market for Our Common Stock”.
We retained
Roth to render certain financial advisory services in connection with the Rights Offering. We have agreed to pay Roth a $200,000
fee for rendering these services. See “Plan of Distribution”.
| Q: | Is
it risky to exercise my subscription rights? |
| A: | The
exercise of your subscription rights involves risks. Exercising your subscription rights
means buying additional shares of our Common Stock and should be considered as carefully
as you would consider any other equity investment. You should carefully consider the information
under the heading “Risk Factors” and all other information included herein
before deciding to exercise your subscription rights. |
| Q: | Am
I required to subscribe in the Rights Offering? |
| A: | No.
You may exercise any number of your subscription rights or you may choose not to exercise
any subscription rights. If you do not exercise any subscription rights, the number of shares
of our Common Stock you own will not change. However, if you choose not to exercise your
subscription rights in full, your ownership interest in our capital stock may be diluted
by other stockholder purchases. In addition, if you do not exercise your basic subscription
right in full, you will not be entitled to participate in the over-subscription privilege.
See “Risk Factors - Risks Related to the Rights Offering - Stockholders who do not
fully exercise their rights may have their interests diluted”. |
| Q: | How
do I exercise my subscription rights if I live outside the United States? |
| A: | Subscription
rights certificates will only be mailed to holders as of the Record Date whose addresses
are within the United States (other than an APO or FPO address). Holders as of the Record
Date whose addresses are outside the United States or who have an APO or FPO address and
who wish to subscribe to the Rights Offering either in part or in full should contact the
Subscription Agent in writing no later than five business days prior to the Expiration Date
and Time. See “The Rights Offering—Foreign Restrictions”. |
| Q: | After
I exercise my subscription rights, can I change my mind and cancel my purchase? |
| A: | No. Once
you send in your subscription rights certificate and payment, you cannot revoke the exercise
of your subscription rights, even if the market price of our Common Stock is below the subscription
price of $9.75 per whole share of Common Stock. You should not exercise your subscription
rights unless you are certain that you wish to purchase additional shares of our Common Stock
at a price of $9.75 per whole share of Common Stock. Subscription rights not exercised prior
to the expiration of the Rights Offering will expire and will have no value. |
| Q: | What
are the U.S. federal income tax consequences of receiving or exercising my subscription rights? |
| A: | Although
the authorities governing transactions such as the Rights Offering are complex and unclear
in certain respects (including with respect to the effects of the over-subscription privilege),
we believe and intend to take the position that a holder’s receipt or exercise of rights
should generally be non-taxable for U.S. federal income tax purposes. This position regarding
the non-taxable treatment of the Rights Offering is, however, not binding on the U.S. Internal
Revenue Service (the “IRS”) or the courts. You should consult your tax
advisor as to the particular tax consequences to you of the receipt of rights in the Rights
Offering and the exercise or lapse of the rights, including the applicability of any state,
local or non-U.S. tax laws in light of your particular circumstances. For a more detailed
discussion, see “Material U.S. Federal Income Tax Consequences”. |
| Q: | If
the Rights Offering is not completed, will my subscription payment be returned to me? |
| A: | Yes.
The Subscription Agent will hold all funds received from subscribing stockholders
in a segregated account (or, with respect to any evidence of indebtedness for borrowed money
received from subscribing stockholders, in escrow) until we issue your shares of our Common
Stock to you upon consummation of the Rights Offering or the withdrawal or termination of
the Rights Offering. If the Rights Offering is not completed, all subscription payments
that the Subscription Agent receives will be returned in the manner and form in which such
payments were made, without interest or deduction, as soon as practicable after the Expiration
Date and Time, and after all necessary calculations,
pro rata allocations and adjustments have been completed. If you own shares
in “street name”, it may take longer for you to receive payment because the Subscription
Agent will return payments to the record holder of your shares of Common Stock. |
| Q: | How
many shares of Common Stock will be outstanding after the Rights Offering? |
| A: | We
expect approximately 22,015,741 shares of our Common Stock will be outstanding immediately
after the completion of the Rights Offering, assuming full exercise of each holder’s
basic subscription rights and no other changes in our shares outstanding. |
| Q: | Will
Mithaq exercise the subscription rights? |
| A: | Mithaq
has indicated that it currently intends, but undertakes no obligation, to exercise all of
the subscription rights distributed to it and its subsidiary, Snowball, by the Company in
the Rights Offering, as well as the over-subscription privilege, and that it currently intends,
but undertakes no obligation, to pay some or all of the subscription price payable upon the
exercise of any such subscription rights directly held by Mithaq with indebtedness for borrowed
money owed by the Company to Mithaq (including any indebtedness then-outstanding pursuant
to Mithaq Term Loans). We expect the total subscription price payable upon the exercise of
all of such rights by Mithaq and Snowball, excluding any additional subscription price that
might be payable in connection with any exercise by Mithaq and Snowball of the over-subscription
privilege, to be approximately $49,289,077.50. See “The Rights Offering—Participation
of Our Directors, Executive Officers and Significant Stockholders” and “Risk
Factors – Risks Related to Our Stock and Stock Price – We have a controlling
stockholder who, following the Rights Offering, may continue owning a majority of our outstanding
shares of Common Stock, and as a result controls all matters requiring shareholder approval.” |
| Q: | If
I exercise my subscription rights, when will I receive shares of Common Stock purchased in
the Rights Offering? |
|
A: |
We
will deliver to the record holders who purchase shares of our Common Stock in the Rights Offering DRS statements representing
the shares of Common Stock purchased in the Rights Offering as soon as practicable after the Expiration Date and Time, or such
later date as to which the Rights Offering may be extended, and after all necessary
calculations, pro rata allocations and adjustments have been completed.
If
you hold your shares of Common Stock in street name through a broker, dealer, custodian bank, or other nominee and you purchase shares
of Common Stock in the Rights Offering, your account with your nominee will be credited with the shares you purchased in the Rights
Offering as soon as practicable after the Expiration Date and Time, or such later date as to which the Rights Offering may be extended,
and after all necessary calculations, pro rata allocations and adjustments have
been completed. |
| Q: | Will
the subscription rights be listed on a stock exchange or national market? |
| A: | No. The
subscription rights are non-transferable and will not be listed on any securities exchange
or included in any automated quotation system. Therefore, there will be no market for the
subscription rights. |
| Q: | To
whom should I send my forms and payment? |
| A: | The
Subscription Agent for this Rights Offering is Equiniti Trust Company, LLC. If your
shares of Common Stock are held in the name of a broker, dealer, custodian bank, or other
nominee, then you should send your applicable subscription documents to your broker, dealer,
custodian bank, or other nominee. If you are a record holder, then you should send your applicable
subscription documents, by first class mail, registered, certified or express mail, or overnight
courier, to: |
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
Delivery of your subscription documents
to an address other than set forth above does not constitute a valid delivery.
We will pay the fees and expenses of
the Subscription Agent and have agreed to indemnify the Subscription Agent with respect to certain liabilities that it may incur in connection
with the Rights Offering.
You are solely responsible for timely
completing the delivery to the Subscription Agent of your subscription documents, subscription rights certificate and payment. We urge
you to allow sufficient time for delivery of your subscription materials.
| Q: | I
am a stockholder and also a creditor of the Company with respect to indebtedness
for borrowed money. I would like to pay some or all of the subscription price
for my shares of Common Stock by delivery, in lieu of cash, of an equivalent amount of indebtedness
for borrowed money owed to me by the Company. How can I do so? |
|
A: |
If
you would like to pay some or all of the subscription price for your shares of Common Stock
by delivery, in lieu of cash, of an equivalent amount of indebtedness for borrowed money owed to
you by the Company, you must contact the Company at:
500 Plaza Drive
Secaucus, New Jersey
07094
Attention:
Jared E. Shure, Chief Administrative Officer, General Counsel & Secretary
Telephone:
(201) 453-7049
as soon as practicable after the date
of this prospectus (and in any event prior to exercising your subscription rights and delivering any indebtedness for borrowed money
in payment therefor) so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness
for borrowed money to be valid and eligible for delivery in payment of some or all of the subscription price and (ii) confirm
the documentation that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for
borrowed money as payment for some or all of the subscription price. As it may take some time for the Company to evaluate and respond
to requests to deliver indebtedness for borrowed money in full or partial payment of the subscription price and for you, thereafter,
to complete and provide the necessary documentation to the Subscription Agent, the Company strongly recommends that you start this
process as soon as possible and not wait until the final days of the Subscription Period. Your delay in commencing this process may
result in your being unable to timely deliver your indebtedness for borrowed money as full or partial payment of the subscription
price, which in turn would result in your purported exercise of Rights to be paid for with such indebtedness for borrowed money being
rejected.
Following
the Company’s determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to
be valid and eligible for delivery in payment of some or all of the subscription price and confirmation, in its sole and absolute
discretion, of the documentation that you will be required to deliver to the Subscription Agent in order to validly deliver such
indebtedness for borrowed money as payment for some or all of the subscription price, you must deliver to the Subscription Agent
prior to the Expiration Date and Time, at the Subscription Agent’s address set forth above, the original evidence of such indebtedness
for borrowed money (principal and/or accrued and unpaid interest) owed to you by the Company in the amount equivalent to the
amount of the subscription price (in accordance with the Instructions for Use of Non-Transferable Subscription Rights Certificates
that accompanied this prospectus), together with a properly completed and executed subscription rights certificate and any other
documentation confirmed to you by the Company.
You should contact the Company directly
at the address or phone number stated above for further details regarding the appropriate documentation to submit in order to validly
deliver evidence of such indebtedness for borrowed money. |
| Q: | What
should I do if I have other questions? |
| A: | If
you have questions or need assistance, please contact D.F. King & Co., Inc.,
the Information Agent for the Rights Offering, at (888) 567-1626. |
Key Dates for the Rights Offering
| Record date |
5:00 p.m., New
York City time, on December 13, 2024 |
| Launch of Rights Offering
and distribution of rights |
December 24, 2024 |
| Expiration Date and Time |
5:00 p.m., New York City
time, on January 24, 2025 |
| Notice of guaranteed delivery
due |
5:00 p.m., New York City
time, on January 24, 2025 |
SUMMARY
This summary highlights
information included elsewhere in this registration statement and does not contain all of the information that may be important to you.
You should read this entire registration statement carefully, including the information contained in the sections titled “Risk
Factors” and “Cautionary Statement Regarding Forward-Looking Statements”.
Overview
The Children’s Place
and its subsidiaries operate an omni-channel children’s specialty portfolio of brands with an industry-leading digital-first operating
model. Our global retail and wholesale network includes two digital storefronts, more than 500 stores in North America, wholesale marketplaces
and distribution in 15 countries through six international franchise partners. We design, contract to manufacture, and sell fashionable,
high-quality apparel, accessories and footwear predominantly at value prices, primarily under our proprietary brands: “The Children’s
Place”, “Gymboree”, “Sugar & Jade”, and “PJ Place”. Our physical stores offer a friendly
and convenient shopping environment, segmented into departments that serve the wardrobe needs of girls and boys (sizes 4-18), toddler
girls and boys (sizes 6 months-5T), and baby (sizes 0-24 months). Our merchandise is also available online at www.childrensplace.com
and www.gymboree.com. Our customers are able to shop online for the same merchandise available in our physical stores, in
addition to certain merchandise which is exclusive to our e-commerce sites.
The Children’s Place
was founded in 1969 and became publicly traded on Nasdaq in 1997. As of February 3, 2024, we operated 523 stores throughout North
America, as well as our online stores. On November 19, 2024, we opened our first Gymboree store at the Garden State Plaza in Paramus,
New Jersey.
Recent Developments
Mithaq
Investment
As of February 12,
2024, Mithaq had acquired more than 50% of our outstanding shares of the Common Stock (the “Mithaq Investment”). As
of October 15, 2024, Mithaq beneficially owned 7,001,787 shares of Common Stock, or approximately 55.1% of the shares of our Common
Stock outstanding as of September 5, 2024, based on disclosures made by Mithaq in its most recent amendment to its Beneficial Ownership
Report on Schedule 13D in respect of the Company.
Mithaq’s acquisition
of our Common Stock resulted in a change of control of the Company, thereby triggering an event of default under the Amended and Restated
Credit Agreement, dated as of May 9, 2019, with the lenders party thereto (collectively, the “Credit Agreement Lenders”,
and such Amended and Restated Credit Agreement, as amended from time to time, the “Credit Agreement”). On April 16,
2024, the Company and certain of its subsidiaries entered into a seventh amendment to the Credit Agreement (the “Seventh Amendment”)
with the Credit Agreement Lenders that, among other things, provided a permanent waiver of such change of control event of default.
Governance
On February 29, 2024,
we and Mithaq entered into the Letter Agreement for purposes of, among other things, ensuring an orderly transition of the governance
of the Company following the change of control. As of May 3, 2024, the size of our Board of Directors was reduced from ten to six,
and other than our then-Chief Executive Officer, all other then-members of the Board of Directors resigned and, where applicable, were
replaced. On May 20, 2024, Jane T. Elfers departed as President and Chief Executive
Officer of the Company and as a member of the Board of Directors, and Muhammad Umair was appointed
as President and Interim Chief Executive Officer of the Company.
On October 3, 2024,
we announced that Jared E. Shure, who was previously the Company’s Senior Vice President, General Counsel and Corporate Secretary,
was named Chief Administrative Officer, General Counsel and Corporate Secretary, effective September 10, 2024.
On December 12, 2024,
we announced that, as previously disclosed, Sheamus Toal would be leaving his positions as Chief
Operating Officer and Chief Financial Officer (and as the Company’s principal financial officer and principal accounting officer),
effective December 14, 2024. Also on December 12, 2024, we announced that Laura
Lentini, the Company’s Chief Accounting Officer, has been appointed as Interim Chief Financial Officer as well as the Company’s
principal financial officer and principal accounting officer, effective December 15, 2024.
Indebtedness
We and certain of our
subsidiaries maintain the $433.0 million asset-based revolving credit facility (the “ABL
Credit Facility”) under our Credit Agreement. The ABL Credit Facility will mature in November 2026. Any payments in respect
of the shares of our Common Stock issuable upon exercise of the subscription rights will be subordinated to our obligations under the
Credit Agreement.
On February 29, 2024,
we and certain of our subsidiaries entered into an interest-free unsecured subordinated promissory note with Mithaq, providing for up
to $78.6 million in term loans (the “Initial Mithaq Term Loan”). We received $30 million on February 29, 2024
and $48.6 million on March 8, 2024. The Initial Mithaq Term Loan matures on February 15, 2027.
On April 16, 2024,
we and certain of our subsidiaries entered into a new financing agreement with Mithaq for an unsecured and subordinated $90.0 million
term loan (the “New Mithaq Term Loan”, and collectively with the Initial Mithaq Term Loan, the “Mithaq Term
Loans”). The New Mithaq Term Loan matures on April 16, 2027, and requires monthly payments equivalent to interest charged
at the Secured Overnight Financing Rate (“SOFR”) plus 4.000% per annum, with such monthly payments to Mithaq
deferred until April 30, 2025. We received the funds from the New Mithaq Term Loan on April 18, 2024.
The proceeds from these financings
were used to pay down the Company’s $50.0 million term loan that existed as of February 3, 2024, and the remaining proceeds
were used to support the general operations of the Company’s business, including working capital.
Also on April 16, 2024,
we and certain of our subsidiaries entered into the Seventh Amendment that, among other things, reduced the ABL Credit Facility from
$445.0 million to $433.0 million. The Seventh Amendment also modified certain existing requirements to restrict certain payments, including
the repurchase of shares and the payment of dividends.
On May 2, 2024, we entered
into a commitment letter with Mithaq for a $40.0 million senior unsecured credit facility (the “Mithaq Credit Facility”).
Under the Mithaq Credit Facility, we may request for advances at any time up to July 1, 2026. If any debt is incurred under the
Mithaq Credit Facility, it shall require monthly payments equivalent to interest charged at the SOFR plus 5.000% per annum. Additionally,
such debt shall require no mandatory prepayments and shall mature no earlier than July 1, 2026.
Rights
Offering
Pursuant
to the Letter Agreement, the Company agreed to, among other things, use reasonable best efforts to prepare, file, and cause to
be effective a registration statement, prospectus and other materials required under applicable law to permit, and to then commence and
complete, a rights offering in order to raise up to approximately $90.0
million in additional capital. In light of this obligation, and following the Disinterested
Directors’ determination that the Rights Offering is in the best interests of the Company and its stockholders and would, among
other things, provide the Company with an opportunity to raise capital and deleverage and more generally strengthen its balance sheet,
the Disinterested Directors unanimously approved the Rights Offering. See “The Rights Offering – Reasons for the Rights
Offering”.
Mithaq has indicated that
it currently intends, but undertakes no obligation, to exercise all of the subscription rights distributed to it and its subsidiary,
Snowball, by the Company in the Rights Offering, as well as the over-subscription privilege, and that it currently intends, but undertakes
no obligation, to pay some or all of the subscription price payable upon the exercise of any such subscription rights directly held by
Mithaq with indebtedness for borrowed money owed by the Company to Mithaq (including any indebtedness for borrowed money then-outstanding
pursuant to Mithaq Term Loans). Messrs. Turki Saleh A. AlRajhi and Muhammad Asif Seemab, members of the Board of Directors, are
also Managing Directors of Mithaq, and may be deemed to beneficially own all of the shares of Common
Stock currently owned by Mithaq and Snowball and any shares of Common Stock which would be acquired by Mithaq and Snowball upon exercise
of their subscription rights in the Rights Offering. We expect the total subscription price payable upon the exercise of all of such
rights by Mithaq and Snowball, excluding any additional subscription price that might be payable in connection with any exercise by Mithaq
and Snowball of the over-subscription privilege, to be approximately $49,289,077.50. See “The Rights Offering – Participation
of Our Directors, Executive Officers and Significant Stockholders” and “Risk Factors – Risks Related to Our
Stock and Stock Price – We have a controlling stockholder who, following the Rights Offering, may continue owning a majority of
our outstanding shares of Common Stock, and as a result controls all matters requiring shareholder approval.”
Risk Factors Summary
An investment in shares of
our Common Stock is subject to a number of risks, including risks relating to the separation, the successful implementation of our strategy
and the ability to grow our business. The following list of risk factors is not exhaustive. See “Risk Factors” for
a more thorough description of these and other risks.
Risks Related to Business
Strategies and Global Operations
| |
· |
We depend
on generating sufficient cash flows, together with our existing cash balances and availability under our credit facility, to fund
our ongoing operations, capital expenditures, debt service requirements, and any future share repurchases or payment of dividends. |
| |
· |
We may
not be able to successfully execute our business strategies. |
| |
· |
A wide
variety of factors can cause a decline in consumer confidence and spending. |
| |
· |
Fluctuations
in the prices of raw materials, labor, energy, and services could result in increased product and/or delivery costs. |
| |
· |
Damage
to, or a prolonged interruption of activities at, any facility that we use in our business operations could have a material adverse
effect on our business. |
| |
· |
We depend
on our relationships with unaffiliated manufacturers, suppliers, and transportation companies, both domestically and internationally. |
| |
· |
We may
experience disruptions at ports used to export our products from Asia, Africa, and other regions, or along the various shipping routes,
or used as ports of entry in the United States and Canada. |
| |
· |
Because
certain of our subsidiaries operate outside of the United States, some of our revenues, product costs, and other expenses are subject
to foreign economic and currency risks. |
| |
· |
Acts of
terrorism, effects of war, pandemics or other health issues, natural disasters, other catastrophes, or political unrest could have
a material adverse effect on our business. |
| |
· |
Our success
depends upon the service and capabilities of our management team. |
| |
· |
Any disruption
in, or changes to, our consumer credit arrangements, including our private label credit card agreement, may adversely affect the
ability of our customers to obtain consumer credit. |
| |
· |
We are
subject to customer payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential
liability and potentially disrupt our business. |
Risks Related to the Retail
and Apparel Industries
| |
· |
We may
suffer material adverse business consequences if we are unable to anticipate, identify, and respond to merchandise trends, marketing
and promotional trends, changes in technology, or customer shopping patterns. Profitability and our reputation could be materially
negatively impacted if we do not adequately forecast the demand for our products and, as a result, create significant levels of excess
inventory or insufficient levels of inventory. |
| |
· |
Product
liability costs, related claims, and the cost of compliance with consumer product safety laws in the U.S. and in Canada or our inability
to comply with such laws could have a material adverse effect on our business and reputation. |
| |
· |
We face
significant competition in the retail and apparel industries, which could negatively impact our business. |
| |
· |
If our
landlords should suffer financial difficulty or if we are unable to successfully negotiate acceptable lease terms, it could have
a material adverse effect on our business. |
Risks Related to Our Stock
and Stock Price
| |
· |
Changes
in our sales, comparable retail sales, margins, operating income, earnings per share, cash flows, and/or other results of operations
could have a material adverse effect on the market price of our Common Stock, which subsequently could lead to litigation. |
| |
· |
We have a
controlling stockholder who, following the Rights Offering, may continue owning a majority
of our outstanding shares of Common Stock, and as a result controls all matters requiring
shareholder approval. |
| |
· |
Our share
price may be volatile. |
| |
· |
We have
no current plans to pay regular cash dividends on our Common Stock for the foreseeable future. |
| |
· |
Our actual
operating results may not meet or exceed our guidance and investor expectations, which would likely cause our stock price to decline. |
| |
· |
An active,
liquid trading market for our Common Stock may not be sustained. |
| |
· |
If securities
or industry analysts do not publish research or reports about our business, our stock price and trading volume could decline. |
Risks Related to Cybersecurity,
Data Privacy, Information Technology and E-Commerce
| |
· |
A privacy
breach, through a cybersecurity incident or otherwise, or failure to comply with privacy laws could have a material adverse effect
on our business. |
| |
· |
Our failure
to successfully manage our e-commerce business could have a material adverse effect on our business. |
| |
· |
A material
disruption in, failure of, inability to upgrade, or inability to properly implement disaster recovery plans for, our information
technology or other business systems could have a material adverse effect on our business. |
Risks Related to Legal
and Regulatory Matters
| |
· |
We have
exercised our option for the “controlled company” exemption under Nasdaq rules. |
| |
· |
We may
be unable to protect our trademarks and other intellectual property rights. |
| |
· |
Federal
tax and other legislation have had and will continue to have a material effect on our business. |
| |
· |
Our failure
to comply with federal, state or local law, and litigation involving such laws, or changes in such laws, could materially increase
our expenses and expose us to legal risks and liability. |
| |
· |
Legal
and regulatory actions are inherent in our business and could have a material adverse effect on our business, reputation, financial
position, results of operations, and cash flows. |
| |
· |
Legislative
actions and new accounting pronouncements could result in us having to increase our administrative expenses to remain compliant and
could have other material adverse effects. |
| |
· |
We have
in the past experienced a material weakness in our internal controls over financial reporting. |
Risks Related to the Rights
Offering
| |
· |
In the
event that the Rights Offering does not close, or results in less proceeds than expected, we will have less liquidity than expected. |
| |
· |
The subscription
price determined for this Rights Offering is not necessarily an indication of the fair value of our Common Stock. No valuation consultant
or investment banker has opined or is expected to opine upon the fairness or adequacy of the subscription price. |
| |
· |
Stockholders
who do not fully exercise their rights may have their interests diluted. |
| |
· |
You may
not revoke your subscription exercise and could be committed to buying shares of Common Stock above the prevailing market price. |
| |
· |
We may
terminate the Rights Offering at any time prior to the expiration of the Subscription Period, and neither we nor the Subscription
Agent will have any obligation to you except to return your exercise payments. |
| |
· |
The rights
are not transferable, and there is no market for the rights. |
| |
· |
You must
act promptly and follow instructions carefully if you want to exercise your rights. |
| |
· |
Significant
sales of our Common Stock, or the perception that significant sales may occur in the future, could adversely affect the market price
for our Common Stock. |
| |
· |
You will
not be able to sell the shares of Common Stock you buy in the Rights Offering until you receive your DRS statements or your account
is credited with the Common Stock. |
| |
· |
Because
our management will have broad discretion over the use of the net cash proceeds from the Rights Offering, you may not agree with
how we use the proceeds, and we may not invest the proceeds successfully. |
| |
· |
If you
use a personal check to pay for the shares of Common Stock, it may not clear in time. |
| |
· |
If
you seek to pay some or all of the subscription price by delivering indebtedness for borrowed money and fail to contact the Company
with such request promptly following the commencement of this Rights Offering, such delay may result in your being unable to timely
deliver your indebtedness for borrowed money as full or partial payment of the subscription price, which in turn would result in
your purported exercise of Rights to be paid for with such indebtedness for borrowed money being rejected. |
| |
· |
Because
no minimum subscription is required and because we do not have formal commitments from our stockholders for the entire amount we
seek to raise pursuant to the Rights Offering, we cannot assure you of the amount of proceeds that we will receive from the Rights
Offering. |
Controlled Company Status
As a
result of the Mithaq Investment, we are a “controlled company” within the meaning of Rule 5615(c)(1) of the Nasdaq
Listing Rules, and our Board of Directors has chosen to rely on the controlled company exceptions under the Nasdaq Listing Rules that
would otherwise require us to have a majority independent board and fully independent Human Capital and Compensation Committee and Corporate
Responsibility, Sustainability and Governance Committee. See “Risk Factors – Risks Related to Legal and
Regulatory Matters – We have exercised our option for the “controlled company” exemption under Nasdaq rules”.
Corporate Information
The Children’s Place
is a Delaware corporation founded in 1969. The address of our principal executive offices is 500 Plaza Drive, Secaucus, New Jersey 07094,
and our telephone number is (201) 558-2400. We maintain an internet website at www.childrensplace.com. Our website, and the information
contained on or accessible through our website, is not incorporated by reference in this registration statement.
THE
RIGHTS OFFERING SUMMARY
The following summary
describes the principal terms of the Rights Offering, but it is not intended to be a complete description of the Rights Offering. See
the information under the heading “The Rights Offering” in this prospectus for a more detailed description of the terms and
conditions of the Rights Offering.
| Subscription
Rights |
We
will distribute to each stockholder of record as of close of business on the Record Date, either as a holder of record or, in the
case of shares held of record by brokers, dealers, custodians or other nominees on your behalf, as a beneficial owner of those shares,
at no charge, one non-transferable subscription right for each share of our Common Stock then owned. Each subscription right will
entitle its holder to purchase 0.7220 shares of our Common Stock. The subscription rights will be evidenced by a non-transferable
subscription rights certificate. This registration statement is registering both the subscription rights and the shares of Common
Stock that may be issued pursuant to the exercise of subscription rights. |
| |
|
| Basic
Subscription Right |
Each
subscription right will entitle the holder to purchase 0.7220 shares of our Common Stock at a subscription price of $9.75
per whole share. |
| |
|
| Over-subscription
Privilege |
Each
rights holder who elects to exercise its basic subscription right in full may also subscribe for additional shares of our Common
Stock at the same subscription price per share. If an insufficient number of shares of our Common Stock is available to fully satisfy
the over-subscription privilege requests, the available shares of Common Stock will be distributed proportionately among rights holders
who exercised their over-subscription privilege based on the number of shares of Common Stock each rights holder subscribed for under
the basic subscription right, subject to certain limitations. You must exercise your over-subscription privilege at the same time
you exercise your basic subscription right in full. In exercising the over-subscription privilege, you must pay the full subscription
price for all the shares you are electing to purchase. If you exercised your over-subscription privilege and are allocated less than
all of the shares of our Common Stock for which you wished to subscribe, your excess payment for shares that were not allocated to
you will be returned in the manner and form in which such payment was made, without interest or deduction, as soon as practicable
following the Expiration Date and Time, and after all necessary calculations, pro
rata allocations and adjustments have been completed. |
| Subscription
Price |
The
subscription price is $9.75 per whole share of Common Stock, payable (i) in cash, (ii) by delivery in lieu of cash
of an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by the Company
to the applicable rights holder, or (iii) by delivery of a combination of cash and such indebtedness. To be effective, any payment
related to the exercise of a subscription right must be received by the Subscription Agent and must clear before the Expiration Date
and Time. The subscription price does not necessarily bear any relationship to the book value of our assets or our past operations,
cash flows, losses, financial condition, net worth or any other established criteria used to value securities. |
| |
|
| No
Fractional Shares |
No
fractional shares of Common Stock will be issued upon the exercise of subscription rights in this Rights Offering. Any fractional
shares of Common Stock created by the exercise of subscription rights will be rounded down to the nearest whole share. |
| |
|
| Record
Date |
5:00
p.m., New York City time, on December 13, 2024 (close of business). |
| |
|
| Expiration
Date and Time |
5:00
p.m., New York City time, on January 24, 2025, unless we extend the Subscription Period. Rights not exercised before
the Expiration Date and Time will be void and of no value and will cease to be exercisable for our Common Stock. We will not be obligated
to honor your exercise of rights if the Subscription Agent receives the documents and payment of the subscription price relating
to your exercise after the Expiration Date and Time, regardless of when you transmitted the documents, provided that if you
wish to exercise rights, but you do not have sufficient time to deliver the rights certificate evidencing your rights to the Subscription
Agent before the Expiration Date and Time, you may exercise your rights by guaranteed delivery procedures described under “The
Rights Offering –Guaranteed Delivery Procedures”. All payments in respect of the Subscription Price, whether
in cash or by delivery of indebtedness for borrowed money owed to you by the Company, must be received by the Subscription Agent
prior to the Expiration Date and Time, even if you intend to deliver the rights certificate evidencing your rights by Notice of Guaranteed
Delivery. |
| |
|
| Listing
and Trading |
Our Common
Stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “PLCE”. The rights
will be non-transferable. |
| Procedure for Exercising Rights |
To exercise your subscription rights, you
must take the following steps: |
| |
|
|
| |
· |
If you are
a registered holder of our Common Stock, the Subscription Agent must receive your payment for each share of Common stock subscribed
for pursuant to your subscription right at the subscription price of $9.75 per whole share and properly completed subscription
rights certificate before 5:00 p.m., New York City time, on January 24, 2025. You may deliver the documents and payments by
first class mail, registered, certified or express mail, or overnight courier. If regular mail is used for this purpose,
we recommend using traceable or overnight mail, properly insured, with return receipt requested. |
| |
· |
If you are
a beneficial owner of shares of Common Stock registered in the name of a broker, dealer, custodian bank, or other nominee, or if
you would prefer that an institution conduct the transaction on your behalf, you should instruct your broker, dealer, custodian bank,
or other nominee to exercise your subscription rights on your behalf and deliver all documents and payments to the Subscription Agent
before the Expiration Date and Time. If you are a beneficial owner of shares of Common Stock registered in the name of a broker,
dealer, custodian bank, or other nominee, your nominee may establish an earlier deadline before the Expiration Date
and Time by which time you must provide the nominee with your instructions and deliver all documents and payments to exercise your
subscription rights. |
| |
· |
If
you wish to purchase shares of our Common Stock through the Rights Offering, please promptly contact any broker, dealer, custodian
bank, or other nominee who is the record holder of your shares of Common Stock. We will ask your record holder to notify you of the
Rights Offering. You should complete and return to your record holder the appropriate subscription documentation you receive from
your record holder. |
| |
· |
If
you wish to exercise your subscription rights but cannot deliver your rights certificate to the Subscription Agent prior to the expiration
of this Rights Offering, you may follow the guaranteed delivery procedures described under “The Rights Offering –
Guaranteed Delivery Procedures”. |
| |
|
|
| |
· |
If you desire to pay some or all of
the subscription price for your shares of Common Stock by delivering indebtedness for borrowed money, you must contact the
Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention:
Jared E. Shure, Chief Administrative Officer, General Counsel & Secretary
Telephone:
(201) 453-7049
as soon as practicable after the date
of this prospectus (and in any event prior to exercising your subscription rights and delivering any indebtedness for borrowed money
in payment therefor) so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness
for borrowed money to be valid and eligible for delivery in payment of some or all of the subscription price and (ii) confirm
the documentation that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for
borrowed money as payment for some or all of the subscription price. As it may take some time for the Company to evaluate and respond
to requests to deliver indebtedness for borrowed money in full or partial payment of the subscription price and for you, thereafter,
to complete and provide the necessary documentation to the Subscription Agent, the Company strongly recommends that you start this
process as soon as possible and not wait until the final days of the Subscription Period. Your delay in commencing this process may
result in your being unable to timely deliver your indebtedness for borrowed money as full or partial payment of the subscription
price, which in turn would result in your purported exercise of Rights to be paid for with such indebtedness for borrowed money being
rejected. |
| No
Board Recommendation |
Although the
Rights Offering has been approved by the Disinterested Directors, neither the Company nor our Board of Directors is making any recommendation
as to whether or not you should exercise your subscription rights. |
| |
|
| No
Revocation |
All exercises of subscription
rights are irrevocable, even if you later learn of information that you consider to be unfavorable to the exercise of your subscription
rights. You should not exercise your subscription rights unless you are certain that you wish to purchase shares of Common Stock
at a subscription price of $9.75 per whole share. |
| |
|
| U.S. Federal Income
Tax Consequences |
Although the authorities
governing transactions such as the Rights Offering are complex and unclear in certain respects (including with respect to the effects
of the over-subscription privilege), we believe and intend to take the position that a holder’s receipt or exercise of rights
should generally be non-taxable for U.S. federal income tax purposes. This position regarding the non-taxable treatment of the Rights
Offering is, however, not binding on the IRS or the courts. You should consult your tax advisor as to the particular tax consequences
to you of the receipt of rights in the Rights Offering and the exercise or lapse of the rights, including the applicability of any
state, local or non-U.S. tax laws in light of your particular circumstances. For a more detailed discussion, see “Material
U.S. Federal Income Tax Consequences”. |
| Issuance
of Our Common Stock |
DRS statements
representing the shares of Common Stock purchased in the Rights Offering will be issued to the record holders as soon as practicable
after the Expiration Date and Time, or such later date as to which the Rights Offering may be extended, and after all necessary
calculations, pro rata allocations and adjustments have been completed. If you hold your shares of Common
Stock in street name through a broker, dealer, custodian bank, or other nominee and you purchase shares of Common Stock in the Rights
Offering, your account with your nominee will be credited with the shares you purchased in the Rights Offering as soon as practicable
after the Expiration Date and Time, or such later date as to which the Rights Offering may be extended, and after all necessary
calculations, pro rata allocations and adjustments have been completed. |
| |
|
| Use of Proceeds |
The Rights Offering
is being made to raise capital for general corporate purposes, and to provide the Company with an opportunity to raise capital and
deleverage and more generally strengthen its balance sheet (including through a reduction of the Company’s indebtedness). See
“Use of Proceeds”. |
| |
|
| Subscription Agent and
Transfer Agent |
Equiniti Trust Company,
LLC. |
| |
|
| Information Agent |
D.F. King & Co., Inc.
If you have any questions or need further information about this Rights Offering, please call the Information Agent at (888) 567-1626. |
| |
|
| Non-Transferability
of Subscription Rights |
The subscription rights
may not be sold, transferred, assigned or given away to anyone, except that the subscription rights will be transferable by
operation of law. The rights will not be listed for trading on any stock exchange or market. |
| |
|
| Financial Advisor |
Roth is acting as our financial
advisor in connection with the Rights Offering. Neither Roth nor any other broker-dealer is acting as an underwriter in the Rights
Offering nor will Roth or any other broker-dealer be obligated to purchase any shares of our Common Stock in the Rights Offering.
We have agreed to pay Roth a $200,000 advisory fee for rendering these services and reimburse Roth for certain expenses incurred
in connection with these services. In addition, we have agreed to indemnify Roth against certain liabilities. |
| |
|
| Shares of Common
Stock Outstanding Before the Rights Offering |
12,784,972 shares
of Common Stock were issued and outstanding as of the Record Date. |
| |
|
| Shares of Common
Stock Outstanding After Completion of the Rights Offering |
We expect 22,015,741
shares of our Common Stock will be outstanding immediately after completion of the Rights Offering, assuming all subscription rights
are exercised in full and no other changes in our shares of Common Stock outstanding after the Record Date. |
| Interests
of Mithaq in the Rights Offering |
As of October 15,
2024, Mithaq beneficially owned approximately 55.1% of the shares of our Common Stock outstanding as of September 5, 2024, based
on disclosures made by Mithaq in its most recent amendment to its Beneficial Ownership Report on Schedule 13D in respect of the Company. Mithaq
has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights distributed to
it and its subsidiary, Snowball, by the Company in the Rights Offering, as well as the over-subscription privilege, and that it currently
intends, but undertakes no obligation, to pay some or all of the subscription price payable upon the exercise of any such subscription
rights directly held by Mithaq with indebtedness for borrowed money owed by the Company to Mithaq (including any indebtedness for
borrowed money then-outstanding pursuant to Mithaq Term Loans). We expect the total subscription price payable upon the exercise
of all of such rights by Mithaq and Snowball, excluding any additional subscription price that might be payable in connection with
any exercise by Mithaq and Snowball of the over-subscription privilege, to be approximately $49,289,077.50. If Mithaq
and Snowball fully exercised their rights in the Rights Offering (including the over-subscription privilege) and no other
holder of rights exercised its rights in the Rights Offering, Mithaq’s beneficial
ownership percentage of our outstanding Common Stock would increase to approximately 73.7% after giving effect to this Rights Offering
and assuming (i) no other changes in our Common Stock outstanding between the Record Date and the Expiration Date and Time and
that (ii) Mithaq continues to beneficially own all of the shares of Common Stock stated to be held by it and Snowball in Mithaq’s
most recent amendment to its Beneficial Ownership Report on Schedule 13D filed in respect of the Company. See “The Rights
Offering – Participation of Our Directors, Executive Officers and Significant Stockholders” and “Risk Factors
– Risks Related to Our Stock and Stock Price – We have a controlling stockholder who, following the Rights Offering,
may continue owning a majority of our outstanding shares of Common Stock, and as a result controls all matters requiring shareholder
approval.” |
| |
|
| Interests of our
Executive Officers and Directors in the Rights Offering |
Messrs. Turki Saleh
A. AlRajhi and Muhammad Asif Seemab, members of the Board of Directors, are also Managing Directors
of Mithaq, and may be deemed to beneficially own all of the shares of Common Stock currently owned by Mithaq and its subsidiary,
Snowball, and any shares of Common Stock which would be acquired by Mithaq and Snowball
upon exercise of their subscription rights in the Rights Offering. More generally, our
directors and executive officers who own shares of Common Stock are permitted, but not required, to participate in the Rights Offering
on the same terms and conditions applicable to all holders of subscription rights. See “The Rights Offering – Participation
of Our Directors, Executive Officers and Significant Stockholders”. |
| |
|
| Risk Factors |
Before you exercise
your subscription rights to purchase our Common Stock, you should carefully consider the risks described in the section entitled
“Risk Factors”, beginning on page 11 of this prospectus. |
RISK
FACTORS
You should carefully consider
the risks and uncertainties described below, together with the information included elsewhere in this registration statement. The risks
and uncertainties described below are those that we deem currently to be material, and do not represent all of the risks that we face.
Additional risks and uncertainties not presently known to us or that we currently do not consider material may in the future become material
and impair our business operations. If any of the following risks actually occur, our business could be materially harmed, our financial
condition, results of operations and prospects could be materially and adversely affected, and the value of our securities could decline
significantly. Please also read carefully the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.
RISKS RELATED TO BUSINESS
STRATEGIES AND GLOBAL OPERATIONS
We depend on generating sufficient cash flows,
together with our existing cash balances and availability under our credit facility, to fund our ongoing operations, capital expenditures,
debt service requirements, and any future share repurchases or payment of dividends.
Our ability to fund our ongoing
operations, capital expenditures, debt service requirements, and any future share purchase programs or payment of dividends will depend
on our ability to generate cash flows. Our cash flows are dependent on, and are affected by, many factors, including:
| · | seasonal
fluctuations in our net sales and net income; |
| · | the
continued operation of our store fleet and e-commerce websites; |
| · | the
timing of inventory purchases for upcoming seasons, such as when to purchase merchandise
for the back-to-school season; |
| · | vendor
and other supplier terms and related conditions, which may be less favorable to us as a smaller
company in comparison to larger companies; and |
| · | consumer
sentiment, general business conditions, including the high levels of inflation experienced
in Fiscal 2023, macroeconomic uncertainties or slowdowns, and geopolitical conditions, including
as a result of events such as acts of terrorism, effects of war, pandemics, or other health
issues. |
Most of these factors are
beyond our control. It is difficult to predict the impact that general economic conditions, including the effects of inflation and geopolitical
conditions, will continue to have on consumer spending and our financial results. However, we believe that they could continue to result
in reduced spending by our target customer, which would reduce our revenues and our cash flows from operating activities from those that
otherwise would have been generated. In addition, steps that we may take to limit cash outlays, such as delaying the purchase of inventory,
may not be successful or could delay the arrival of merchandise for future selling seasons, which could reduce our net sales or profitability.
If we are unable to generate sufficient cash flows, we may not be able to fund our ongoing operations, planned capital expenditures,
debt service requirements, or any future share repurchases, and we may be required to seek additional sources of liquidity as we did
in Fiscal 2023 and are continuing to do so in Fiscal 2024.
We require continued access
to capital and our business and operating results have been and can be affected by factors such as the availability, terms of and cost
of capital, increases in interest rates or a reduction in credit rating. Under the Credit Agreement, we use the ABL Credit Facility to
finance our ongoing operations and our future growth, and some of the aforementioned factors have already affected our business, and
could continue to cause our cost of doing business to increase, limit our ability to pursue business opportunities, reduce cash flow
used for sales and marketing, and place us at a competitive disadvantage. Our historical operating results, including the operational
losses experienced in Fiscal 2023, macroeconomic uncertainties or slowdowns, volatility in the financial markets, significant losses
in financial institutions’ U.S. retail portfolios, or environmental and social concerns, are all factors that may lead to a contraction
in credit availability impacting our ability to finance our operations or our ability to refinance our ABL Credit Facility or other outstanding
indebtedness. Any increase in interest rates could increase our interest expense and materially adversely affect our financial condition.
These increased costs have, and could continue to, reduce our profitability and/or impair our ability to meet our debt obligations and
to conduct ongoing operations. An increase in interest rates also could limit our ability to refinance existing debt upon maturity or
cause us to pay higher rates upon refinancing. A significant reduction in cash flow from operations or the availability of credit could
materially and adversely affect our cash available and our operating results, by inhibiting our ability to conduct ongoing operations
and carry out our development plans.
Furthermore, as a retail
company, we are inherently subject to the risk of inventory loss and theft. These losses may be caused by error or misconduct of associates,
customers, vendors or other third parties, including through organized retail crime and professional theft. Since the onset of the COVID-19
pandemic, the retail industry has generally experienced an increase in inventory shrinkage, and there can be no assurance that the measures
we are taking will effectively reduce inventory shrinkage. Although some level of inventory shrinkage is an unavoidable cost of doing
business, if we were to experience higher rates of inventory shrinkage or incur increased security costs to combat inventory theft, it
could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may not be able to successfully execute
our business strategies.
Our strategic initiatives
currently involve a focus on (i) delivery of product of a quality and value that resonates with our customers, (ii) scaling
and optimizing our infrastructure to support our e-commerce business given the continued shift in our customers’ shopping patterns
to online shopping, and (iii) optimization of our North American retail store fleet.
We will continue to implement
and refine our business systems transformation initiatives designed to increase sales and profitability. Our business transformation
through technology initiative has two key components: digital transformation and inventory management. With respect to digital transformation,
we continue to implement a personalized customer contact strategy and are scaling our digital infrastructure to support increased digital
demand. These initiatives require the execution of complex projects involving significant systems and operational changes, which place
considerable demands on our management and our information and other systems. Our ability to successfully implement and capitalize on
these projects is dependent on management’s ability to manage these projects effectively and implement and operate them successfully,
without adversely affecting the subject and/or other systems, and on our employees’ ability to operationalize the required changes.
If we fail to implement these projects effectively, including aligning them with our sourcing, distribution and logistics operations,
if we experience significant delay, cost overruns, or unforeseen costs, or if the necessary operational changes and change management
are not enacted properly, we may not realize the return on our investments that we anticipate, and we may adversely affect the operation
of other systems, and our business, financial position, results of operations, and cash flows could be materially adversely affected.
We will continue our store
fleet optimization program in Fiscal 2024, which is intended to address the accelerated consolidation of the brick and mortar retail
channel resulting from the COVID-19 pandemic and to increase the profitability of our existing retail store fleet. Since the program
was announced in 2013, we have closed 676 stores, including 90 stores closed in Fiscal 2023. Failure to properly identify or measure
underperforming retail stores, failure to achieve anticipated sales transfer rates from closed stores to remaining retail stores and/or
e-commerce sales, and failure to properly identify and analyze customer segmentation and spending patterns could have a material adverse
effect on our business, financial position, results of operations, and cash flows. In addition, pursuant to U.S. GAAP, we are required
to recognize an impairment charge when circumstances indicate that the carrying value of long-lived assets may not be recoverable. If
a determination is made that the carrying value of a long-lived asset is not recoverable over its estimated useful life, the asset is
written down to its estimated fair value.
Consumer demand, behavior,
taste, and purchasing trends, as well as geopolitical conflicts and economic and political stability may differ in international markets
and/or in the distribution channels through which our wholesale customers sell products, and, as a result, sales of our products may
not be successful or meet our expectations, or the margins on those sales may not be in line with those we currently anticipate. We may
also face difficulties integrating foreign business operations and/or wholesaling operations with our current sourcing, distribution,
information technology systems, and other operations. In addition, our expanded marketing and advertising strategies to promote sales,
including the sponsorship of sweepstakes, contests and donations, and an increased online presence through collaborations with social
media influencers, may not generate sufficient interest in our products while exposing us to other risks. Any of these challenges could
hinder our success in new and existing markets or new and existing distribution channels. There can be no assurance that we will successfully
complete any planned expansion or that any new business will be profitable or meet our expectations.
In addition, a wholly-owned
subsidiary of the Company acquired certain intellectual property and related assets of Gymboree Group, Inc. and related entities,
including worldwide rights to the name “Gymboree”. We have relaunched the Gymboree brand to expand our business across our
retail stores, e-commerce, international, and wholesale businesses. We also launched the Sugar & Jade brand in November 2021
and launched the PJ Place brand in October 2022. The positioning of the Gymboree, Sugar & Jade and PJ Place brands and
their products, relative to our existing products, the fashion choices we make with respect to our products, and our ability to integrate
the Gymboree, Sugar & Jade and PJ Place brands and their products into our existing marketing, sourcing, inventory, sales/e-commerce,
customer relations, and logistics operations and systems will be critical to our ability to leverage all of these brands to expand our
business.
In addition, pursuant to
U.S. GAAP, we are required to recognize an impairment charge when circumstances indicate that the carrying value of our indefinite-lived
Gymboree tradename asset may not be recoverable. If a determination is made that the carrying value of the Gymboree tradename asset is
not recoverable, the asset is written down to its estimated fair value. In Fiscal 2023, we recorded an impairment charge of $29.0 million
on the Gymboree tradename, primarily due to an increase in the discount rate used to value the tradename and reductions in Gymboree sales
forecasts.
A failure to properly execute
our plans and business strategies, delays in executing our plans and business strategies, increased costs associated with executing on
our plans and business strategies, or failure to identify alternative strategies could have a material adverse effect on our business,
financial position, results of operations, and cash flows.
A wide variety of factors can cause a decline
in consumer confidence and spending which could have a material adverse effect on the retail and apparel industries and our business,
financial position, results of operations, and cash flows.
The apparel industry is cyclical
in nature and is particularly affected by adverse trends in the general economy. Purchases of apparel and related merchandise are generally
discretionary and, therefore, tend to decline during recessionary, inflationary and weak economic periods and also may decline at other
times. This is particularly true with our target customer who is a value conscious, lower to middle income mother buying for infants
and children based on need rather than based on fashion, trend, or impulse. High inflation, high unemployment levels, increases in tax
rates, declines in real estate values, availability of credit, volatility in the global financial markets, and the overall level of consumer
confidence have negatively impacted, and could in the future negatively impact, the level of consumer spending for discretionary items.
This could adversely affect our business as it is dependent on consumer demand for our products. In North America, we have experienced
and continue to experience a decrease in customer traffic, including at shopping malls, and a highly promotional environment. If the
current macroeconomic environment deteriorates further, there will likely be a negative effect on our revenues, operating margins, and
earnings which could have a material adverse effect on our business, financial position, results of operations, and cash flows.
In addition to the economic
environment, there are a number of other factors that could contribute to reduced customer traffic and/or reduced levels of consumer
confidence and spending, such as actual or potential terrorist acts, including domestic terrorism, natural disasters, severe weather,
pandemics or other health issues, political disruption, war, or geopolitical conflicts. These occurrences create significant instability
and uncertainty in the United States and elsewhere in the world, causing consumers to defer purchases or to not shop in retail stores
in shopping malls, or preventing our suppliers and service providers from providing required products, services, or materials to us.
These factors could have a material adverse effect on our business, financial position, results of operations, and cash flows.
Fluctuations in the prices of raw materials,
labor, energy, and services could result in increased product and/or delivery costs. Our profitability and cash flows may decline as
a result of increasing pressure on margins.
The apparel industry is subject
to significant pricing pressure caused by many factors, including intense competition, the highly promotional retail environment, the
financial health of competitors, changes in consumer demand, and macroeconomic conditions. If these factors cause us to reduce our sales
prices and we fail to sufficiently reduce our product costs or operating expenses, our profitability and cash flows could decline.
Increases in the price of
raw materials, including cotton and other materials used in the production of fabric, clothing, footwear, and accessories, as well as
volatility and increases in labor (including increases in minimum wages and wage rates as a result of changes in laws or business practices),
energy, shipping or distribution costs, pandemics or other health issues, and other costs, have resulted, and could continue to result,
in significant increases in operating costs, as well as cost increases for our products and their importation from our foreign sources
of supply and their distribution to our and our third-party partners’ distribution centers, retail locations, international franchise
partners, and wholesale and retail customers. To the extent we are unable to offset any such increased costs through value engineering
or price increases, such increased costs could have a material adverse effect on our business, financial position, results of operations,
and cash flows.
In addition, a shortage of
labor or an increase in the cost of labor for our retail stores and/or such distribution centers could also have a material adverse effect
on our business, financial position, results of operations, and cash flows.
Damage to, or a prolonged interruption of
activities at, any facility that we use in our business operations could have a material adverse effect on our business.
Our single U.S. corporate
headquarters is located in Secaucus, New Jersey. One of our company-operated distribution centers is located in Fort Payne, Alabama and
supports our U.S. stores, wholesale, and e-commerce shipments in the U.S. We had another company-operated distribution center located
in Mississauga, Ontario, which supported all of our store fulfillment activities in Canada. Its lease expired in April 2024 and
we moved these operations to the United States to our current distribution center in Alabama as of the end of the first quarter of Fiscal
2024. We also use a third-party warehouse provider, with distribution centers located in Brownsburg, Indiana, to support our U.S.
e-commerce operations, and Mississauga, Ontario to support our Canadian e-commerce operations. Our international franchise partners receive
the vast majority of shipments of merchandise from our third-party warehouse provider located in Asia. On occasion, we may utilize additional
facilities to support our seasonal warehousing needs. Damage to, or prolonged interruption of operations at, any of the Company-operated
or third-party facilities due to a work stoppage, pandemics or other health issues, weather conditions such as a tornado, hurricane or
flood, other natural disaster, fire, or other event could have a material adverse effect on our business, financial position, results
of operations, and cash flows.
We depend on our relationships with unaffiliated
manufacturers, suppliers, and transportation companies, both domestically and internationally. Our inability to maintain relationships
with any of these entities, the disruption to or failure of any of their businesses, their failure to operate in a lawful or ethical
manner, and the risks associated with international business, could have a material adverse effect on our business, financial position,
results of operations, and cash flows.
We do not own or operate
any manufacturing facilities and, therefore, are dependent upon independent third parties for the manufacture of all of our products.
The vast majority of our products are currently manufactured to our specifications, pursuant to purchase orders, by independent manufacturers
located primarily in Asia and Africa. We have no exclusive or long-term contracts with our manufacturers. We compete with other companies
for manufacturing facilities, many of which have greater financial resources than we have or pay a higher unit price than we do. If an
existing manufacturer of merchandise must be replaced for any reason, we will have to find alternative sources of manufacturing or increase
purchases from our other third-party manufacturers, and there is no assurance we will be able to do so or do so on terms that are acceptable
to us.
We do not use commissioned
buying agents to source any products. Although we believe that we have the in-house capability to more efficiently source all of our
products, our inability to do so, or our inability to find adequate sources to support our current needs for merchandise and future growth,
could have a material adverse effect on our business, financial position, results of operations, and cash flows.
Our merchandise is shipped
directly from manufacturers through third-party logistics providers to our or our third-party providers’ distribution and fulfillment
centers, and in turn, to our stores, our e-commerce customers, and our international franchise partners and wholesale customers. Our
operating results depend, in material part, on the orderly, timely, and accurate operation of our shipping, receiving, and distribution
processes, which depends, in material part, on our manufacturers’ adherence to shipping schedules, the availability of ships, shipping
containers and shipping routes, and our third-party providers’ effective management of our domestic and international shipping
functions, distribution processes, facilities, and capacity.
If our agents, manufacturers,
suppliers or freight operators experience negative financial consequences, our inability to use or find substitute providers to support
our manufacturing and distribution needs in a timely manner could have a material adverse effect on our business, financial position,
results of operations, and cash flows.
Additionally, given that
virtually all of our merchandise is purchased from foreign suppliers, we are subject to various risks of doing business in foreign markets
and importing merchandise from abroad, including from less politically or socially stable and/or less developed countries, such as:
| · | new
tariffs or imposition of duties, taxes, and other charges on or costs of relying on imports; |
| · | foreign
governmental regulations, including, but not limited to, changing requirements in the course
of dealing with regard to product safety, product testing, environmental matters, employment,
taxation, and language preference; |
| · | the
failure of a direct or indirect vendor or supplier to comply with local laws or industry
standards or ethical business practices, including worker safety (e.g., fire safety
and building codes), worker rights of association, freedom from harassment and coercion,
unauthorized subcontracting or use of forced, indentured or child labor, social compliance
with health and welfare standards, and environmental matters; |
| · | financial,
political, or societal instability, or military action, war or other conflict; |
| · | the
rising cost of doing business in particular countries; |
| · | pandemics
or other health issues; |
| · | bankruptcy
or insolvency of our vendors; |
| · | fluctuation
of the U.S. dollar against foreign currencies; |
| · | pressure
from or campaigns by non-governmental organizations or other persons, including on social
media; |
| · | customer
acceptance of foreign produced merchandise; |
| · | developing
countries with less or inadequate infrastructure; |
| · | new
and existing legislation relating to use of forced, indentured or child labor by unaffiliated
manufacturers or suppliers, import quotas or other restrictions that may limit or prevent
the import of our merchandise; |
| · | changes
to, or repeal, suspension or discontinuation of, trade agreements, trade legislation and/or
trade preferences; |
| · | significant
delays in the manufacture, transportation and delivery of cargo due to epidemics or pandemics,
port security considerations, political unrest, war, weather conditions, or cyber-security
events; |
| · | disruption
of imports by labor disputes and local business or unethical practices; |
| · | regulations
under the United States Foreign Corrupt Practices Act; and |
| · | increased
costs of or shortages of equipment, containers for shipments, or transportation. |
In addition to the above,
it is possible that other events beyond our control, both domestically and internationally, such as labor disputes, cybersecurity events
or allegations of misconduct or unethical behavior affecting our unaffiliated manufacturers, suppliers, or transportation companies,
a terrorist or similar act, military action, strike, weather conditions, natural disasters, pandemics or other health issues, or government
spending cuts, could result in delays or disruptions in the production, transportation and/or delivery of merchandise to our distribution
centers or our stores, international franchise partners and wholesale customers, or the fulfillment of e-commerce orders to our customers,
or require us to incur substantial additional costs, including in air freight, to ensure timely delivery. Any such event could have a
material adverse effect on our business, financial position, results of operations, and cash flows.
In an attempt to mitigate
the above risks within any one region or one country, we maintain relationships with many manufacturers and suppliers in various countries.
We cannot predict the effect that this, or the other factors noted above, in any region or country from which we import products could
have on our business. If any of these factors rendered the conduct of business in a particular region or country undesirable or impractical,
or if our current foreign manufacturing and supply sources ceased doing business with us or we ceased doing business with them for any
reason and we were unable to find alternative sources of supply, we could experience a material adverse effect on our business, financial
position, results of operations, and cash flows.
Our vendor guidelines and
code of conduct are designed to promote compliance with applicable law and industry standards and ethical business practices. We monitor
our vendors’ practices; however, we do not control these independent manufacturers, their business practices, their labor
practices, their health and safety practices, the physical condition of their factories, worker dormitories or other facilities, the
integrity of their information or other business systems, or from where they buy or otherwise source their raw materials or labor. The
failure of our third-party manufacturers or suppliers, which we do not control, to address the risks described above, could result in
accidents and practices that cause material disruptions or delays in production or delivery, the imposition of governmental penalties
or restrictions, and/or material harm to our reputation, any of which could have a material adverse effect on our business, financial
position, results of operations, and cash flows.
We may experience disruptions at ports used
to export our products from Asia, Africa, and other regions, or along the various shipping routes, or used as ports of entry in the United
States and Canada.
We currently ship the vast
majority of our products by ocean. If a disruption occurs in the operation of ports through which our products are exported or imported,
or along the various shipping routes, we and our vendors may have to ship some or all of our products from Asia, Africa, and other regions
by air freight or to or from alternative shipping destinations in the United States or in foreign countries. Shipping by air is significantly
more expensive than shipping by ocean and our profitability could be materially reduced. Similarly, shipping to or from alternative destinations
could lead to significantly increased costs for our products. A disruption at ports (domestic or abroad) through which our products are
exported or imported or along the various shipping routes could have a material adverse effect on our business, financial position, results
of operations, and cash flows.
Because certain of our subsidiaries operate
outside of the United States, some of our revenues, product costs, and other expenses are subject to foreign economic and currency risks.
We have store operations
in Canada, a sourcing office in Hong Kong, sourcing operations in various locations in Asia and Africa, and store operations internationally
through franchisees.
The currency market has seen
significant volatility in the value of the U.S. dollar against other foreign currencies. While our business is primarily conducted in
U.S. dollars, we purchase virtually all of our products overseas, and we generate significant revenues in Canada in Canadian dollars.
Cost increases caused by currency exchange rate fluctuations could make our products less competitive or have a material adverse effect
on our profitability. Currency exchange rate fluctuations could also disrupt the business of the third-party manufacturers that produce
our products, or franchisees that purchase our products, by making their purchases of raw materials or products more expensive and more
difficult to finance.
Changes in currency exchange
rates affect the U.S. dollar value of the Canadian dollar denominated prices at which our Canadian business sells product. As a result,
fluctuations in exchange rates impact the amount of our reported sales and expenses, which could have a material adverse effect on our
business, financial position, results of operations, and cash flows. Additionally, we have foreign currency denominated receivables and
payables that are not hedged against foreign currency fluctuations. When settled, these receivables and payables could result in significant
transaction gains or losses.
Acts of terrorism, effects of war, pandemics
or other health issues, natural disasters, other catastrophes, or political unrest could have a material adverse effect on our business.
Threatened or actual acts
of terrorism, including U.S. domestic terrorism, continue to be a risk to the U.S. and global economies. Terrorism and potential military
responses, political unrest, war and other conflicts, natural disasters, pandemics or other health issues, have disrupted and could disrupt
commerce and impact our or our franchisees’ ability to operate our stores in affected areas, produce our products in foreign countries,
import our products from foreign countries, or provide critical functions necessary to the operation of our business. A disruption of
commerce, or an inability to recover critical functions from such a disruption, could interfere with the production, shipment, or receipt
of our merchandise in a timely manner or increase our costs to do so. Consequently, any such disruption could undermine consumer confidence,
which could negatively impact consumer spending patterns or customer traffic, and thus have a material adverse effect on our business,
financial position, results of operations, and cash flows.
We have franchise partners
located in Middle Eastern countries. When the current Israel-Palestine conflict began, our franchise partner in Israel had to shutter
its stores temporarily. We are currently also providing a temporary hiatus on the collection of royalty payments from this franchise
partner until December 2024. If the conflict continues or expands further into other countries, it could adversely affect our sales
with this franchise partner and all other franchise partners in Middle Eastern countries, and it could have a material adverse effect
on our business, financial position, results of operations, and cash flows.
Our success depends upon the service and capabilities
of our management team. Changes in management or in our organizational structure, particularly in the most senior positions, or inadequate
or ineffective management, could have a material adverse effect on our business.
Our business and success
are materially dependent on retaining members of our senior leadership team, including our chief
executive officer, and other key individuals within the organization, to formulate and execute the Company’s strategic and
business plans. Leadership changes can be inherently difficult to manage and may cause material disruption to our management team or
our business operations and financial results.
Senior level management establishes
the “tone at the top” by which an environment of ethical values, operating style, and management philosophy is fostered.
Changes in senior management could lead to an environment that lacks inspiration and/or a lack of commitment by our employees, which
could have a material adverse effect on our business.
Any disruption in, or changes to, our consumer
credit arrangements, including our private label credit card agreement, may adversely affect the ability of our customers to obtain consumer
credit.
Credit card operations are
subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, and enforcement
of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider, such as the Consumer
Financial Protection Bureau’s recent amendment to Regulation Z to limit the dollar amounts credit card companies can charge for
late fees, which we expect could have a material adverse effect on the income and cash flow from our private label credit card program.
Additionally, during periods
of increasing consumer credit delinquencies, financial institutions may reexamine their lending practices and procedures. There can be
no assurance that the delinquencies being experienced by providers of consumer credit generally would not cause providers of third-party
credit offered by us to decrease the availability of, or increase the cost of, such credit.
Any of the above risks, individually
or in aggregation, could have a material adverse effect on the way we conduct business and could materially negatively impact our business,
financial position, results of operations, and cash flows.
We are subject to customer payment-related
risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt
our business.
We accept payments using
a variety of methods, including cash, checks, credit and debit cards, Afterpay, ApplePay, PayPal, our private label credit card, and
gift cards. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements,
including payment card association operating rules, certification requirements and operating guidelines, data security standards and
certification requirements, and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted,
making compliance more difficult or costly. Although no system can completely prevent theft, security countermeasures have been deployed
to reduce the potential for fraud and theft by criminals. If we fail to comply with applicable rules and regulations, we may be
subject to fines or higher transaction fees and may lose our ability to accept online payments or other payment card transactions. If
any of these events were to occur, our business, financial position, results of operations, and cash flows could be adversely affected.
RISKS
RELATED TO THE RETAIL AND APPAREL INDUSTRIES
We may suffer material adverse business consequences
if we are unable to anticipate, identify, and respond to merchandise trends, marketing and promotional trends, changes in technology,
or customer shopping patterns. Profitability and our reputation could be materially negatively impacted if we do not adequately forecast
the demand for our products and, as a result, create significant levels of excess inventory or insufficient levels of inventory.
The apparel industry is subject
to rapidly changing fashion trends and shifting consumer preferences, including the increase in online shopping. Our success depends,
in material part, on the ability of our design, merchandising and IT teams to anticipate and respond to these changes for our brands
and our global sourcing team to source from vendors that produce merchandise which has a compelling quality and value proposition for
our customers. Our design, manufacturing, and sourcing process generally takes up to one year, during which time fashion trends and consumer
preferences may further change. If we miscalculate either the demand for our merchandise or our customers’ tastes or purchasing
habits, we could experience materially increased costs and lower selling prices due to a need to dispose of excess inventory. Conversely,
if we forecast demand for our products that is lower than actual demand, we may experience insufficient levels of inventory, increased
costs to fulfill demand from alternative locations of inventory, and reputational damage. Further, it is necessary to develop and implement
uses and scaling of technology addressing changes in customer buying behaviors and/or successful customer marketing programs, including
loyalty and private label credit card programs and “buy-now-pay-later” programs. Failure to address any of the above risks
could have a material adverse effect on our business, financial position, results of operations, and cash flows.
Product liability costs, related claims, and
the cost of compliance with consumer product safety laws in the U.S. and in Canada or our inability to comply with such laws could have
a material adverse effect on our business and reputation.
We are subject to regulation
by the Consumer Product Safety Commission (“CPSC”) in the U.S., Health Canada in Canada, and similar state, provincial,
and international regulatory authorities. Although we test the products sold in our stores, on our website, and to our international
franchise partners and our wholesale customers, concerns about product safety, including, but not limited to, concerns about those manufactured
in developing countries, may lead us to recall selected products, either voluntarily or at the direction of a governmental authority,
and may lead to a lack of consumer acceptance or loss of consumer trust. Product safety concerns, recalls, or the failure to properly
manage recalls, defects, or errors could result in governmental fines, rejection of our products by customers, damage to our reputation,
lost sales, product liability litigation, and increased costs, any or all of which could harm our business and have a material adverse
effect on our business, financial position, results of operations, and cash flows.
The cost of compliance with
current requirements and any future requirements of the CPSC, Health Canada, or other federal, state, provincial, or international regulatory
authorities, consumer product safety laws, including initiatives labeled as “green chemistry” and regulatory testing, certification,
packaging, labeling, and advertising and reporting requirements, or changes to existing laws could have a material adverse effect on
our business, financial position, results of operations, and cash flows. In addition, any failure to comply with such requirements could
result in significant penalties, litigation, or require us to recall products, any or all of which could have a material adverse effect
on our business, reputation, financial position, results of operations, and cash flows.
We face significant competition in the retail
and apparel industries, which could negatively impact our business.
The children’s apparel
retail market is highly competitive, and we face heightened price and promotional competition. We compete in substantially all of our
markets with Target Corporation, Old Navy, GapKids, and babyGap (each of which is a division of The Gap, Inc.), Carter’s, Inc.,
T.J. Maxx and Marshall’s (each of which is a division of TJX Companies, Inc.), Burlington Coat Factory, Inc., Kohl’s
Corporation, Walmart Stores, Inc., and other department stores. We also compete with a wide variety of specialty stores, other national
and regional retail chains, catalog companies, and e-commerce retailers, including Amazon. One or more of our competitors are present
in virtually all of the areas in which we have stores. E-commerce only retailers generally do not incur the geographical limitations
suffered by traditional brick and mortar stores, giving e-commerce only retailers a competitive advantage to and imposing significant
pricing pressure on brick and mortar stores. In addition, while we view our business as a single omni-channel business, our e-commerce
stores may divert sales from our brick and mortar stores. Many of our competitors are larger than us and have access to significantly
greater financial, marketing, and other resources than we have. Increased competition, increased promotional activity, continuing economic
pressure on and inflation affecting value-seeking consumers, and liquidation activities by bankrupt and other struggling retailers, including
selling apparel, footwear, and accessory merchandise at substantial discounts, could also have a material adverse effect on our ability
to compete successfully, and could have a material adverse effect on our business, reputation, financial position, results of operations,
and cash flows. We may not be able to continue to compete successfully against existing or future competition.
If our landlords should suffer financial difficulty
or if we are unable to successfully negotiate acceptable lease terms, it could have a material adverse effect on our business, financial
position, results of operations, and cash flows.
If any of our landlords or
their substantial tenants, such as anchor department stores, should suffer financial difficulty, it could render our landlords unable
to fulfill their duties under our lease agreements and/or could render certain malls to experience reduced customer traffic. Such duties
include providing a sufficient number of mall co-tenants, common area maintenance, utilities, and payment of real estate taxes. While
we have certain remedies under our lease agreements, the loss of business that could result if a shopping center should close or if customer
traffic were to significantly decline as a result of lost tenants or improper care of the facilities or due to macroeconomic effects,
including inflation, could have a material adverse effect on our business, financial position, results of operations, and cash flows.
The leases for a substantial
number of our retail stores come up for renewal each year. If we are unable to continue to negotiate acceptable lease and renewal terms,
it could have a material adverse effect on our business, financial position, results of operations, and cash flows.
RISKS
RELATED TO OUR STOCK AND STOCK PRICE
Changes in our sales, comparable retail sales,
margins, operating income, earnings per share, cash flows, and/or other results of operations could have a material adverse effect on
the market price of our Common Stock, which subsequently could lead to litigation.
Numerous factors affect our
sales, comparable retail sales, margins, operating income, earnings per share, cash flows, and other financial results, including unseasonable
weather conditions, merchandise assortment and product acceptance, the retail price of our merchandise, fashion trends, customer traffic,
number of visits to our e-commerce site, as well as related conversion, economic conditions in general, including inflation and consumer
confidence, and the retail sales environment in particular, calendar shifts of holidays or seasonal periods, birth rate fluctuations,
timing or extent of promotional events by our Company or by competitors and other competitive factors, including competitor bankruptcies,
fluctuations in currency exchange rates, macro-economic conditions, and our success in and the cost of executing our business strategies.
Unseasonable weather, for
example, warm weather in the winter or cold weather in the spring over an extended period of time, or the occurrence of frequent or severe
storms, may adversely affect our sales and, therefore, our comparable retail sales, operating income and earnings per share. The nature
of our target customer heightens the effects of unseasonable weather on our sales. Our target customer is a value conscious, lower to
middle income mother buying for infants and younger children primarily based on need rather than based on fashion, trend, or impulse.
Therefore, for example, our
target customer may not purchase warm weather spring clothing during an extended period of unseasonably cold weather occurring in what
otherwise should be warmer weather months, particularly since infants and younger children tend to outgrow clothing at a faster rate
than older children and adults.
Our sales, comparable retail
sales, margins, operating income, earnings per share, cash flows, and other financial results have fluctuated significantly in the past
(including during Fiscal 2023) due to the factors cited above, and we anticipate that they may continue to fluctuate in the future, particularly
in the highly competitive retail environment in which we operate, which may result in declines or delays in consumer spending. The investment
and analyst community follows all of these financial markers closely and fluctuations in these results, or the failure of our results
to meet investors’ or analysts’ models or expectations, have had, and may continue to have, a significant adverse effect
on the price of our Common Stock.
Following any such change
in the price of our Common Stock, we have, and could in the future, be subject to litigation from our stockholders. For example, in February 2024,
a putative class action was filed against us for violations of federal securities laws in the United States District Court of New Jersey.
The complaint purported to assert claims under the federal securities laws, alleging that we had made materially false and/or misleading
statements, and failed to disclose material adverse facts to our investors such that the price of our Common Stock dropped as a result.
See “Item 3. Legal Proceedings” of the Form 10-K for further information. Any adverse results and/or settlements
from such litigation could have a material adverse effect on our business, financial position, results of operations, and cash flows.
We have a controlling stockholder who, following
the Rights Offering, may continue owning a majority of our outstanding shares of Common Stock, and as a result controls all matters requiring
shareholder approval.
Mithaq owns and controls
the voting power of approximately 55.1% of the shares of our Common Stock outstanding as of October 15, 2024, based on disclosures
made by Mithaq in its most recent amendment to its Beneficial Ownership Report on Schedule 13D in respect of the Company, and Mithaq
is expected to continue to own and control more than a majority of our outstanding shares of Common Stock following the Rights Offering.
As long as Mithaq continues to control a majority of outstanding shares of our Common Stock, it will be able to determine the outcome
of all corporate actions requiring stockholder approval.
Mithaq and its affiliates
engage in a broad spectrum of activities. In the ordinary course of their business activities, Mithaq and its affiliates may engage in
activities where their interests may not be the same as, or may conflict with, our interests or the interests of our other stockholders.
Other stockholders will not be able to affect the outcome of any stockholder vote while Mithaq controls the majority of the voting power
of our outstanding shares of Common Stock. As a result, Mithaq will be able to control, directly or indirectly and subject to applicable
law, the composition of our Board of Directors, which in turn will be able to control all matters over which we have control, including,
among others:
| · | any
determination with respect to our business direction and policies, including the appointment
and removal of officers and directors; |
| · | the
adoption of amendments to our certificate of incorporation or our bylaws; |
| · | any
determinations with respect to financing, mergers, business combinations or dispositions
of assets; |
| · | our
financing and dividend policy, and the payment of dividends on our Common Stock, if any; |
| · | compensation
and benefit programs and other human resources policy decisions; |
| · | changes
to any other agreements that may adversely affect us; and |
| · | determinations
with respect to tax matters. |
Because Mithaq’s interests
may differ from ours or from those of our other stockholders, Mithaq’s decisions on these matters may be contrary to other stockholders’
expectations or preferences, and they may take actions that could be contrary to other stockholders’ interests. So long as Mithaq
beneficially owns a majority of our outstanding shares of Common Stock, it will be able to control the outcome of all corporate actions
requiring stockholder approval.
Our share price may be volatile.
Our Common Stock is quoted
on Nasdaq. Stock markets in general have experienced, and are likely to continue to experience, price and volume fluctuations, which
could have a material adverse effect on the market price of our Common Stock without regard to our operating performance. In addition,
we believe that factors such as quarterly fluctuations in our financial results, other risk factors identified here, announcements or
actions by other competitors, the overall economy, legislative, regulatory and other actions resulting from the Presidential administration
or U.S. Congress, and the geopolitical environment could individually or in aggregation cause the price of our Common Stock to fluctuate
substantially.
We have experienced, and
may experience, large “short” positions in our Common Stock relative to other publicly traded companies in our industry.
The existence of a relatively large short position may result in substantial volatility in the trading price of our Common Stock, including
due to an adverse impact on investors’ and analysts’ perceptions of our business and its prospects or due to “short
covering” (relatively large purchases of our Common Stock). Purchasers of our Common Stock during periods of volatility, including
as a result of “short covering” when the price of our Common Stock may rise rapidly, could later experience a significant
decrease in stock price, eventually leading to a significant loss in value.
Declarations of quarterly
cash dividends, and the establishment of future record and payment dates, are at the discretion of our Board of Directors based on a
number of factors, including future financial performance, general business and market conditions, and other investment priorities. If
payment of dividends is resumed, any subsequent reduction or discontinuance by us of the payment of quarterly cash dividends could cause
the market price of our Common Stock to decline.
We have no current plans to pay regular cash
dividends on our Common Stock for the foreseeable future.
We have no current plans
to pay regular cash dividends on our Common Stock for the foreseeable future. Declarations of cash dividends, and the establishment of
future record and payment dates, are at the discretion of our Board of Directors based on a number of factors, including future financial
performance, general business and market conditions, and other investment priorities. If payment of dividends is resumed, any subsequent
reduction or discontinuance by us of the payment of quarterly cash dividends could cause the market price of our Common Stock to decline.
Our actual operating results may not meet
or exceed our guidance and investor expectations, which would likely cause our stock price to decline.
From time to time, we may
release guidance in our earnings releases, earnings conference calls or otherwise, regarding our future performance that represent our
management’s estimates as of the date of release. If given, this guidance, which will include forward-looking statements, will
be based on projections prepared by our management. Projections are based upon a number of assumptions and estimates that, while presented
with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies,
many of which are beyond our control. Our actual results could differ materially from such projections. Factors that could cause or contribute
to such differences include, but are not limited to, those identified in this “Risk Factors” section. The principal
reason that we expect to release guidance is to provide a basis for our management to discuss our business outlook with analysts and
investors. With or without our guidance, analysts and other investors may publish expectations regarding our business, financial performance
and results of operations. Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions
of the guidance furnished by us will not materialize or will vary significantly from actual results. If our actual performance does not
meet or exceed our guidance or investor expectations, the trading price of our Common Stock may decline.
An active, liquid trading market for our Common
Stock may not be sustained.
Although our Common Stock
is currently listed on Nasdaq under the symbol “PLCE”, an active trading market for our shares may not be sustained. Accordingly,
if an active trading market for our Common Stock is not sustained, the liquidity of our Common Stock would be limited, and holders of
our Common Stock may not be able to sell their shares when desired. Moreover, the prices that they may obtain for their shares would
be adversely affected. An inactive market may also impair our ability to raise capital to continue to fund operations by issuing shares
and may impair our ability to acquire other companies by using our shares as consideration.
If securities or industry analysts do not
publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results
of operations do not meet their expectations, our stock price and trading volume could decline.
The trading market for our
shares is influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have
any control over these analysts. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we
could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if
one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our stock
price could decline.
RISKS
RELATED TO CYBERSECURITY, DATA PRIVACY, INFORMATION TECHNOLOGY AND E-COMMERCE
A privacy breach, through a cybersecurity
incident or otherwise, or failure to comply with privacy laws could have a material adverse effect on our business.
As part of normal operations,
we and our third-party vendors, consultants and other partners receive and maintain confidential and personally identifiable information
about our customers and employees, and confidential financial, intellectual property, and other proprietary information. We regard the
protection of our customer, employee, and Company information as critical. The regulatory environment surrounding information security
and privacy is very demanding, with the frequent imposition of new and changing significant requirements, such as the California Consumer
Privacy Act and the California Privacy Rights Act, and more recently, the Virginia Consumer Data Protection Act, the Colorado Privacy
Act, the Connecticut Data Privacy Act and the Utah Consumer Privacy Act, some of which involve significant costs to implement and significant
penalties if not followed properly. A significant breach of federal, state, provincial, local, or international privacy laws could have
a material adverse effect on our business, reputation, financial position, results of operations, and cash flows.
A cybersecurity breach, whether
targeted, random, or inadvertent, and whether at the hands of cyber criminals, hackers, rogue employees, hostile agents of foreign governments,
or other persons, may occur and could go undetected for a period of time. Any cybersecurity incident could result in any or all of the
following:
| · | theft,
destruction, loss, misappropriation, or release of confidential financial and other data,
intellectual property, customer awards or loyalty points, or customer, employee or vendor
information, including personally identifiable information such as payment card information,
bank account information, email addresses, passwords, social security numbers, home addresses,
or health information; |
| · | operational
or business delays resulting from the disruption of our e-commerce site, computer network,
or the computer networks of our third-party vendors, consultants and other partners and subsequent
material clean-up and mitigation costs and activities; |
| · | negative
publicity resulting in material reputation or brand damage with our investors, customers,
vendors, third-party partners, or industry peers; |
| · | loss
of sales, including those generated through our e-commerce websites; and |
| · | governmental
penalties, fines and/or enforcement actions, payment and industry penalties and fines, and/or
class action and other lawsuits. |
Our efforts and technology
to secure our computer network and systems may not be sufficient to defend us against all unauthorized attempts to access our employees’,
customers’, vendors’ and/or our information. We have been and may be subject to attempts to gain unauthorized access to our
computer network and systems, including emails. Similarly, a breach to the computer networks and systems of our third-party vendors,
consultants or other partners, including those that are cloud-based, may also occur. Any such breach could lead to a material disruption
of our computer network and/or the areas of our business dependent on the support, services, and other products provided by these third-party
vendors, consultants and other partners, subsequently resulting in the events described above. To date, prior attempts to gain unauthorized
access to the networks and systems of the Company, our third-party vendors, consultants or other partners have not had a material adverse
effect on us.
Our systems and procedures
are required to meet the Payment Card Industry (“PCI”) data security standards, which require periodic audits by independent
third parties to assess compliance. Failure to comply with the security requirements or rectify a security issue may result in substantial
fines and the imposition of material restrictions on our ability to accept payment by credit or debit cards. There can be no assurance
that we will be able to satisfy PCI security standards or to identify security issues in a timely fashion. In addition, PCI are controlled
by a limited number of vendors who have the ability to impose changes in PCI’s fee structure and operational requirements on us
without negotiation. Such changes in fees and operational requirements may result in our failure to comply with PCI security standards,
as well as significant unanticipated expenses.
Any of the above risks, individually
or in aggregation, could result in significant costs and/or materially damage our reputation and result in lost sales, governmental and
payment card industry fines, and/or class action and other lawsuits, which in turn could have a material adverse effect on our business,
financial position, results of operations, and cash flows. Although we carry cybersecurity insurance, in the event of a cyber-incident,
that insurance may not be extensive enough or adequate in scope of coverage or amount to reimburse us for damages we may incur.
Our failure to successfully manage our e-commerce
business could have a material adverse effect on our business.
The successful operation
of our e-commerce business depends on our ability to conduct an efficient and uninterrupted operation of our online order-taking and
our fulfillment operations, whether from our distribution center or from our third-party providers, and on our ability to provide a shopping
experience that will generate orders and return visits to our site, including by updating our e-commerce platform to stay abreast of
changing consumer shopping habits, such as the significantly increased use of mobile devices and apps to shop online. Risks associated
with our e-commerce business include:
| · | risks
associated with the failure of the computer systems that operate our website or the failure
or disruption of our information technology and other business systems, including, but not
limited to, inadequate system capacity, security breaches, computer viruses, human error,
changes in programming, failure of third parties to continue to support older systems or
system upgrades, or unintended disruptions occasioned as a result of such upgrades, or migration
of these services to new systems, including to the cloud; |
| · | increased
or unplanned costs associated with order fulfillment and delivery of merchandise to our customers; |
| · | inadequacy
of disaster recovery processes and the failure to align these processes with business continuity
plans; |
| · | the
integration of the Gymboree brand in our stores and via our e-commerce website, the continued
progress of our Sugar & Jade and PJ Place brands; |
| · | consumer
privacy and information security concerns and regulation; |
| · | changes
in applicable federal, state, provincial, local, or international regulations; |
| · | disruptions
in telephone service or power outages; |
| · | reliance
on third parties for computer hardware and software, cloud-based computing services, updates
(patches), as well as delivery of merchandise to our customers; |
| · | rapid
technology changes and changes in consumer shopping habits, such as the significant increase
in online shopping, including through the use of mobile devices and apps; |
| · | credit
or debit card fraud; |
| · | the
diversion of sales from our physical stores; |
| · | natural
disasters or adverse weather conditions; |
| · | negative
publicity related to the social media influencers we have engaged; |
| · | negative
customer reviews or influencer reviews on social media; and |
| · | liability
for online advertising and content. |
Problems in any one or more
of these areas, individually or in aggregation, could have a material adverse effect on our business, financial position, results of
operations, and cash flows, and could damage our reputation and brands.
A material disruption in, failure of, inability
to upgrade, or inability to properly implement disaster recovery plans for, our information technology or other business systems could
have a material adverse effect on our business, financial position, results of operations, and cash flows.
We rely heavily on various
information and other business systems to manage our complex operations, including our online business, management of our global supply
chain, merchandise assortment planning, inventory allocation and replenishment, order management, warehousing, distribution and shipping
activities, point-of-sale processing in our stores, including credit and debit card processing, gift cards, our private label credit
card, our customer loyalty program, and various other processes and transactions. We continue to evaluate and implement upgrades and
changes to our information technology (“IT”) and other business systems.
Operation of our IT and/or
implementation of upgrades and changes to our IT and other business systems carries substantial risk, including failure to operate as
designed, failure to properly integrate with, or disruption of, other systems, potential loss of data or information, cost overruns or
unforeseen costs, implementation delays, disruption of operations, inability to properly train associates on new processes, inability
to properly direct change management, lower customer satisfaction resulting in lost customers or sales, inability to deliver the optimal
level of merchandise to our stores in a timely manner, inventory shortages, inventory levels in excess of customer demand, inability
to meet the demands of our international franchise partners or our wholesale and retail customers, and the inability to meet financial,
regulatory, and other reporting requirements. Further, disruptions or malfunctions affecting our current or new information or other
business systems could cause critical information upon which we rely to be lost, delayed, unreliable, corrupted, insufficient, or inaccessible.
See also the risks associated with the risk factor above, “Our failure to successfully manage our e-commerce business could
have a material adverse effect on our business”.
We continue to focus on the
implementation of IT disaster recovery and/or implementation of high availability readiness with regard to our e-commerce, finance, reporting,
distribution, logistics, store operations, merchandising, sourcing, and other key systems in order to protect against the loss or corruption
of critical data. There can be no assurance that we will be successful in implementing or executing on the appropriate disaster recovery
plans or high availability readiness to protect against such loss or corruption. There is also no assurance that a successfully implemented
system will deliver or continue to deliver any anticipated sales or margin improvements or other benefits to us. The failure to do so
could have a material adverse effect on our business, financial position, results of operations, and cash flows.
We also rely on third-party
vendors and outsourcing partners to design, program, implement, maintain, and service our existing and planned information systems, including
those operated through cloud-based technology. Any failures of these vendors to properly deliver their services in a timely fashion,
any determination by those vendors to stop supporting certain systems or components, or any failure of these vendors to protect our competitively
sensitive data, or the personal data of our customers or employees, or to prevent the unauthorized access to, or corruption of, such
data, whether in their possession, through our information systems or cloud-based technology utilized by us, could have a material adverse
effect on our business, financial position, results of operations, and cash flows.
RISKS
RELATED TO LEGAL AND REGULATORY MATTERS
We have exercised our option for the “controlled
company” exemption under Nasdaq rules.
The Company has exercised
its right to the “controlled company” exemption under Nasdaq rules, which enables us to forgo certain Nasdaq requirements
which include: (i) maintaining a majority of independent directors; and (ii) electing a Human Capital and Compensation
Committee and a Corporate Responsibility, Sustainability and Governance Committee composed solely of independent directors. Accordingly,
during any time while we remain a controlled company relying on the exemption and, if applicable, during any transition period
following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of
companies that are subject to all of the Nasdaq corporate governance requirements. Our status as a controlled company could
cause our Common Stock to look less attractive to certain investors or otherwise reduce the trading price of our Common Stock.
We are subject to the requirements of Section 203
of the DGCL, which limits our ability to engage in certain transactions with Mithaq.
We are subject to the requirements
of Section 203 of the Delaware General Corporation Law (the “DGCL”), which provides that a corporation shall
not engage in any business combination with any interested stockholder for a period of three years following the time that such stockholder
became an interested stockholder, unless (1) prior to such time the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an interested stockholder; (2) upon consummation of the
transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock
outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are
directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) at or subsequent to such time the
business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by
written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock which is not owned
by the interested stockholder. These restrictions are subject to certain exceptions specified in Section 203(b) of the DGCL.
The term “interested stockholder” is generally defined by Section 203 of the DGCL as any
person that (i) is the owner of 15% or more of the outstanding voting stock of the corporation,
or (ii) is an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the three-year
period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the
affiliates and associates of such person. The term “business combination” is broadly defined under Section 203
of the DGCL to include mergers, asset sales and other transactions in which the interested stockholder receives or could receive a financial
benefit on other than a pro rata basis with other stockholders, as further described in the section entitled “Description
of Capital Stock”.
Without
having obtained the prior approval of our Board of Directors or meeting the other conditions described above,
Mithaq became an “interested stockholder” with respect to the Company upon its acquisition of more than 15% of our shares
of Common Stock in February 2024. As a result, prior to February 2027, Mithaq will generally be prevented from engaging in
any business combination (as defined for purposes of Section 203 of the DGCL) with
us, in the absence of the approval of our Board of Directors and the affirmative vote of at least two-thirds of our outstanding shares
of Common Stock not owned by Mithaq.
We may be unable to protect our trademarks
and other intellectual property rights.
We believe that our trademarks
and service marks are important to our success and our competitive position due to their name recognition with our customers. We devote
substantial resources to the establishment and protection of our trademarks and service marks on a worldwide basis, including in the
countries from which we source our merchandise and in which we have business operations or plan to have business operations, including
through foreign franchise partners. We are not aware of any material claims of infringement or material challenges to our right to use
any of our trademarks in the United States or Canada. Nevertheless, the actions we have taken, including to establish and protect our
trademarks and service marks, may not be adequate to prevent others from imitating our products or to prevent others from seeking to
block sales of our products. Also, others may assert proprietary rights in our intellectual property, or may assert that we are engaging
in activities that infringe on their own intellectual property, and we may not be able to successfully resolve these types of claims,
any of which could have a material adverse effect on our business, financial position, results of operations, and cash flows. In addition,
the laws of certain foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States,
and we may not be successful in obtaining our trademarks in foreign countries where we plan to conduct business. Our failure to protect
our intellectual property rights could diminish the value of our brands, weaken our competitive position, and could have a material adverse
effect on our business, reputation, financial position, results of operations, and cash flows.
Federal tax and other legislation have
had and will continue to have a material effect on our business, financial position, results of operations, and cash flows. In addition,
changes in current tax law could adversely impact our business, financial position, results of operations, and cash flows. Other legislative,
regulatory, and other actions which might be taken by federal or state governments are unpredictable and could have unforeseen consequences
having a material adverse effect on our business.
We are subject to income
taxes in the United States and foreign jurisdictions, including Canada and Hong Kong. Our provision for income taxes and cash tax liability
in the future could be adversely affected by numerous factors, including, but not limited to, income before taxes being lower than anticipated
in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the
valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, accounting principles or interpretations thereof,
which could adversely impact our business, financial position, results of operations, and cash flows in future periods.
In addition, we are subject
to the examination of our income tax returns by the Internal Revenue Service, Canada Revenue Agency, and other state, local and foreign
tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of
our provision for income and other taxes. There can be no assurance that the outcomes from these continuous examinations will not have
a material adverse effect on our business, financial position, results of operations, and cash flows.
Legislative, regulatory,
and other actions, such as minimum wage requirements or overtime regulation and other wage and hour regulations, continue to be unpredictable
and could have unforeseen consequences. Such changes could impact our relationship with our workforce, increase our expenses and have
a material adverse effect on our business, financial position, results of operations, and cash flows. None of our employees is currently
represented by a collective bargaining agreement. However, from time to time there have been efforts to organize our employees at various
locations. There is no assurance that our employees will not unionize in the future.
Our failure to comply with federal, state
or local law, and litigation involving such laws, or changes in such laws, could materially increase our expenses and expose us to legal
risks and liability.
If we fail to comply with
applicable laws and regulations, particularly wage and hour, accessibility, privacy and information security, product safety, and pricing,
children’s online privacy protection, advertising, sweepstakes, contests, and marketing laws, we could be subject to legal and
reputational risk, government enforcement action, and class action civil litigation, which could have a material adverse effect on our
business, financial position, results of operations, and cash flows. Changes in regulation and how regulations are enforced, such as
taxes, privacy and information security, product safety, trade, consumer credit, pricing, advertising, and marketing, healthcare or environmental
protection, among others, could cause our expenses to increase, margins to decrease, or tax deductible expenses to decrease, which could
lead to a material adverse effect on our business, financial position, results of operations, and cash flows.
Legal and regulatory actions are inherent
in our business and could have a material adverse effect on our business, reputation, financial position, results of operations, and
cash flows.
We are, and in the future
may be, subject to legal and regulatory actions in the ordinary course of our business. Some of these proceedings have been, and in the
future may be, brought on behalf of various alleged classes of complainants. The plaintiffs may seek large and/or indeterminate amounts,
including treble, punitive, or exemplary damages and/or payment of legal fees in these proceedings. Substantial legal liability could
have a material adverse effect on our business, financial position, results of operations, and cash flows or cause us material reputational
harm, which in turn could materially harm our business prospects.
Our litigation and regulatory
enforcement and other matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted.
Our reserves for litigation and regulatory and enforcement matters may prove to be inadequate. In light of the unpredictability of our
litigation and regulatory and enforcement matters, it is also possible that in certain cases an ultimately unfavorable resolution of,
or decision in, one or more litigation or regulatory and enforcement matters could have a material adverse effect on our reputation and/or
our business, financial position, results of operations, and cash flows.
Legislative actions and new accounting pronouncements
could result in us having to increase our administrative expenses to remain compliant and could have other material adverse effects.
In order to comply with the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, accounting guidance or disclosure requirements by the SEC, guidance that may come from the Public Company Accounting Oversight
Board (“PCAOB”), or changes in listing standards by Nasdaq, we may be required to enhance our internal controls, hire
additional personnel, and utilize additional outside legal, accounting, and advisory services, all of which could cause our general and
administrative expenses to increase materially.
Changes to existing tax or
other laws, authoritative or regulatory guidance, and regulations may have a material adverse effect on our financial statements. The
Financial Accounting Standards Board is continuing its convergence efforts with its international counterpart, the International Accounting
Standards Board, to converge U.S. and international standards into one uniform set of accounting rules. The effect of changes in tax
and other laws or changes in accounting rules or regulatory guidance on our financial statements could be significant. Changes to
our financial position, results of operations, or cash flows could impact our debt covenant ratios or a lender’s perception of
our financial statements causing an adverse effect on our ability to obtain credit, or could adversely impact investor analyses and perceptions
of our business causing the market value of our stock to decrease. In addition, any changes in the current accounting rules, including
legislative and other proposals, could increase the expenses we report under U.S. GAAP and have a material adverse effect on our business,
financial position, results of operations, and cash flows.
We have in the past experienced a material
weakness in our internal controls over financial reporting. If we fail to maintain effective internal control and remediate any future
control deficiencies, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating
results, our ability to operate our business and our reputation with investors, ultimately leading to a decline in the price of our Common
Stock.
As a public company, we are
subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the
Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of Nasdaq. In particular, Section 404
of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal controls over financial reporting.
It also requires our independent registered public accounting firm to attest to our evaluation of our internal controls over financial
reporting. If any of our internal controls and systems do not perform as expected, we may experience material weaknesses in our internal
controls. While we continually undertake steps to improve our internal control over financial reporting as our business changes, we may
not be successful in making the improvements and changes necessary to be able to identify and remediate control deficiencies or material
weaknesses on a timely basis. It is possible that our current internal controls and any new internal controls that we develop may become
inadequate in the future because of changes in conditions in our business.
For example, as previously
disclosed, we had previously identified a material weakness in the operation of our internal control related to the review of the borrowing
base calculation provided to the Credit Agreement Lenders under our Credit Agreement. As of February 3, 2024, we have successfully
remediated this material weakness by implementing additional review procedures over the accuracy of the borrowing base calculation. Although
this material weakness has been remediated, and although our management has determined, and our independent registered public accounting
firm has attested, that our internal controls over financial reporting were effective as of February 3, 2024, we cannot assure you
that we or our independent registered public accounting firm will not identify a material weakness in our internal controls in the future.
If we have difficulty implementing
and maintaining effective internal controls over financial reporting, or if we identify a material weakness in our internal controls
over financial reporting in the future, we may not detect errors on a timely basis, such that it could harm our operating results, adversely
affect our reputation, cause our stock price to decline, or result in inaccurate financial reporting or material misstatements in our
annual or interim financial statements. We may be unable to maintain compliance with securities laws, stock exchange listing requirements
and debt instruments’ covenants regarding the timely filing of accurate periodic reports, which could lead to investigations by
Nasdaq, the SEC or other regulatory authorities or litigations with our creditors and/or stockholders, hence requiring additional management
attention and impairing our ability to operate our business. Our liquidity, access to capital markets and perceptions of our creditworthiness
may be adversely affected. We could be required to implement expensive and time-consuming remedial measures. Our independent registered
public accounting firm may issue reports that are adverse in the event it is not satisfied with the level at which our internal control
over financial reporting is documented, designed, or operating, or if it is not satisfied with our remediation of any identified material
weaknesses. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material
adverse effect on our business, financial position, results of operations, and cash flows.
Risks
Related to the Rights Offering
In the event that the Rights Offering does
not close, or results in less proceeds than expected, we will have less liquidity and/or less deleveraging than expected, which could
materially adversely affect our business, financial condition, results of operations and cash flows.
We expect the gross cash
proceeds from the Rights Offering, together with any delivery by Company creditors to the Company of indebtedness for borrowed money
owed to such creditors by the Company in payment of the Subscription Price in the Rights Offering, to be up to $90.0 million in the aggregate,
assuming full exercise by all stockholders of their rights; however, we can provide no assurance that we will receive the anticipated
cash proceeds and delivery of indebtedness from the Rights Offering or that the proportion of cash proceeds relative to delivered indebtedness
will be as anticipated. In the event that we do not receive the full proceeds expected from the Rights Offering or receive less cash
proceeds than anticipated, whether due to a material adverse effect having impacted our business, market conditions having resulted in
the abandonment or a delay in the Rights Offering or other reasons, we will have less liquidity and/or less deleveraging than expected,
which would exacerbate the risks described in this registration statement.
The subscription price for this Rights
Offering is not necessarily an indication of the fair value of our Common Stock. No valuation consultant or investment banker has opined
or is expected to opine upon the fairness or adequacy of the subscription price.
The subscription price
to purchase a share of Common Stock in this Rights Offering is $9.75 per whole share. This price was determined by the Disinterested
Directors taking into consideration a number of factors. The subscription price does not necessarily bear any relationship to the book
value of our assets or our past operations, cash flows, losses, financial condition, net worth or any other established criteria used
to value securities. No valuation consultant or investment banker has opined or is expected to opine upon the fairness or adequacy of
the subscription price. You should not necessarily consider the subscription price to be an indication of the fair value of the Common
Stock to be offered in this Rights Offering. You should not assume or expect that, after the Rights Offering, our Common Stock will trade
at or above the subscription price in any given time period. The market price of our Common Stock may decline after the Rights Offering.
We cannot assure you that you will be able to sell the shares of our Common Stock purchased during the Rights Offering at a price equal
to or greater than the subscription price. You should obtain a current price quote for our Common Stock before exercising your subscription
sights and make your own assessment of our business and financial condition, our prospects for the future, and the terms of the Rights
Offering. Once made, all exercises of subscription rights are irrevocable. See “Questions and Answers About the Rights Offering
– How was the subscription price of $9.75 per whole share of Common Stock established?”
Stockholders who do not fully exercise
their rights may have their interests diluted.
The Rights Offering will
result in the issuance of additional shares of our Common Stock. If you choose not to fully exercise your rights prior to the expiration
of the Rights Offering, your proportionate voting interest may be reduced and your relative ownership interest in us may be diluted.
Rights holders who do not exercise their rights prior to the expiration of the Rights Offering will lose any value represented by their
rights.
You may not revoke your subscription exercise
and could be committed to buying shares of Common Stock above the prevailing market price.
Once you exercise your rights,
you may not revoke the exercise. The public trading market price of our Common Stock may decline before the rights expire. If you exercise
your rights, you will have committed to buying shares of our Common Stock potentially at a price above the prevailing market price. Moreover,
you may be unable to sell your shares of Common Stock at a price equal to or greater than the subscription price you paid for such shares
of Common Stock.
We may terminate the Rights Offering at any
time prior to the expiration of the Subscription Period, and neither we nor the Subscription Agent will have any obligation to you except
to return your exercise payments.
We may, in our sole discretion,
decide not to continue with the Rights Offering or terminate the Rights Offering prior to the Expiration Date and Time. If the Rights
Offering is terminated, the Subscription Agent will return all exercise payments, in the manner and form in which such payments were
made, without interest or deduction, as soon as practicable after such termination.
The rights are not transferable, and there
is no market for the rights.
You may not sell, transfer,
assign or give away your rights, except that the subscription rights will be transferable by operation of law. Because the rights are
non-transferable, there is no market or other means for you to directly realize any value associated with the rights. You must exercise
the rights to realize any potential value from your rights.
You must act promptly and follow instructions
carefully if you want to exercise your rights.
Eligible
participants and, if applicable, brokers, dealers, custodian banks, or other nominees acting on their behalf, who desire to purchase
Common Stock in the Rights Offering must act promptly to ensure that all required rights certificates are actually received prior to
the Expiration Date and Time and that all payments are actually received prior to the payment deadline by the Subscription Agent. The
time period to exercise rights is limited. If you or your broker fail to complete and sign the required rights certificates, send an
incorrect payment amount or otherwise fail to follow the procedures that apply to the exercise of your rights, we may, depending on the
circumstances, reject your exercise of rights or accept it only to the extent of the payment received. Neither we nor the Subscription
Agent will contact you concerning, or will attempt to correct, an incomplete or incorrect rights certificate or payment, or will contact
you concerning whether a broker, dealer, custodian bank, or other nominee holds rights on your behalf.
We have the sole discretion
to determine whether an exercise properly follows the procedures that apply to the exercise of your rights.
Significant sales of our Common Stock, or
the perception that significant sales may occur in the future, could adversely affect the market price for our Common Stock.
The sale of substantial
amounts of our Common Stock could adversely affect the price of these securities. Sales of substantial amounts of our Common Stock in
the public market, and the availability of shares of our Common Stock for future sale, including shares of our Common Stock to be issued
in this Rights Offering, could cause the market price of our Common Stock to remain low for a substantial amount of time. We cannot foresee
the impact of such potential sales on the market, but it is possible that if a significant percentage of such available shares of Common
Stock were attempted to be sold within a short period of time, the market for shares of our Common Stock would be adversely affected.
Even if a substantial number of sales do not occur within a short period of time, the mere existence of this “market overhang”
could have a negative impact on the market for our Common Stock and our ability to raise additional capital. Any disposition by Mithaq,
or any other substantial stockholders, of our Common Stock in the public market, or the perception that such dispositions could occur,
could adversely affect prevailing market prices of our Common Stock.
You will not be able to sell the shares of
Common Stock you buy in the Rights Offering until you receive your DRS statement or your account is credited with the Common Stock.
If
you are a record holder and purchase shares of Common Stock in the Rights Offering by submitting a subscription rights certificate and
payment, we will mail you a DRS statement as soon as practicable after the Expiration Date and Time, or such later date as to which the
Rights Offering may be extended, and after all necessary calculations, pro rata
allocations and adjustments have been completed. If your shares of Common Stock are held by a broker, dealer, custodian bank, or
other nominee and you purchase shares of Common Stock in the Rights Offering, your account with your nominee will be credited with the
shares of our Common Stock you purchased in the Rights Offering as soon as practicable after the Expiration Date and Time, or such later
date as to which the Rights Offering may be extended, and after all necessary calculations, pro
rata allocations and adjustments have been completed. Until your DRS statements have been delivered or your account is credited,
you may not be able to sell your shares of Common Stock even though the Common Stock issued in the Rights Offering will be listed for
trading on Nasdaq. The stock price may decline between the time you decide to sell your shares of Common Stock and the time you are actually
able to sell your shares of Common Stock.
Because
our management will have broad discretion over the use of the net cash proceeds from the Rights Offering, you may not agree
with how we use the proceeds, and we may not invest the proceeds successfully.
We currently anticipate
that we will use the net cash proceeds of the Rights Offering first (to the extent required by the Credit Agreement) to make a prepayment
of the indebtedness outstanding under the Credit Agreement and thereafter for general operating, working capital and other corporate
purposes, which, if so determined by the Company, may include additional reduction of the Company’s indebtedness. Under the terms
of the Credit Agreement, we are required to apply 80% of the net cash proceeds of the Rights Offering to the prepayment of the ABL Credit
Facility. After making required prepayments under the Credit Agreement, our management may allocate any remaining net cash proceeds among
the remaining purposes as it deems appropriate. In addition, market factors may require our management to allocate portions of the proceeds
for other purposes. Accordingly, you will be relying on the judgment of our management with regard to the use of the proceeds from the
Rights Offering, and you will not have the opportunity, as part of your investment decision, to assess whether we are using the proceeds
appropriately. It is possible that we may invest the proceeds in a way that does not yield a favorable, or any, return for us.
If you use a personal check to pay for the
shares of Common Stock, it may not clear in time.
Any personal check used to
pay for shares of our Common Stock must clear prior to the Expiration Date and Time, and the clearing process may require seven or more
business days.
If you seek to pay some or all of the subscription
price by delivering indebtedness for borrowed money and fail to contact the Company with such request promptly following the commencement
of this Rights Offering, such delay may result in your being unable to timely deliver your indebtedness for borrowed money as full or
partial payment of the subscription price, which in turn would result in your purported exercise of Rights to be paid for with such indebtedness
for borrowed money being rejected.
If
you would like to pay some or all of the subscription price for your shares of Common Stock by delivery, in lieu of cash, of an
equivalent amount of indebtedness for borrowed money owed to you by the Company, you must contact the Company as soon as practicable
after the date of this prospectus (and in any event prior to exercising your subscription rights and delivering any indebtedness for
borrowed money in payment therefor) so that the Company can in its sole and absolute discretion, (i) determine whether it considers
such indebtedness for borrowed money to be valid and eligible for delivery in payment of some or all of the subscription price and (ii) confirm
the documentation that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for borrowed
money as payment for some or all of the subscription price. As it may take some time for the Company to evaluate and respond to requests
to deliver indebtedness for borrowed money in full or partial payment of the subscription price and for you, thereafter, to complete
and provide the necessary documentation to the Subscription Agent, the Company strongly recommends that you start this process as soon
as possible and not wait until the final days of the Subscription Period. Your delay in commencing this process may result in your being
unable to timely deliver your indebtedness for borrowed money as full or partial payment of the subscription price, which in turn would
result in your purported exercise of Rights to be paid for with such indebtedness for borrowed money being rejected.
Because no minimum subscription is required
and because we do not have formal commitments from our stockholders for the entire amount we seek to raise pursuant to the Rights Offering,
we cannot assure you of the amount of proceeds that we will receive from the Rights Offering.
No minimum subscription is
required for consummation of the Rights Offering. It is also possible that no over-subscription rights will be exercised in connection
with the Rights Offering. As a result, we cannot assure you of the amount of proceeds that we will receive in the Rights Offering. Therefore,
if you exercise all or any portion of your rights, but other holders do not, we may not raise the desired amount of capital in the Rights
Offering, the market price of our Common Stock could be adversely impacted and we may, depending on the then-existing facts, find it
necessary to pursue alternative means of financing, which may be dilutive to your investment.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains and incorporates by reference forward-looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives
and results of operations, including net income (loss) per share, adjusted net income (loss) per diluted share, our ability to consummate
the Rights Offering, our expectations related to the use of the net cash proceeds from the Rights Offering, our ability to implement
the use of proceeds as currently expected, and our ability to achieve the anticipated benefits of such use of proceeds. Forward-looking
statements typically are identified by use of terms such as “may”, “will”, “should”, “plan”,
“project”, “expect”, “anticipate”, “estimate”, and similar words, although some forward-looking
statements are expressed differently. These forward-looking statements are based upon the Company’s current expectations and assumptions
and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these
risks and uncertainties are described in the Company’s filings with the SEC, including in its annual
report on Form 10-K for the fiscal year ended February 3, 2024, which is incorporated by reference herein.
Included among the risks
and uncertainties that could cause actual results and performance to differ materially are:
| · | the
risk that the Company will be unable to achieve operating results at levels sufficient to
fund and/or finance the Company’s current level of operations and repayment of indebtedness; |
| · | the
risk that the Company will be unsuccessful in gauging fashion trends and changing consumer
preferences; |
| · | the
risks resulting from the highly competitive nature of the Company’s business and its
dependence on consumer spending patterns, which may be affected by changes in economic conditions
(including inflation); |
| · | the
risk that changes in the Company’s plans and strategies with respect to pricing, capital
allocation, capital structure, investor communications and/or operations may have a negative
effect on the Company’s business; |
| · | the
risk that the Company’s strategic initiatives to increase sales and margin, improve
operational efficiencies, enhance operating controls, decentralize operational authority
and reshape the Company’s culture are delayed or do not result in anticipated improvements; |
| · | the
risk of delays, interruptions, disruptions and higher costs in the Company’s global
supply chain, including resulting from disease outbreaks, foreign sources of supply in less
developed countries, more politically unstable countries, or countries where vendors fail
to comply with industry standards or ethical business practices, including the use of forced,
indentured or child labor; |
| · | the
risk that the cost of raw materials or energy prices will increase beyond current expectations
or that the Company is unable to offset cost increases through value engineering or price
increases; |
| · | various
types of litigation, including class action litigations brought under securities, consumer
protection, employment, and privacy and information security laws and regulations; |
| · | the
imposition of regulations affecting the importation of foreign-produced merchandise, including
duties and tariffs; |
| · | risks
related to the existence of a controlling shareholder, and |
| · | the
uncertainty of weather patterns. |
We may not actually achieve
the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking
statements, which speak only as of the date they were made. Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements
included and incorporated by reference in this prospectus, particularly in the “Risk Factors” section. Our forward-looking
statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments
that we may make or enter into. You should read this prospectus and the information incorporated by reference herein completely and with
the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to
release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events, except as required by law.
Dividend
Policy
We have no current plans
to pay any cash dividends on our Common Stock for the foreseeable future. Declarations of cash dividends, and the establishment of future
record and payment dates, are at the discretion of our Board of Directors based on a number of factors, including future financial performance,
general business and market conditions, and other investment priorities. If payment of dividends is resumed, any subsequent reduction
or discontinuance by us of the payment of quarterly cash dividends could cause the market price of our Common Stock to decline.
DILUTION
Purchasers of shares of
Common Stock in the Rights Offering will experience an immediate dilution of the net tangible book value per share of our Common Stock.
Our net tangible book value as of November 2, 2024 was approximately $(48.4) million, or approximately $(3.79) per share of Common Stock
(based upon 12,778,984 shares of our Common Stock outstanding as of November 2, 2024). Net tangible book value per share is equal to
our total net tangible book value, which is our total tangible assets less our total liabilities, divided by the number of shares of
our outstanding Common Stock. Total tangible assets exclude our tradenames and right-of-use assets, and total liabilities exclude our
operating lease liabilities.
Dilution per share of
Common Stock equals the difference between the amount purchasers paid per share of Common Stock in the Rights Offering and the net tangible
book value per share of our Common Stock immediately after the Rights Offering.
Based on the sale by us
in the Rights Offering of a maximum of 9,230,769 shares of Common Stock at the subscription price of $9.75 per share, our pro forma net
tangible book value as of November 2, 2024 would have been approximately $40.1 million, or $1.82 per share. This represents an immediate
increase in pro forma net tangible book value to existing stockholders of $5.61 per share and an immediate dilution in pro forma net
tangible book value of $7.93 per share to purchasers in the Rights Offering. The following table illustrates this pro forma per-share
dilution:
| Subscription
Price | |
$ | 9.75 | |
| Net
tangible book value per common share as of November 2, 2024, before giving effect to the Rights Offering | |
$ | (3.79 | ) |
| Increase
in pro forma net tangible book value per common share to purchasers in the Rights Offering | |
$ | 5.61 | |
| Pro
forma net tangible book value per common share as of November 2, 2024 after giving effect to the Rights Offering | |
$ | 1.82 | |
| Dilution
in pro forma net tangible book value per common share attributable to the Rights Offering | |
$ | 7.93 | |
The information
above is based on 12,778,984 shares of our Common Stock outstanding as of November 2,
2024.
CAPITALIZATION
The following table sets
forth our cash and cash equivalents and consolidated capitalization as of November 2, 2024, on:
| · | an
adjusted basis to give effect to the Rights Offering and the use of the net cash proceeds
therefrom as described under “Use of Proceeds” assuming that all stockholders
exercise all of their subscription rights in full and pay their entire subscription prices
in cash; and |
| · | an
alternative adjusted basis to give effect to the Rights Offering and the use of the net cash
proceeds therefrom as described under “Use of Proceeds” assuming that
(i) Mithaq exercises all of its subscription rights in full and pays its entire subscription
price by delivery of indebtedness in lieu of cash, and (ii) all other stockholders (including
Snowball) exercise all of their subscription rights in full and pay their entire subscription
prices in cash. |
The as adjusted information
set forth below is illustrative only and will be adjusted based on the number of shares of Common Stock actually sold. You should read
this information in conjunction with our consolidated financial statements and notes thereto incorporated by reference into this prospectus.
| (in thousands of dollars) | |
As
of November 2, 2024
(unaudited) | |
| | |
Actual | | |
As Adjusted
(if all
subscription
rights are
fully
exercised and
the total
subscription
price is paid
by all
stockholders
in cash) | | |
As Adjusted
on an Alternative Basis
(if all
subscription
rights are fully
exercised and
the
subscription
price is
paid
by (i) Mithaq
by delivery of
indebtedness
in lieu of cash,
and (ii) all
other
stockholders
in cash) | |
| Cash and cash equivalents | |
| 5,749 | | |
| 23,457 | | |
| 13,601 | |
| Long Term Debt (including current portion): | |
| | | |
| | | |
| | |
| ABL
Credit Facility(1) | |
| 362,375 | | |
| 291,542 | (2) | |
| 330,968 | (3) |
| Mithaq Term Loans | |
| 165,664 | | |
| 165,664 | | |
| 116,382 | |
| Total indebtedness | |
| 528,039 | | |
| 457,206 | | |
| 447,350 | |
| Stockholders’ Equity | |
| | | |
| | | |
| | |
Common
Stock, 100,000,000 shares authorized; 12,778,984 shares issued and outstanding (actual);
22,009,753 shares issued and outstanding (as adjusted); 22,009,753 shares issued and outstanding
(as adjusted on an alternative basis) | |
| 1,278 | | |
| 2,201 | | |
| 2,201 | |
| Additional paid-in capital | |
| 151,359 | | |
| 238,977 | | |
| 238,977 | |
| Treasury stock, at cost | |
| (110 | ) | |
| (110 | ) | |
| (110 | ) |
| Deferred compensation | |
| 110 | | |
| 110 | | |
| 110 | |
| Accumulated other comprehensive loss | |
| (17,517 | ) | |
| (17,517 | ) | |
| (17,517 | ) |
| Accumulated deficit | |
| (184,694 | ) | |
| (184,694 | ) | |
| (184,694 | ) |
| Total stockholder equity (deficit) | |
| (49,574 | ) | |
| 38,967 | | |
| 38,967 | |
| Total Capitalization | |
| 478,465 | | |
| 496,173 | | |
| 486,317 | |
| |
(1) |
We and certain of our
subsidiaries maintain the $433.0 million ABL Credit Facility under our Credit Agreement. As of November
2, 2024, we had drawn approximately $362.4 million under the ABL Credit Facility and had approximately $12.2 million of letters of
credit outstanding. |
| |
(2) |
Takes into account a
mandatory prepayment of amounts outstanding under our Credit Agreement equal to approximately $70.8 million (i.e., 80% of the net
cash proceeds of the Rights Offering on an adjusted basis). |
| |
(3) |
Takes into account a
mandatory prepayment of amounts outstanding under our Credit Agreement equal to approximately $31.4 million (i.e., 80% of the net
cash proceeds of the Rights Offering on an alternatively adjusted basis). |
USE
OF PROCEEDS
We
estimate that the net cash proceeds to us from the sale of shares of Common Stock offered in the Rights Offering, after deducting estimated
offering expenses, would be approximately $88.5 million if the Rights Offering is fully subscribed for by all stockholders in cash, and
would be approximately $39.3 million if the Rights Offering is fully subscribed for in cash by all stockholders other than Mithaq and
fully subscribed for by Mithaq by delivery of indebtedness for borrowed money.
We intend to use net cash
proceeds of the Rights Offering first (to the extent required by the Credit Agreement) to make a prepayment of the indebtedness outstanding
under the Credit Agreement and thereafter for general operating, working capital and other corporate purposes, which, if so determined
by the Company, may include additional reduction of the Company’s indebtedness. Under the terms of the Credit Agreement, we are
required to apply 80% of the net cash proceeds of the Rights Offering to the prepayment of the ABL Credit Facility.
In addition, our largest
stockholder, Mithaq, has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights
distributed to it and its subsidiary, Snowball, by the Company in the Rights Offering, as well as the over-subscription privilege, and
that it currently intends, but undertakes no obligation, to pay the subscription price payable upon the exercise of any such subscription
rights directly held by Mithaq with indebtedness for borrowed money owed by the Company to Mithaq (including any indebtedness for borrowed
money then-outstanding pursuant to Mithaq Term Loans). Any subscription price paid by delivery of indebtedness for borrowed money will
not result in net cash proceeds to the Company but would reduce the aggregate outstanding indebtedness of the Company.
Our management will retain
broad discretion in deciding how to allocate the net cash proceeds of the Rights Offering, subject to our obligations pursuant to the
Credit Agreement. The precise amounts and timing of our use of the net cash proceeds will depend upon market conditions and the availability
of other funds, among other factors. See “Risk Factors – Risks Related to the Rights Offering – Because our management
will have broad discretion over the use of the net cash proceeds from the Rights Offering, you may not agree with how we use the proceeds,
and we may not invest the proceeds successfully”.
PUBLIC
MARKET FOR OUR COMMON STOCK
Our Common Stock trades
on Nasdaq under the symbol “PLCE”. As of December 13, 2024, we had approximately 36 holders of record of our Common
Stock. Because many of our shares of Common Stock are held by brokers and other institutions on behalf of stockholders, this number is
not indicative of the total number of stockholders represented by these stockholders of record. As of December 13, 2024, there were
12,784,972 shares of our Common Stock outstanding. On December 18, 2024, the last reported
sales price of our Common Stock as reported by Nasdaq was $10.77 and the high and low sales prices for shares of our Common Stock as
reported by Nasdaq were $11.94 and $10.35, respectively.
Transfer Agent and Registrar
The Transfer Agent and registrar
for our Common Stock is Equiniti Trust Company, LLC.
THE
RIGHTS OFFERING
The following summary
contains basic information about our Common Stock and the Rights Offering and is not intended to be complete. It does not contain all
the information that may be important to you. Before deciding whether to exercise your subscription rights, you should carefully read
this prospectus or any prospectus supplement, including the information set forth under the heading “Risk Factors” and the
information that is incorporated by reference into this prospectus or any prospectus supplement. For a more complete understanding of
our Common Stock, you should read the section entitled “Description of Capital Stock” in this prospectus.
The Subscription Rights
We will distribute to
each holder of our Common Stock who is a record holder of our Common Stock as of close of business on the Record Date, which is December 13,
2024, either as a holder of record or, in the case of shares held of record by brokers, dealers, custodian banks or other nominees on
your behalf, as a beneficial owner of those shares, at no charge, one non-transferable subscription right for each share of our Common
Stock owned, for a total of approximately 12,784,972 subscription rights. The subscription rights will be evidenced by non-transferable
subscription rights certificates. Each subscription right will allow you to purchase shares of our Common Stock at a price of $9.75 per
whole share. If you elect to exercise your basic subscription right in full, you may also subscribe, at the subscription price, for additional
shares of our Common Stock under your over-subscription privilege to the extent that other rights holders do not exercise their basic
subscription rights in full, subject to certain limitations. If a sufficient number of shares of our Common Stock is unavailable to fully
satisfy the over-subscription privilege requests, the available shares of Common Stock will be sold pro rata among subscription
rights holders who exercised their over-subscription privilege based on the number of shares of Common Stock each subscription rights
holder subscribed for under the basic subscription right.
If you hold your shares of
Common Stock in a brokerage account or through a dealer or other nominee, please see the information included below the heading “The
Rights Offering — Beneficial Owners”.
Reasons for the Rights Offering
On February 28, 2024,
the then-Board of Directors, none of the members of which were associated with Mithaq, approved the Letter Agreement, which requires,
among other things, that the Company use reasonable best efforts to prepare, file, and cause to be effective a registration statement,
prospectus and other materials required under applicable law to permit, and to then commence and complete, a rights offering. In light
of this obligation, and following the Disinterested Directors’ determination that the Rights Offering is in the best interests
of the Company and its stockholders, the Disinterested Directors unanimously approved the Rights Offering. The Rights Offering is being
made to raise capital for general corporate purposes, and to provide us with an opportunity to raise capital and deleverage and more
generally strengthen the Company’s balance sheet (including through a reduction of the Company’s indebtedness). See “Use
of Proceeds”.
Subscription Price
The subscription price
is $9.75 per whole share of Common Stock.
The
Disinterested Directors determined the subscription price after consultation with our financial
advisor, Roth, and after taking into consideration, among other things, the following factors:
| · | the
current and historical trading prices of Common Stock on Nasdaq; |
| · | the
Disinterested Directors’ assessment of the price at which stockholders might be willing
to participate in the Rights Offering; |
| · | the
Company’s need for additional capital and liquidity and to deleverage; |
| · | the
Company’s business prospects and general conditions of the securities markets; |
| · | the
cost of capital from other sources; |
| · | comparable
precedent transactions, including the percentage of shares offered, the terms of the rights
being offered, the subscription price and the discount that the subscription price represents
to recent closing prices for those offerings; and |
| · | the
Company’s contractual obligations pursuant to the Letter Agreement. |
In conjunction with the
review of these factors, the Disinterested Directors considered our history and prospects, including our past and present earnings and
cash requirements, our prospects for the future, the outlook for our industry and our current financial condition. The Disinterested
Directors believe that the subscription price should be designed to provide an incentive to our current stockholders to participate in
the Rights Offering and exercise their basic subscription right and their over-subscription privilege.
The subscription price
does not necessarily bear any relationship to the book value of our assets or our past operations, cash flows, losses, financial condition,
net worth or any other established criteria used to value securities. No valuation consultant or investment banker has opined or is expected
to opine upon the fairness or adequacy of the subscription price. You should not consider the subscription price to necessarily be an
indication of the fair value of the Common Stock to be offered in this Rights Offering. You should not assume or expect that, after the
Rights Offering, our Common Stock will trade at or above the subscription price in any given time period. The market price of our Common
Stock may decline after the Rights Offering. We cannot assure you that you will be able to sell the shares of our Common Stock purchased
during the Rights Offering at a price equal to or greater than the subscription price. You should obtain a current price quote for our
Common Stock before exercising your subscription sights and make your own assessment of our business and financial condition, our prospects
for the future, and the terms of the Rights Offering. Once made, all exercises of subscription rights are irrevocable. For a discussion
of recent trading prices of our Common Stock on Nasdaq, see “Public Market for Our Common Stock”.
Conditions, Amendment, Withdrawal
and Termination
Our obligation to consummate
the Rights Offering is conditioned upon, among other things, Nasdaq approving for listing, subject to official notice of issuance, the
shares of our Common Stock issuable upon exercise of the subscription rights. We may terminate, amend or modify the Rights Offering,
in whole or in part, at any time before completion of the Rights Offering. If we make any fundamental change to the terms of the Rights
Offering after the date of effectiveness of this prospectus, we will file a post-effective amendment to the registration statement in
which this prospectus is included and offer subscribers the opportunity to cancel their subscriptions. In such event, all subscription
payments will be returned to each stockholder subscribing to purchase shares in the Rights Offering, and we will recirculate an amended
prospectus after the post-effective amendment is declared effective with the SEC. If we extend the Subscription Period of the Rights
Offering in connection with any post-effective amendment, we will allow holders of rights a reasonable period of additional time to make
new investment decisions on the basis of the new information set forth in the amended prospectus that will form a part of the post-effective
amendment. In such event, we will issue a press release announcing the changes to the Rights Offering and the new Rights Offering expiration
date. The terms and conditions of the Rights Offering cannot be modified or amended after the Expiration Date and Time.
In addition, we reserve the
right to withdraw and terminate the Rights Offering at any time for any reason. We also may terminate the Rights Offering at any time
before its completion if our Board of Directors decides to do so in its sole discretion. If we terminate the Rights Offering, we will
issue a press release notifying stockholders of the termination.
If the Rights Offering is
terminated, in whole or in part, all affected subscription rights will expire without value and all subscription payments received by
the Subscription Agent will be returned promptly, in the manner and form in which such payments were made, without interest or deduction.
See also “The Rights Offering – Termination of the Rights Offering”.
Effect of Rights Offering on Existing
Stockholders
The ownership interests
and voting interests of the existing stockholders who do not exercise their subscription rights may be diluted.
See “Questions and
Answers About the Rights Offering”.
Basic Subscription Rights and
Over-Subscription Privilege
Your subscription rights
entitle you to basic subscription rights and an over-subscription privilege.
Basic
Subscription Rights. With your basic subscription rights, you may purchase 0.7220 shares of our Common Stock per subscription
right, upon delivery of the required documents and payment of the subscription price of $9.75 per whole share, (i) in cash, (ii) by
delivery in lieu of cash of an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest)
owed to you by the Company, or (iii) by delivery of a combination of cash and such indebtedness. You are not required to exercise
all of your subscription rights. The Subscription Agent will deliver to the record holders who purchase shares of Common Stock in the
Rights Offering DRS statements representing the shares of Common Stock that they purchased as soon as practicable after the Expiration
Date and Time, or such later date as to which the Rights Offering may be extended, and after all necessary
calculations, pro rata allocations and adjustments have been completed. If your shares of Common Stock are held by a broker,
dealer, custodian bank, or other nominee and you purchase shares of Common Stock in the Rights Offering, your account with your nominee
will be credited with the shares of Common Stock you purchased in the Rights Offering as soon as practicable after the Expiration Date
and Time, or such later date as to which the Rights Offering may be extended, and after all necessary
calculations, pro rata allocations and adjustments have been completed.
Over-Subscription
Privilege. In addition to your basic subscription right, you may subscribe for additional shares of our Common Stock, upon
delivery of the required documents and payment of the subscription price of $9.75 per whole share, (i) in cash, (ii) by delivery
of an equivalent amount of principal and accrued and unpaid interest of any indebtedness for borrowed money owed by the Company to you,
or (iii) by delivery of a combination thereof, before the expiration of the Rights Offering. You may only exercise your over-subscription
privilege if you exercised your basic subscription right in full, including payment of the subscription price therefor, and other holders
of subscription rights do not exercise their basic subscription rights in full. The Subscription Agent will deliver to the record holders
who purchase shares of Common Stock in the Rights Offering DRS statements representing the shares of Common Stock that they purchased
with the over-subscription privilege as soon as practicable after the Expiration Date and Time, or such later date as to which the Rights
Offering may be extended, and after all necessary calculations, pro rata allocations
and adjustments have been completed. If your shares of Common Stock are held by a broker, dealer, custodian bank, or other nominee and
you purchase shares of Common Stock in the Rights Offering, your account with your nominee will be credited with the shares of Common
Stock you purchased with the over-subscription privilege as soon as practicable after the Expiration Date and Time, or such later date
as to which the Rights Offering may be extended, and after all necessary calculations, pro
rata allocations and adjustments have been completed.
Pro
Rata Allocation. If there are not enough shares of our Common Stock to satisfy all subscriptions made under the over-subscription
privilege, we will allocate the remaining shares of our Common Stock pro rata, after eliminating all fractional shares, among
those over-subscribing rights holders. “Pro rata” means in proportion to the number of shares of our Common Stock
that you and the other subscription rights holders have purchased by exercising your basic subscription rights. If there is a pro
rata allocation of the remaining shares of our Common Stock and you receive an allocation of a greater number of shares of Common
Stock than you subscribed for under your over-subscription privilege, then we will allocate to you only the number of shares of Common
Stock for which you subscribed. We will allocate the remaining shares of Common Stock among all other holders exercising their over-subscription
privileges.
Full
Exercise of Basic Subscription Rights. You may exercise your over-subscription privilege only if you exercise your basic subscription
rights in full. To determine if you have fully exercised your basic subscription rights, we will consider only the basic subscription
rights held by you in the same capacity. For example, suppose that you were granted subscription rights for shares of our Common Stock
that you own individually and shares of our Common Stock that you own collectively with your spouse. If you wish to exercise your over-subscription
privilege with respect to the subscription rights you own individually, but not with respect to the subscription rights you own collectively
with your spouse, you only need to fully exercise your basic subscription rights with respect to your individually owned subscription
rights. You do not have to subscribe for any shares of Common Stock under the basic subscription rights owned collectively with your
spouse to exercise your individual over-subscription privilege.
When you complete the portion
of your subscription rights certificate to exercise your over-subscription privilege, you will be representing and certifying that you
have fully exercised your subscription rights as to shares of our Common Stock that you hold in that capacity. You must exercise your
over-subscription privilege at the same time you exercise your basic subscription rights in full.
Return of Excess Payment.
If
you exercised your over-subscription privilege and are allocated less than all of the shares of our Common Stock for which you wished
to subscribe, your excess payment for shares of Common Stock that were not allocated to you will be returned to you in the manner and
form in which such payment was made, without interest or penalty, as soon as practicable after the Expiration Date and Time, and
after all necessary calculations, pro rata allocations and adjustments have been
completed. The Subscription Agent will deliver to the record holders who purchase shares of Common Stock in the Rights Offering DRS statements
representing the shares of Common Stock that you purchased as soon as practicable after the Expiration Date and Time, and after all necessary
calculations, pro rata allocations and adjustments have been completed.
Participation of Our Directors, Executive Officers and Significant
Stockholders
Our largest stockholder,
Mithaq, has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights distributed
to it and its subsidiary, Snowball by the Company in the Rights Offering. Messrs. Turki Saleh A. AlRajhi and Muhammad Asif Seemab,
members of the Board of Directors, are also Managing Directors of Mithaq, and may be deemed to
beneficially own all of the shares of Common Stock currently owned by Mithaq and Snowball and any shares of Common Stock which would
be acquired by Mithaq and Snowball upon exercise of its subscription rights in the Rights Offering. More generally, our directors
and executive officers who own shares of Common Stock are permitted, but not required, to participate in the Rights Offering on the same
terms and conditions applicable to all holders of subscription rights. Each such director and executive officer may determine, in their
sole discretion, not to participate in the Rights Offering. Any such director or executive officer who exercises the rights distributed
in the Rights Offering will pay $9.75 per whole share, the same subscription price paid by all other holders who exercise their subscription
rights in the Rights Offering.
See
“Risk Factors – Risks Related to Our Stock and Stock Price – We have a controlling stockholder who, following
the Rights Offering, may continue owning a majority of our outstanding shares of Common Stock, and as a result controls all matters requiring
shareholder approval.”
Method of Subscription –
Exercise of Rights
Subscription
rights are evidenced by subscription rights certificates, which may be physical certificates but will more likely be electronic certificates
issued through the facilities of DTC. Except as described below under “Foreign Restrictions”, the subscription rights
certificates will be mailed to the Record Date stockholders or, if a Record Date stockholder’s shares of Common Stock are held
by a depository or nominee on his, her or its behalf, to such depository or nominee. Subscription rights may be exercised by completing
and signing the subscription rights certificate that accompanies this prospectus together with any required signature guarantees and
mailing it in the envelope provided, or otherwise delivering the completed and duly executed subscription rights certificate to the Subscription
Agent, together with payment in full of the subscription price by delivery of cash and/or the original evidence of indebtedness for borrowed
money (in accordance with the Instructions for Use of Non-Transferable Subscription Rights Certificates that accompanied the mailing
of this prospectus, and subject to the Company’s determination, in its sole and absolute discretion, of validity and eligibility
of such indebtedness for borrowed money), and any other supplemental documentation requested, by the Expiration Date and Time, unless
delivery of the subscription rights certificate is effected pursuant to the guaranteed delivery procedures. See “The Rights
Offering – Method of Payment”.
Completed subscription rights
certificates and related payments must be received by the Subscription Agent prior to 5:00 p.m., New York City time, on or before the
Expiration Date and Time, at the Subscription Agent’s address set forth below, unless delivery of the subscription rights certificate
is effected pursuant to the guaranteed delivery procedures described below.
Method of Payment
A participating subscription
rights holder may send the subscription rights certificate together with payment for the shares of offered Common Stock subscribed for
in the Rights Offering to the Subscription Agent based on the subscription price of $9.75 per whole share of offered Common Stock. Except
as described below under “Guaranteed Delivery Procedures”, to be accepted, the cash payment, together with a properly
completed and executed subscription rights certificate and any other supplemental documentation requested, must be received by the Subscription
Agent at the Subscription Agent’s address set forth below (see “The Rights Offering – Delivery of Subscription
Materials and Payment”), at or prior to the Expiration Date and Time in accordance with the Instructions for Use of Non-Transferable
Subscription Rights Certificates that accompanied the mailing of this prospectus.
If
you would like to pay some or all of the subscription price for your shares of Common Stock by delivery, in lieu of cash, of an
equivalent amount of indebtedness for borrowed money owed to you by the Company, you must contact the Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention:
Jared E. Shure, Chief Administrative Officer, General Counsel & Secretary
Telephone:
(201) 453-7049
as soon as practicable after the date of this
prospectus (and in any event prior to exercising your subscription rights and delivering any indebtedness for borrowed money in payment
therefor) so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness for
borrowed money to be valid and eligible for delivery in payment of some or all of the subscription price and (ii) confirm the documentation
that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for borrowed money as payment
for some or all of the subscription price. As it may take some time for the Company to evaluate and respond to requests to deliver indebtedness
for borrowed money in full or partial payment of the subscription price and for you, thereafter, to complete and provide the necessary
documentation to the Subscription Agent, the Company strongly recommends that you start this process as soon as possible and not wait
until the final days of the Subscription Period. Your delay in commencing this process may result in your being unable to timely deliver
your indebtedness for borrowed money as full or partial payment of the subscription price, which in turn would result in your purported
exercise of Rights to be paid for with such indebtedness for borrowed money being rejected.
Subject
to the Company’s determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to
be valid and eligible for delivery in payment of some or all of the subscription price, except as described below under “Guaranteed
Delivery Procedures”, in order to be accepted, the original evidence of such indebtedness for borrowed money (principal and/or
accrued and unpaid interest) owed to you by the Company in the amount equivalent to the amount of the subscription price (in accordance
with the Instructions for Use of Non-Transferable Subscription Rights Certificates that accompanied this prospectus), together with a
properly completed and executed subscription rights certificate and any other supplemental documentation requested, must be received
by the Subscription Agent at the Subscription Agent’s address set forth below (see “The Rights Offering – Delivery
of Subscription Materials and Payment”), at or prior to the Expiration Date and Time.
DO NOT SEND SUBSCRIPTION RIGHTS CERTIFICATES,
NOTICES OF GUARANTEED DELIVERY OR PAYMENTS DIRECTLY TO THE COMPANY.
All
cash payments by a participating subscription rights holder must be made (i) in U.S. dollars by personal check or bank draft payable
to “Equiniti Trust Company, LLC (acting as Subscription Agent for The Children’s Place, Inc.)” or by wire transfer
to Equiniti Trust Company, LLC with reference to the subscription rights holder’s name, (ii) by delivery in lieu of cash of
an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by the Company to such
rights holder (in accordance with the Instructions for Use of Non-Transferable Subscription Rights Certificates that accompanied the
mailing of this prospectus and solely after contacting the Company as described above, and further subject to the Company’s determination,
in its sole and absolute discretion, of validity and eligibility of such indebtedness and the Company’s confirmation, in
its sole and absolute discretion, of any additional documentation that you will be required to deliver), or (iii) by delivery of
a combination of cash and such indebtedness for borrowed money. See “The Rights Offering – Delivery of Subscription Materials
and Payment” for more information on payment methods for the subscription rights. The Subscription Agent will hold all funds
received from subscribing stockholders in a segregated account (or, with respect to any evidence of indebtedness for borrowed money received
from subscribing stockholders, in escrow) until we issue your shares of our Common Stock to you upon consummation of the Rights Offering
or the withdrawal or termination of the Rights Offering.
The method of delivery
of subscription rights certificates and payment of the subscription price to us, including evidence of our indebtedness for borrowed
money, will be at the election and risk of the participating subscription rights holders, but if sent by mail, it is recommended that
such certificates and payments be sent by traceable or registered mail, properly insured, with return receipt requested, and that a sufficient
number of days be allowed to ensure delivery to the Subscription Agent and clearance of payment prior to the Expiration Date and Time.
Whichever of the methods
described above is used, issuance of the shares of Common Stock purchased is subject to (1) collection of checks and actual payment,
or (2) delivery of valid evidence (as determined by the Company in its sole and absolute discretion) of an equivalent amount of
principal and/or accrued and unpaid interest of indebtedness for borrowed money.
If a participating subscription
rights holder who subscribes for shares of Common Stock as part of the subscription right does not make payment of any amounts due by
the Expiration Date and Time, the Subscription Agent reserves the right to take any or all of the following actions: (i) reallocate
the shares of Common Stock to other participating subscription rights holders; (ii) apply any payment actually received by
it from the participating subscription rights holder toward the purchase of the greatest whole number of shares of Common Stock which
could be acquired by such participating subscription rights holder upon exercise of the subscription right; and/or (iii) exercise
any and all other rights or remedies to which it may be entitled, including the right to set off against payments actually received by
it with respect to such subscribed for shares of Common Stock.
All questions concerning
the timeliness, validity, form and eligibility of any subscription payment and exercise of subscription rights will be determined by
the Company, whose determinations will be final and binding. We, in our sole and absolute discretion, may waive any defect or irregularity,
or permit a defect or irregularity to be corrected within such time as we may determine, or reject the purported exercise of any right.
Subscriptions will not be deemed to have been received or accepted until all irregularities have been waived or cured within such time
as we determine in our sole discretion. Neither the Subscription Agent nor the Information Agent will be under any duty to give notification
of any defect or irregularity in connection with the submission of subscription rights certificates or incur any liability for failure
to give such notification.
Participating subscription
rights holders will have no right to rescind their subscription after receipt of their payment for shares of Common Stock.
Receipt of Payment
Your payment will be considered
received by the Subscription Agent only upon receipt by the Subscription Agent of:
| ¨ | A
personal check or bank draft; |
| ¨ | Wire
transfer of immediately available funds directly to the account maintained by Equiniti
Trust Company, LLC, as Subscription Agent; and/or |
| ¨ | The
original evidence of an equivalent amount of any indebtedness for borrowed money (including
principal and/or accrued and unpaid interest) (in accordance with the Instructions for Use
of Non-Transferable Subscription Rights Certificates that accompanied the mailing of this
prospectus and solely after contacting the Company as described above, and further subject
to the Company’s determination, in its sole and absolute discretion, of validity and
eligibility of such indebtedness and the Company’s confirmation, in its sole and absolute
discretion, of any additional documentation that you will be required to deliver). |
Missing or Incomplete Information
If
you hold your shares of Common Stock in the name of a broker, dealer, custodian bank, or other nominee, the nominee will exercise the
subscription rights on your behalf in accordance with your instructions. Your nominee may establish a deadline that may be before the
Expiration Date and Time that we have established for the Rights Offering. If you send a payment that is insufficient to purchase the
number of shares of Common Stock you requested, or if the number of shares of Common Stock you requested is not specified in the forms,
the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment
received, subject to the availability of shares of Common Stock under the over-subscription privilege and the elimination of fractional
shares of Common Stock. Any excess subscription payments received by the Subscription Agent will be returned in the manner and form in
which such payments were made, without interest or penalty, as soon as practicable following the Expiration Date and Time, and
after all necessary calculations, pro rata allocations and adjustments have been
completed.
If you fail to complete and
sign the rights certificate or otherwise fail to follow the subscription procedures that apply to the exercise of your rights before
the Rights Offering expires, the Subscription Agent will reject your subscription or accept it to the extent of the payment received.
Neither we nor our Subscription Agent undertake any responsibility or action to contact you concerning an incomplete or incorrect subscription
form, nor are we under any obligation to correct such forms. We have the sole discretion to determine whether a subscription exercise
properly complies with the subscription procedures.
Expiration of the Rights Offering
and Extensions, Amendments and Termination
You may exercise your subscription
rights at any time before the Expiration Date and Time.
We may, in our sole discretion,
extend the time for exercising the subscription rights. If the commencement of the Rights Offering is delayed for a period of time, the
Expiration Date and Time will be similarly extended.
We will extend the duration
of the Subscription Period as required by applicable law, and may choose to extend it if we decide that changes in the market price of
our Common Stock warrant an extension or if we decide to give investors more time to exercise their subscription rights in the Rights
Offering, although we do not presently intend to do so. We may extend the Expiration Date and Time by giving oral or written notice to
the Subscription Agent and the Information Agent on or before the scheduled Expiration Date and Time. If we elect to extend the expiration
of the Rights Offering, we will issue a press release announcing such extension no later than 9:00 a.m., New York City time, on the next
business day after the most recently announced Expiration Date and Time.
We reserve the right, in
our sole discretion, to amend or modify the terms of the Rights Offering.
If you do not exercise your
subscription rights before the Expiration Date and Time, your unexercised subscription rights will become null and void and will have
no value. We will not be obligated to honor your exercise of subscription rights if the Subscription Agent receives the documents relating
to your exercise after the Rights Offering expires, regardless of when you transmitted the documents, except if you have timely transmitted
the documents under the guaranteed delivery procedures described below.
Termination of the Rights Offering
Our Board of Directors may
terminate the Rights Offering, in whole or in part, in its sole discretion at any time prior to the time the Rights Offering expires
for any reason (including a change in the market price of our Common Stock). If we terminate the Rights Offering, any payments you made
to the Subscription Agent will be refunded in the manner and form in which such payments were made, without interest or penalty, as soon
as practicable following such termination.
Instructions for Completing Your
Subscription Rights Certificate
You should read and follow
the instructions accompanying the subscription rights certificates carefully.
You are responsible for the
method of delivery of your subscription rights certificate(s) with your subscription price payment to the Subscription Agent. If
you send your subscription rights certificate(s) and subscription price payment by mail, we recommend that you send them by traceable
or overnight mail, properly insured, with return receipt requested. You should allow a sufficient number of days to ensure delivery to
the Subscription Agent prior to the time the Rights Offering expires.
Delivery of Subscription Materials
and Payment
The Subscription Agent
for this Rights Offering is Equiniti Trust Company, LLC. You should deliver your subscription rights certificate and payment of the subscription
price, including evidence of our indebtedness for borrowed money, or, if applicable, notices of guaranteed delivery, to the Subscription
agent by one of the methods described below:
By first class mail:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
By registered, certified
or express mail or overnight courier:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
Your delivery to an address
or by any method other than as set forth above will not constitute valid delivery.
If you require further assistance
with exercising your subscription rights, you may call D.F. King & Co., Inc., the Information Agent, at (888) 567-1626.
Foreign Restrictions
Subscription rights certificates
will only be mailed to holders as of the Record Date whose addresses are within the United States (other than an APO or FPO address).
Holders as of the Record Date whose addresses are outside the United States or who have an APO or FPO address and who wish to subscribe
to the Rights Offering either in part or in full should contact the Subscription Agent in writing no later than five business days prior
to the Expiration Date and Time.
Questions About Exercising Subscription
Rights
If you have any questions
or require assistance regarding the method of exercising your subscription rights or requests for additional copies of this document,
the Instructions for Use of Non-Transferable Subscription Rights Certificates or the Notice of Guaranteed Delivery, you should contact
the Information Agent at the address and telephone number set forth above under “Questions and Answers About the Rights Offering”
included elsewhere in this document.
Calculation of Subscription Rights
Exercised
If
you do not indicate the number of subscription rights being exercised, or do not forward full payment of the total subscription price
payment for the number of subscription rights that you indicate are being exercised, then you will be deemed to have exercised your basic
subscription right with respect to the maximum number of subscription rights that may be exercised with the aggregate subscription price
payment you delivered to the Subscription Agent. If your aggregate subscription price payment is greater than the amount you owe for
your subscription, you will be deemed to have exercised your over-subscription privilege to purchase the maximum number of shares of
our Common Stock with your over-payment. If we do not apply your full subscription price payment to your purchase of shares of our Common
Stock, the Subscription Agent will return the excess amount to you in the manner and form in which such payment was made, without interest
or penalty, as soon as practicable following the Expiration Date and Time, and after all necessary
calculations, pro rata allocations and adjustments have been completed.
Regulatory Limitation
We will not be required to
issue to you shares of our Common Stock pursuant to the Rights Offering if, in our opinion, it would be unlawful to do so or you would
be required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares if,
at the time the Rights Offering expires, you have not obtained such clearance or approval. We reserve the right to delay the commencement
of this Rights Offering in certain states or other jurisdictions if necessary to comply with local laws. We may elect not to offer shares
to residents of any state or other jurisdiction whose laws would require a change in this Rights Offering in order to carry out this
Rights Offering in such state or jurisdiction.
All rights issued to a stockholder
of record who would, in our opinion, be required to obtain prior clearance or approval from any state, federal or non-U.S. regulatory
authority for the ownership or exercise of rights or the ownership of additional shares are null and void and may not be held or exercised
by any such holder if, at such time, if applicable, such holder has not obtained such clearance or approval.
Exercising a Portion of Your Rights
If you subscribe for fewer
than all of the shares of our Common Stock represented by your rights certificate, you may receive from the Subscription Agent a new
rights certificate representing your unused rights.
If
you do not indicate the number of rights being exercised, or if you do not make full payment of the total subscription price payment
for the number of rights that you indicate are being exercised, then you will be deemed to have exercised your right with respect to
the maximum number of rights that may be exercised with the aggregate subscription price payment you delivered to the Subscription Agent.
If we do not apply your full subscription price payment to the purchase of shares of Common Stock, the Subscription Agent will return
the excess amount in the manner and form in which such payment was made, without interest or penalty, as soon as practicable following
the Expiration Date and Time, and after all necessary calculations, pro rata
allocations and adjustments have been completed.
Delivering Indebtedness for Borrowed Money as Full or Partial
Payment of Subscription Price
If
you would like to pay some or all of the subscription price for your shares of Common Stock by delivery, in lieu of cash, of an
equivalent amount of indebtedness for borrowed money owed to you by the Company, you must contact the Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention:
Jared E. Shure, Chief Administrative Officer, General Counsel & Secretary
Telephone:
(201) 453-7049
as soon as practicable after the date of this
prospectus (and in any event prior to exercising your subscription rights and delivering any indebtedness for borrowed money in payment
therefor) so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness for
borrowed money to be valid and eligible for delivery in payment of some or all of the subscription price and (ii) confirm the documentation
that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for borrowed money as payment
for some or all of the subscription price. As it may take some time for the Company to evaluate and respond to requests to deliver indebtedness
for borrowed money in full or partial payment of the subscription price and for you, thereafter, to complete and provide the necessary
documentation to the Subscription Agent, the Company strongly recommends that you start this process as soon as possible and not wait
until the final days of the Subscription Period. Your delay in commencing this process may result in your being unable to timely deliver
your indebtedness for borrowed money as full or partial payment of the subscription price, which in turn would result in your purported
exercise of Rights to be paid for with such indebtedness for borrowed money being rejected.
Following
the Company’s determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to be
valid and eligible for delivery in payment of some or all of the subscription price and confirmation, in its sole and absolute discretion,
of the documentation that you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for
borrowed money as payment for some or all of the subscription price, you must deliver to the Subscription Agent prior to the Expiration
Date and Time, at the Subscription Agent’s address set forth above, the original evidence of such indebtedness for borrowed
money (principal and/or accrued and unpaid interest) owed to you by the Company in the amount equivalent to the amount of the subscription
price (in accordance with the Instructions for Use of Non-Transferable Subscription Rights Certificates that accompanied this prospectus),
together with a properly completed and executed subscription rights certificate and any other documentation confirmed to you by the Company.
You should contact the
Company directly at the address or phone number stated above for further details regarding the appropriate documentation to submit in
order to validly deliver evidence of such indebtedness for borrowed money. Such documentation, among other things, will among other things
need to provide for an acknowledgement and agreement that the amount of such indebtedness for borrowed money will be reduced in an amount
equal to the portion of the subscription rights being paid through delivery of such indebtedness.
Guaranteed Delivery Procedures
If you wish to exercise subscription
rights, but you do not have sufficient time to deliver the subscription rights certificate evidencing your subscription rights to the
Subscription Agent before the Expiration Date and Time, you may exercise your subscription rights by the following guaranteed delivery
procedures:
| · | deliver
to the Subscription Agent before the Expiration Date and Time the payment (after contacting
the Company, in the case of any payment to be made by delivery of indebtedness for borrowed
money) for each share you elected to purchase pursuant to the exercise of subscription rights
in the manner set forth above under “Method of Subscription – Exercise of
Rights”; |
| · | deliver
to the Subscription Agent before the Expiration Date and Time the form entitled “Notice
of Guaranteed Delivery”; and |
| · | deliver
the properly completed subscription rights certificate evidencing your subscription rights
being exercised and the form entitled “Nominee Holder Certification”,
if applicable, with any required signatures guaranteed, to the Subscription Agent within
one (1) business day following the date you submit your Notice of Guaranteed Delivery. |
Your
Notice of Guaranteed Delivery must be delivered in substantially the same form provided with the Instructions for Use of Non-Transferable
Subscription Rights Certificates, which will be distributed to you with your subscription rights certificate. Your Notice of Guaranteed
Delivery must include a signature guarantee from an eligible institution, acceptable to the Subscription Agent. A form of that guarantee
is included with the Notice of Guaranteed Delivery.
In your Notice of Guaranteed
Delivery, you must provide:
| · | the
number of rights represented by your subscription rights certificate and the number of shares
of our Common Stock for which you are subscribing under your basic subscription right and
the number of shares of our Common Stock for which you are subscribing under your over-subscription
privilege; and |
| · | your
guarantee that you will deliver to the Subscription Agent a rights certificate evidencing
the subscription rights you are exercising within one (1) business day following the
date the Subscription Agent receives your Notice of Guaranteed Delivery. |
You may deliver your Notice
of Guaranteed Delivery to the Subscription Agent in the same manner as your rights certificate at the address set forth above under “Delivery
of Subscription Materials and Payment”.
The Information Agent will
send you additional copies of the form of Notice of Guaranteed Delivery if you need them. You should call the Information Agent at (888)
567-1626 to request additional copies of the form of Notice of Guaranteed Delivery.
Procedures for DTC Participants
We expect that the exercise
of your basic subscription rights and your over-subscription privilege may be made through the facilities of DTC. If you would like to
pay your entire subscription price in cash, you must elect to exercise your basic subscription right and your over-subscription privilege
through DTC’s PSOP Function on the “agents subscription over PTS” procedures, and instruct DTC to charge the applicable
DTC account for the subscription payment and deliver such cash amount to the Subscription Agent. Shares of Common Stock validly and timely
subscribed and paid for in cash in the Rights Offering will be credited to the applicable DTC participant accounts upon settlement of
the Rights Offering.
If you would like to pay
some or all of the subscription price by delivery, in lieu of cash, of an equivalent amount of indebtedness for borrowed money owed to
you by the Company, you must instruct your broker, dealer, custodian bank, or other nominee to elect to exercise your basic subscription
right and your over-subscription privilege (to the extent you wish to exercise it), with respect to which you will be paying the subscription
price by delivery of such indebtedness, through DTC’s PTOP Function, indicate to DTC that you intend to make the subscription payment
by delivery of such indebtedness, and instruct DTC to transfer your subscription rights from your account to the account of the Subscription
Agent, and more generally follow all of the procedures established by DTC. You will thereafter need to deliver such indebtedness for
borrowed money (after contacting the Company as described under “The Rights Offering – Method of Subscription –
Exercise of Rights” above), along with the appropriate documentation, to the Subscription Agent as described under “The
Rights Offering – Delivering Indebtedness for Borrowed Money as Full or Partial Payment of Subscription Price”
above. Shares of Common Stock validly and timely subscribed and paid for by delivering indebtedness for borrowed money in the Rights
Offering will be delivered by the Subscription Agent directly to the applicable bank, broker or other nominee through the DWAC system
upon settlement of the Rights Offering.
DTC must receive your
rights certificate, Notice of Guaranteed Delivery (if applicable), and (to the extent such payment is cash) payment for the new shares
of Common Stock, and, to the extent your payment is by delivery of indebtedness for borrowed money owed to you by the Company, the Subscription
Agent must receive the original evidence of such indebtedness for borrowed money and any supplemental documentation requested by the
Company, before the Expiration Date and Time, unless guaranteed delivery procedures are utilized with respect to delivery of your rights
certificate (in which case such rights certificate must be received within the period described under “The Rights Offering
– Guaranteed Delivery Procedures”, above).
U.S. Federal Income Tax Consequences
Although the authorities
governing transactions such as the Rights Offering are complex and unclear in certain respects (including with respect to the effects
of the over-subscription privilege), we believe and intend to take the position that a holder’s receipt or exercise of rights should
generally be non-taxable for U.S. federal income tax purposes. This position regarding the non-taxable treatment of the Rights Offering
is, however, not binding on the IRS or the courts. You should consult your tax advisor as to the particular tax consequences to you of
the receipt of rights in the Rights Offering and the exercise or lapse of the rights, including the applicability of any state, local
or non-U.S. tax laws in light of your particular circumstances. For a more detailed discussion, see “Material U.S. Federal Income
Tax Consequences”.
Fees and Expenses
We are not charging any fee
or sales commission to issue rights to you or to issue shares of Common Stock to you if you exercise your rights. If you exercise your
rights through the record holders of your shares of Common Stock, you are responsible for paying any commissions, fees, taxes or other
expenses your record holder may charge you. We will pay all fees and expenses of the Subscription Agent and the Information Agent related
to the Rights Offering and have agreed to indemnify the Subscription Agent and the Information Agent with respect to certain liabilities
that they may incur in connection with the Rights Offering.
No Fractional Rights
We will not issue fractional
subscription rights or cash in lieu of fractional subscription rights. Fractional subscription rights will be rounded down to the nearest
whole number.
No Fractional Shares of Common
Stock
All
shares of Common Stock will be sold at a subscription price of $9.75 per whole share. We will not issue fractional shares of Common Stock
or cash in lieu of fractional shares of Common Stock. Fractional shares of Common Stock resulting from the exercise of basic subscription
rights and the over-subscription privilege will be eliminated by rounding down to the nearest whole share of Common Stock, with such
adjustments as may be necessary to ensure that we offer no more than 9,230,769 shares of Common Stock in this Rights Offering. In the
unlikely event that, because of the rounding of fractional shares of Common Stock, this Rights Offering would have been subscribed in
an amount in excess of 9,230,769 shares of Common Stock, all holders’ shares issued in this Rights Offering will be reduced in
an equitable manner. Any excess subscription payments received by the Subscription Agent will be returned in the manner and form in which
such payments were made, without interest or penalty, as soon as practicable following the Expiration Date and Time, and after
all necessary calculations, pro rata allocations and adjustments have been completed.
Notice to Beneficial Holders/Nominees
If you are a broker, a trustee
or a depositary for securities who holds shares of our Common Stock for the account of others on the Record Date, you should notify the
respective beneficial owners of such shares of the Rights Offering as soon as possible to find out their intentions with respect to exercising
their subscription rights. You should obtain instructions from the beneficial owner with respect to their subscription rights, as set
forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you
should complete the appropriate subscription rights certificates and submit them to the Subscription Agent with the proper payment. If
you hold shares of our Common Stock for the account(s) of more than one beneficial owner, you may exercise the number of subscription
rights to which all such beneficial owners in the aggregate otherwise would have been entitled had they been direct record holders of
our Common Stock on the Record Date, provided that you, as a nominee record holder, make a proper showing to the Subscription
Agent by submitting the form entitled “Nominee Holder Certification” that we will provide to you with your rights offering
materials. If you did not receive this form, you should contact the Subscription Agent to request a copy.
Beneficial Owners
If you are a beneficial
owner of shares of our Common Stock or will receive your subscription rights through a broker, custodian bank, or other nominee, we will
ask your broker, dealer, custodian bank, or other nominee to notify you of the Rights Offering. If you wish to exercise your subscription
rights, you will need to have your broker, dealer, custodian bank, or other nominee act for you. If you hold certificates of our Common
Stock directly and would prefer to have your broker, dealer, custodian bank, or other nominee act for you, you should contact your nominee
and request it to effect the transactions for you. To indicate your decision with respect to your subscription rights, you should complete
and return to your broker, dealer, custodian bank, or other nominee the form entitled “Beneficial Owner Election Form”. You
should receive this form from your broker, dealer, custodian bank, or other nominee with the other rights offering materials. If you
wish to obtain a separate subscription rights certificate, you should contact the nominee as soon as possible and request that a separate
subscription rights certificate be issued to you. You should contact your broker, dealer, custodian bank, or other nominee if you do
not receive this form, but you believe you are entitled to participate in the Rights Offering. We are not responsible if you do not receive
the form from your broker, dealer, custodian bank, or other nominee or if you receive it without sufficient time to respond. To the extent
that you are a beneficial owner of shares of our Common Stock or will receive your subscription rights through a broker, dealer, custodian
bank, or other nominee, and desire to pay some or all of the subscription price by delivering indebtedness for borrowed money in lieu
of cash, you must also contact the Company and follow the other procedures set forth under “The Rights Offering –
Method of Subscription – Exercise of Rights” and “The Rights Offering – Delivering Indebtedness
for Borrowed Money as Full or Partial Payment of Subscription Price” above in respect of the delivery of indebtedness for borrowed
money.
Validity of Subscriptions
We will resolve in our
sole and absolute discretion all questions concerning the timeliness, validity, form and eligibility of any subscription payment and
exercise of subscription rights, including time of receipt and eligibility to participate in the Rights Offering. Our determination will
be final and binding. Once made, subscriptions and directions are irrevocable, and we will not accept any alternative, conditional or
contingent subscriptions or directions. We reserve the absolute right to reject any subscriptions or directions not properly submitted
or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the Expiration
Date and Time, unless we waive them in our sole discretion. Neither we, nor the Information Agent nor the Subscription Agent is under
any duty to notify you or your representative of defects in your subscriptions. A subscription will be considered accepted, subject to
our right to withdraw or terminate the Rights Offering, only when the Subscription Agent receives a properly completed and duly executed
subscription rights certificate and any other required documents and the full subscription payment. Our interpretations of the terms
and conditions of the Rights Offering will be final and binding.
Your
Funds or Evidence of Our Indebtedness for Borrowed Money Will Be Held by the Subscription Agent Until Shares of Our Common
Stock Are Issued or the Withdrawal or Termination of the Rights Offering.
The Subscription Agent
will hold all funds received from subscribing stockholders in a segregated account (or, with respect to any evidence of indebtedness
for borrowed money, in escrow) until we issue your shares of our Common Stock to you upon consummation of the Rights Offering or the
withdrawal or termination of the Rights Offering.
If there is a fundamental
change to the Rights Offering and if you decide to cancel your subscription rights, then the Subscription Agent will return your payment
in the manner and form in which such payment was made, without interest or penalty, as soon as practicable. If you hold your shares through
your broker, dealer, custodian bank, or other nominee, then the cancellation of any subscription rights would have to be initiated by
your broker, dealer, custodian bank, or other nominee.
If the Subscription Agent
returns payments to you through your broker, dealer, custodian bank, or other nominee, then such broker, dealer, custodian bank, or other
nominee may charge you separate service or administration fees. We are not responsible for covering or reimbursing any such fees.
Stockholder Rights
You will have no rights as
a holder of the shares of our Common Stock you purchase in the Rights Offering until DRS statements representing the shares of our Common
Stock are issued to you, or your account at your nominee is credited with the shares of our Common Stock purchased in the Rights Offering.
No Revocation or Change
Once you have exercised your
subscription rights or have instructed your nominee of your subscription request, you may not revoke or change your exercise or request
a return of the subscription price payment. All exercises of subscription rights are irrevocable, even if you learn information about
us that you consider unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase shares
of our Common Stock at the subscription price. Subscription rights not exercised prior to the Expiration Date and Time will expire and
will have no value.
Listing and Trading
Our Common Stock is traded
on Nasdaq under the symbol “PLCE”.
Transferability
The subscription rights
are evidenced by rights certificates and are non-transferable, except that the subscription rights will be transferable by operation
of law. The subscription rights will not be listed for trading on any securities exchange or trading system. The shares of Common Stock
will be transferable following their issuance.
Shares of Common Stock Outstanding
After the Rights Offering
Based on the shares of
our Common Stock issued and outstanding as of December 13, 2024, approximately 22,015,741 shares of our Common Stock will be issued
and outstanding following the Rights Offering assuming full exercise of all subscription rights. This assumes that during the Rights
Offering, we issue no other shares of our Common Stock and that no options for our Common Stock are exercised.
We will not be issuing share
certificates for the Common Stock issued pursuant to this Rights Offering. Issuance of Common Stock will be made electronically via book
entry by Equiniti Trust Company, LLC, our Transfer Agent.
Interests of Our Executive Officers
and Directors in the Rights Offering
Messrs. Turki Saleh
A. AlRajhi and Muhammad Asif Seemab, members of the Board of Directors, are also Managing Directors
of Mithaq, and may be deemed to beneficially own all of the shares of Common Stock currently owned by Mithaq and its subsdiary, Snowball,
and any shares of Common Stock which would be acquired by Mithaq and Snowball upon exercise of its subscription rights in the
Rights Offering. Mithaq has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription rights
distributed to it by the Company in the Rights Offering. More generally, our directors and executive officers who own shares of Common
Stock are permitted, but not required, to participate in the Rights Offering on the same terms and conditions applicable to all holders
of subscription rights.
Interests of Mithaq in the Rights
Offering
Our
largest stockholder, Mithaq, has indicated that it currently intends, but undertakes no obligation, to exercise all of the subscription
rights distributed to it and its subsidiary, Snowball, by the Company in the Rights Offering, as well as the over-subscription privilege,
and that it currently intends, but undertakes no obligation, to pay some or all of the subscription price payable upon the exercise of
any such subscription rights directly held by Mithaq with indebtedness for borrowed money owed by the Company to Mithaq (including any
indebtedness for borrowed money then-outstanding pursuant to Mithaq Term Loans). We expect the total subscription price payable upon
the exercise of all of such rights by Mithaq and Snowball, excluding any additional subscription price that might be payable in connection
with any exercise by Mithaq and Snowball of the over-subscription privilege, to be approximately $49,289,077.50. If Mithaq
and Snowball fully exercised their rights in the Rights Offering (including its over-subscription privilege) and no other holder
of rights exercised its rights in the Rights Offering, Mithaq’s ownership percentage
of our outstanding Common Stock would increase to approximately 73.7% after giving effect to this Rights Offering and assuming (i) no
other changes in our Common Stock outstanding between the Record Date and the Expiration Date and Time and that (ii) Mithaq continues
to hold all of the shares of Common Stock stated to be held by it and Snowball in Mithaq’s most recent amendment to its Beneficial
Ownership Report on Schedule 13D filed in respect of the Company. See “The Rights Offering – Participation of Our Directors,
Executive Officers and Significant Stockholders” and “Risk Factors – Risks Related to Our Stock and Stock Price
– We have a controlling stockholder who, following the Rights Offering, may continue owning a majority of our outstanding shares
of Common Stock, and as a result controls all matters requiring shareholder approval.”
No Recommendation
An investment in shares
of our Common Stock must be made according to each investor’s evaluation of such investor’s own best interests and after
considering all of the information herein, including the “Risk Factors” section beginning on page 11 of this
prospectus. No valuation consultant or investment banker has opined or is expected to opine upon the fairness or adequacy of the subscription
price.
Neither the Company nor its
Board of Directors is making any recommendation to stockholders as to whether to exercise their rights in the Rights Offering. You should
make an independent investment decision about whether to exercise your rights based on your own assessment of your best interests and
of our business and financial condition, our prospects for the future, the terms of the Rights Offering and the information contained
in, or incorporated by reference in, this prospectus, as it may be supplemented from time to time
Each holder is urged to obtain
a recent trading price for the subscription rights on Nasdaq from their broker, bank, financial advisor or the financial press.
DESCRIPTION
OF CAPITAL STOCK
The following description
of the material terms of the Common Stock is a summary that is not complete and is qualified in its entirety by reference to the Company’s
Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and the Company’s Eighth
Amended and Restated Bylaws, as amended (the “Bylaws”). Because this is only a summary, it may not contain all the
information that is important to you.
Authorized Capital Stock
Our authorized capital stock
consists of (i) 100,000,000 shares of Common Stock, par value of $0.10 per share and (ii) 1,000,000 shares of preferred stock,
par value of $1.00 per share (“Preferred Stock”).
Common Stock
Voting Rights
Holders of our Common Stock,
at every meeting of stockholders of the Company, are entitled to one vote on each matter submitted to a vote of stockholders for each
share of Common Stock held as of the Record Date for such meeting.
Dividend Rights
Subject to the rights, if
any, of the holders of the Preferred Stock, the holders of the Common Stock are entitled to all dividends declared and paid by the Company,
if any, as may be declared from time to time by the Board of Directors in its discretion.
Liquidation Rights
Subject to the rights, if
any, of the holders of the Preferred Stock, the holders of the Common Stock shall be entitled to all assets of the Company available
for distribution to stockholders in the event of any liquidation, dissolution or winding up of the Company.
Other Rights and Preferences
There are no preemptive,
conversion or exchange rights or other subscription rights, and there are no redemption or sinking fund provisions, applicable to the
Common Stock. The rights, preferences and privileges of the holders of our Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of shares of any series of Preferred Stock that we may designate and issue in the future. There are no
provisions in our Certificate of Incorporation or Bylaws discriminating against a stockholder because of such stockholder’s ownership
of a particular number of shares of Common Stock.
Preferred Stock
Under our Certificate of
Incorporation, our Board of Directors is authorized to direct us to issue “blank check” Preferred Stock. Preferred Stock
may be issued (A) in one or more series and with such designations, powers, preferences, rights, and such qualifications, limitations
or restrictions thereof, as the Board of Directors shall fix by resolution or resolutions which are permitted by Section 151 of
the DGCL for any such series of Preferred Stock, and (B) in such number of shares in each such series as the Board of Directors
shall, by resolution, fix, provided that the aggregate number of all shares of Preferred Stock issued shall not exceed the number of
shares of Preferred Stock authorized by the Certificate of Incorporation. The authorized shares of our Preferred Stock are available
for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock
exchange on which our securities are listed. If the approval of our stockholders is not required for the issuance of shares of our Preferred
Stock, our Board of Directors may determine not to seek stockholder approval.
As of December 13,
2024, the Company had no shares of preferred stock issued and outstanding.
A series of our Preferred
Stock could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt. Our Board
of Directors will make any determination to issue such shares based upon its judgment as to the best interests of our stockholders. Our
Board of Directors, in so acting, could issue Preferred Stock having terms that could discourage an acquisition attempt through which
an acquirer may be able to change the composition of our Board of Directors, including a tender offer or other transaction that some,
or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their
stock over the then-current market price of the stock.
Anti-Takeover Effects of Various Provisions of Delaware Law and
our Certificate of Incorporation and Bylaws
Provisions of the DGCL and
our Certificate of Incorporation and Bylaws could make it more difficult to acquire us by means of a tender offer, a proxy contest or
otherwise, or to remove incumbent officers and directors. These provisions, summarized below, are expected to discourage certain types
of coercive takeover practices and takeover bids that our Board of Directors may consider
inadequate and to encourage persons seeking to acquire control of us to first negotiate with our Board
of Directors. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because,
among other things, negotiation of these proposals could result in improved terms for our stockholders.
Business Combinations
We are subject to Section 203
of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL provides that a corporation shall not engage in any business
combination with any interested stockholder for a period of three years following the time that such stockholder became an interested
stockholder, unless (1) prior to such time the board of directors of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an interested stockholder; (2) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of
the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding
(but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and
also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer; or (3) at or subsequent to such time the business
combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 662/3% of the outstanding voting stock which is not owned by the interested stockholder.
These restrictions are subject to certain exceptions specified in Section 203(b) of the DGCL. The term “interested stockholder”
is generally defined by Section 203 of the DGCL as any person that (i) is the owner of 15% or more of the outstanding voting
stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder, and the affiliates and associates of such person.
The term “business
combination” is defined broadly under Section 203 of the DGCL, and includes the following:
| · | Any
merger or consolidation of the corporation or any direct or indirect majority-owned subsidiary
of the corporation with (A) the interested stockholder, or (B) with any other corporation,
partnership, unincorporated association or other entity if the merger or consolidation is
caused by the interested stockholder and as a result of such merger or consolidation subsection
(a) of Section 203 of the DGCL is not applicable to the surviving entity; |
| · | Any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in 1 transaction
or a series of transactions), except proportionately as a stockholder of such corporation,
to or with the interested stockholder, whether as part of a dissolution or otherwise, of
assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation
which assets have an aggregate market value equal to 10% or more of either the aggregate
market value of all the assets of the corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the corporation; |
| · | Any
transaction which results in the issuance or transfer by the corporation or by any direct
or indirect majority-owned subsidiary of the corporation of any stock of the corporation
or of such subsidiary to the interested stockholder, except: (A) pursuant to the exercise,
exchange or conversion of securities exercisable for, exchangeable for or convertible into
stock of such corporation or any such subsidiary which securities were outstanding prior
to the time that the interested stockholder became such; (B) pursuant to a merger under
§251(g) of the DGCL; (C) pursuant to a dividend or distribution paid or made,
or the exercise, exchange or conversion of securities exercisable for, exchangeable for or
convertible into stock of such corporation or any such subsidiary which security is distributed,
pro rata to all holders of a class or series of stock of such corporation subsequent
to the time the interested stockholder became such; (D) pursuant to an exchange offer
by the corporation to purchase stock made on the same terms to all holders of said stock;
or (E) any issuance or transfer of stock by the corporation; provided however, that
in no case under items (C)-(E) of this subparagraph shall there be an increase in the
interested stockholder’s proportionate share of the stock of any class or series of
the corporation or of the voting stock of the corporation; |
| · | Any
transaction involving the corporation or any direct or indirect majority-owned subsidiary
of the corporation which has the effect, directly or indirectly, of increasing the proportionate
share of the stock of any class or series, or securities convertible into the stock of any
class or series, of the corporation or of any such subsidiary which is owned by the interested
stockholder, except as a result of immaterial changes due to fractional share adjustments
or as a result of any purchase or redemption of any shares of stock not caused, directly
or indirectly, by the interested stockholder; or |
| · | Any
receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately
as a stockholder of such corporation), of any loans, advances, guarantees, pledges or other
financial benefits (other than those expressly permitted in paragraphs (c)(3)(i)-(iv) of
Section 203(b) of the DGCL) provided by or through the corporation or any direct
or indirect majority-owned subsidiary. |
The existence of this provision
would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our Board of Directors, including
discouraging attempts that might result in a premium over the market price for the shares of Common Stock held by stockholders.
These anti-takeover provisions
could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many
of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. These provisions
could limit the price that investors might be willing to pay in the future for shares of our Common Stock.
Size of Board and Vacancies
Our Bylaws provide that
the number of directors on our Board of Directors shall be not less than three nor more than 12 and the exact number shall be fixed from
time to time by the Board of Directors. Subject to the rights, if any, of the holders of any Preferred Stock, the vacancies on our Board
of Directors (whether by reason of resignation, removal, an increase in the number of directors or otherwise) may be filled generally
by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by the sole remaining director.
Our Bylaws permit stockholders to remove any director with or without cause.
Indemnification of Directors and Officers
Section 102 of the DGCL
permits a corporation to eliminate the personal liability of its directors and officers or its stockholders for monetary damages for
a breach of fiduciary duty as a director or officer, except where the director or officer breached his or her duty of loyalty, failed
to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved
a stock repurchase in violation of Delaware corporate law (as a director) or obtained an improper personal benefit. The Certificate of
Incorporation provides that no director shall be personally liable to the Company or its stockholders for monetary damages for any breach
of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits
the elimination or limitation of liability of directors for breaches of fiduciary duty.
Section 145 of the DGCL
provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons
serving at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which
he or she is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines
that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Our Bylaws provide that any
person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact
that he or she is or was a director, officer, employee or agent of the Company or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including employee
benefit plans) will be indemnified and held harmless by the Company to the fullest extent authorized by the DGCL, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such indemnitee in connection
with such action, suit or proceeding, if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe
such conduct was unlawful.
The Company maintains a general
liability insurance policy which covers certain liabilities of its directors and officers arising out of claims based on acts or omissions
in their capacities as directors or officers.
Special Stockholder Meetings
Our Bylaws provide that
special meetings of the stockholders for any purpose or purposes (i) may be called at any time by (A) the Chairman or Vice-Chairman
of the Board of Directors, or (B) the Secretary of the Company within ten (10) calendar days after receipt of a written request
from a majority of the total number of directors which the Company would have if there were no vacancies, and (ii) subject to certain
provisions of the Bylaws, must be called by the Secretary of the Company upon delivery of a written request in proper form to the Secretary
by one or more stockholders that collectively own not less than 25% of the issued and outstanding shares of Common Stock entitled to
vote generally in an election of directors.
Prohibition of Stockholder Action by Written Consent
Our Certificate of Incorporation
expressly prohibits our stockholders from acting by written consent. Stockholder action will be required to take place at an annual or
a special meeting of our stockholders.
Advanced Notice Procedures
Our Bylaws establish advance
notice procedures with respect to stockholder proposals. To be timely, a stockholder’s notice must be delivered to or mailed and
received at the principal executive offices of the Company not less than ninety (90) days nor more than one hundred twenty (120) days
prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that
the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder
in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on
which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs. In no event shall an adjournment, postponement or deferral, or public disclosure of an adjournment, postponement
or deferral, of a meeting of stockholders commence a new time period (or extend any time period) for the giving of the notice of business.
In addition, nominations for directors of the Company may be made at an annual meeting of stockholders by any stockholders who
complies with the information and timely notice requirements of the Bylaws.
Transfer Agent and Registrar
Equiniti Trust Company, LLC
is the Transfer Agent and registrar for our Common Stock.
Listing
Our Common Stock is traded
on Nasdaq under the trading symbol “PLCE”.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion
is a summary of material U.S. federal income tax consequences relating to the receipt, exercise, transfer and expiration of the subscription
rights acquired by U.S. holders and non-U.S. holders (each as defined herein and collectively referred to as “holders”)
by distribution from the Company in the Rights Offering and the ownership and disposition of shares of our Common Stock received upon
exercise of such subscription rights. This summary is based on the Code, the Treasury Regulations promulgated thereunder, published administrative
positions of the IRS and judicial decisions, all as in effect on the date hereof. Those authorities may be changed or subject to new
interpretations, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those summarized
below. We have not sought, and do not expect to seek, any ruling from the IRS with respect to the statements made and the conclusions
reached in the following summary, and there can be no assurance that the IRS or a court will agree with our statements and conclusions
or that a court would not sustain any challenge by the IRS in the event of litigation. Moreover, this summary does not address any U.S.
federal non-income (including estate or gift), state, local or non-U.S. tax considerations, the Medicare tax imposed on certain net investment
income or considerations under any applicable tax treaty.
This summary applies only
to holders (1) that acquire the subscription rights by distribution from the Company in the Rights Offering (and only with respect
to subscription rights so acquired), and (2) that will hold shares of our Common Stock acquired upon exercise of subscription rights
as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This summary
is general in nature and does not purport to deal with all aspects of U.S. federal income taxation that may be relevant to particular
holders in light of their personal circumstances or status (for example, U.S. holders subject to the alternative minimum tax) or special
rules that may apply to certain holders, including, without limitation, financial institutions, regulated investment companies,
real estate investment trusts, holders who are dealers in securities or foreign currency, traders in securities that elect to use a mark-to-market
method of accounting for securities holdings, tax-exempt organizations, insurance companies, S-corporations, persons liable for alternative
minimum tax, holders who hold such stock as part of a hedge, straddle, conversion, constructive sale or other integrated security transaction,
holders whose functional currency is not the U.S. dollar, or holders who received our Common Stock on which the subscription rights are
distributed in satisfaction of our indebtedness or as compensation. Additionally, this discussion does not address U.S. holders who beneficially
own our shares through either a “foreign financial institution” (as such term is defined in Section 1471(d) (4) of
the Code) or certain other non-U.S. entities specified in Section 1472 of the Code.
In addition, this summary
applies only to holders that exercise their subscription rights for cash. The U.S. federal income tax treatment of holders that exercise
their subscription rights (in whole or in part) by delivering indebtedness for borrowed money of the Company will depend on the terms
of the indebtedness delivered and the circumstances under which the holder acquired and holds that indebtedness. Holders that intend
to exercise subscription rights by delivering indebtedness of the Company are urged to consult their tax advisors as to the U.S. federal
income tax consequences applicable to them in light of their particular circumstances.
If any entity or arrangement
that is treated as a partnership for U.S. federal income tax purposes is the beneficial owner of our subscription rights or shares of
our Common Stock, the U.S. federal income tax treatment of a partner or owner in such partnership generally will depend upon the tax
status of the partner and the activities of the partner and the partnership. Holders that are partnerships (and partners or owners in
such partnerships) are urged to consult their own tax advisors as to the particular U.S. federal income tax consequences applicable to
them.
THE FOLLOWING DISCUSSION
IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE. HOLDERS OF SHARES OF OUR COMMON STOCK
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS
AND THE CONSEQUENCES UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES OF THE RECEIPT, OWNERSHIP,
EXERCISE AND EXPIRATION OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK.
Tax Consequences to U.S. Holders
A “U.S. holder”
means a beneficial owner of subscription rights or shares of our Common Stock that is or is treated as, for U.S. federal income tax purposes,
any of the following:
| · | an
individual who is a citizen or resident of the United States; |
| · | a
corporation created or organized in or under the laws of the United States or any state thereof
or the District of Columbia; |
| · | an
estate the income of which is subject to U.S. federal income taxation regardless of its source;
or |
| · | a
trust if it (1) is subject to the primary supervision of a court within the United States
and one or more United States persons, as defined under Section 7701(a)(30) of the Code,
have the authority to control all substantial decisions of the trust or (2) has a valid
election in effect under applicable United States Treasury Regulations to be treated as a
United States person. |
Taxation of Subscription Rights
Receipt of Subscription Rights
Although the authorities governing transactions
such as this Rights Offering are complex and do not speak directly to the consequences of certain aspects of this Rights Offering (including
with respect to the effects of the over-subscription privilege), we believe that a U.S. holder’s receipt of subscription rights
pursuant to the Rights Offering should not be treated as a taxable distribution with respect to the holder’s existing shares of
Common Stock for U.S. federal income tax purposes and intend to take the position that such receipt will be a non-taxable distribution.
Pursuant to Section 305(a) of the Code, in general, the receipt by a stockholder of a right to acquire stock should not be
included in the taxable income of the recipient. The general rule of nonrecognition under Section 305(a) of the Code is
subject to exceptions under Section 305(b) of the Code, which include a distribution or a series of distributions (including
a deemed distribution) that has the effect of the receipt of cash or other property by some stockholders and an increase in the proportionate
interest of other stockholders in a corporation’s assets or earnings and profits (such distributions, “disproportionate
distributions”). We do not believe the receipt of the subscription rights should be treated as a disproportionate distribution,
but the rules related to disproportionate distributions are complex. The Treasury Regulations under Section 305 of the Code
generally treat distributions of cash or non-stock property within 36 months of another distribution as a series of distributions. During
the last 36 months, we have not made any distributions of cash or non-stock property (excluding for this purpose, other issuances of
subscription rights) with respect to our Common Stock. Currently we do not intend to make any future distributions of cash or non-stock
property with respect to our Common Stock; however, there is no guarantee that we will not make such distributions in the future.
Our position regarding the tax-free treatment
of the subscription rights distribution is not binding on the IRS or the courts. If this position is finally determined by the IRS or
a court to be incorrect, whether on the basis that the issuance of the subscription rights is a disproportionate distribution or otherwise,
the fair market value of the subscription rights upon receipt would be taxable to holders of our Common Stock to which the subscription
right is distributed as a dividend to the extent of the holder’s pro rata share of our current and accumulated earnings
and profits, if any, with any excess being treated as a return of capital to the extent thereof and then as capital gain.
The following discussion assumes that the distribution
of the subscription rights is a non-taxable distribution to holders of our Common Stock for U.S. federal income tax purposes.
Tax Basis in the Subscription Rights
If the fair market value of the subscription
rights a U.S. holder receives is less than 15% of the fair market value of the holder’s existing shares of our Common Stock (with
respect to which the subscription rights are distributed) on the date the holder receives the subscription rights, the subscription rights
will be allocated a zero-dollar basis for U.S. federal income tax purposes, unless the holder elects to allocate the holder’s basis
in the holder’s existing shares of our Common Stock (with respect to which the subscription rights are distributed) between the
holder’s existing shares of our Common Stock and the subscription rights in proportion to the relative fair market values of the
existing shares of our Common Stock and the subscription rights, determined on the date of receipt of the subscription rights. If a U.S.
holder chooses to allocate basis between the holder’s existing shares of our Common Stock and the subscription rights, the holder
must make this election on a statement included with the holder’s timely filed tax return (including extensions) for the taxable
year in which the holder receives the subscription rights. Such an election is irrevocable.
However, if the fair market value of the subscription
rights a holder receives is 15% or more of the fair market value of the holder’s existing shares of our Common Stock (with respect
to which the subscription rights are distributed) on the date the holder receive the subscription rights, then the holder must allocate
the holder’s basis in the holder’s existing shares of our Common Stock (with respect to which the subscription rights are
distributed) between those shares and the subscription rights the holder receives in proportion to their fair market values determined
on the date the holder receives the subscription rights.
The fair market value of the subscription rights
on the date that the subscription rights are distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal
of the fair market value of the subscription rights. In determining the fair market value of the subscription rights, you are urged to
consider all relevant facts and circumstances, including any difference between the subscription price of the subscription rights and
the trading price of our shares of our Common Stock on the date that the subscription rights are distributed, the length of the period
during which the subscription rights may be exercised and the fact that the subscription rights are non-transferable.
Exercise of Subscription Rights
Generally, a U.S. holder will not recognize gain
or loss upon the exercise of subscription rights in the Rights Offering. A U.S. holder’s adjusted tax basis in the shares of our
Common Stock acquired upon exercise of the subscription rights will equal the sum of its adjusted tax basis, if any, in the subscription
rights as determined above under “Tax Basis in the Subscription Rights” plus an amount equal to such U.S. holder’s
subscription price. The holding period of shares of our Common Stock acquired upon exercise of subscription rights in the Rights Offering
will begin on the date of exercise.
If you exercise subscription rights received
in the Rights Offering after disposing of the shares of our Common Stock with respect to which such subscription rights are received,
then certain aspects of the tax treatment of the exercise of the subscription rights are unclear, including (1) the allocation of
the tax basis between the shares of our Common Stock previously sold and the subscription rights, (2) the impact of such allocation
on the amount and timing of gain or loss recognized with respect to the shares of our Common Stock previously sold and (3) the impact
of such allocation on the tax basis of the shares of our Common Stock upon exercise of the subscription rights. If a U.S. holder exercises
subscription rights received in the Rights Offering after disposing of shares of our Common Stock with respect to which the subscription
rights are received, the U.S. holder is urged to consult with the holder’s own tax advisor regarding the tax treatment of the exercise
of the subscription rights.
Expiration of Subscription Rights
If a U.S. holder allows subscription rights received
in the Rights Offering to expire without being exercised, the U.S. holder should not recognize any gain or loss for U.S. federal income
tax purposes, and the U.S. holder should re-allocate any portion of the tax basis in the holder’s existing shares of our Common
Stock previously allocated to the subscription rights that have expired to the existing shares of our Common Stock with respect to which
such subscription rights were received. If a U.S. holder allows subscription rights to expire after disposing of shares of our Common
Stock with respect to which the subscription rights are received, the U.S. holder is urged to consult with the holder’s own tax
advisor regarding the tax treatment of the expiration of the subscription rights.
Taxation of Common Stock
Distributions
Distributions with respect to shares of our Common
Stock acquired upon exercise of subscription rights will be taxable as dividend income when actually or constructively received to the
extent of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes.
Dividend income received by certain non-corporate
U.S. holders with respect to shares of our Common Stock generally will be “qualified dividends” subject to preferential rates
of U.S. federal income tax, under current law, provided that the U.S. holder meets the applicable holding period and other requirements.
Dividend income on shares of our Common Stock paid to U.S. holders that are domestic corporations generally will qualify for the dividends-received
deduction if the requisite holding period is satisfied.
To the extent that the amount of a distribution
exceeds our current and accumulated earnings and profits, such distribution will be treated first as a tax-free return of capital to
the extent of the holder’s adjusted tax basis in such shares of our Common Stock and thereafter as capital gain. Such capital gain
will be long-term capital gain if the holder’s holding period for such shares is more than one year at the time of the applicable
distribution. Under current law, long-term capital gain of a non-corporate U.S. holder is generally taxed at preferential rates of U.S.
federal income tax.
Sale, Exchange, Redemption or Other Taxable
Disposition of Common Stock
If a U.S. holder sells or otherwise disposes
of shares of our Common Stock acquired upon exercise of subscription rights in a taxable transaction, the U.S. holder will generally
recognize capital gain or loss equal to the difference between the amount realized and the holder’s adjusted tax basis in the shares.
The amount realized is generally the amount of cash received plus the fair market value of any other property received for such shares.
Such capital gain or loss will be long-term capital gain or loss if the holder’s holding period for such shares is more than one
year at the time of disposition. Under current law, long-term capital gain of a non-corporate U.S. holder is generally taxed at preferential
rates of U.S. federal income tax. The deductibility of capital losses is subject to limitations.
Information Reporting and Backup Withholding
A U.S. holder may be subject to information reporting
and/or backup withholding with respect to dividend payments and the gross proceeds from the disposition of shares of our Common Stock
acquired through the exercise of subscription rights. Backup withholding may apply under certain circumstances if the U.S. holder (i) fails
to furnish the holder’s social security or other taxpayer identification number (a “TIN”), (ii) furnishes
an incorrect TIN, (iii) fails to report interest or dividends properly, or (iv) fails to provide a certified statement, signed
under penalty of perjury, that the TIN provided is correct, that the holder is not subject to backup withholding and that the U.S. holder
is a United States person for U.S. federal income tax purposes on IRS Form W-9. Any amount withheld from a payment under the backup
withholding rules is allowable as a credit against (and may entitle the holder to a refund with respect to) the holder’s U.S.
federal income tax liability, provided that the required information is timely furnished to the IRS. Certain persons are exempt from
information reporting and backup withholding, including corporations and certain financial institutions, provided that they demonstrate
their exempt status. U.S. holders are urged to consult their own tax advisors as to their qualification for exemption from backup withholding
and the procedure for obtaining such exemption.
Tax Consequences to Non-U.S. Holders
A “non-U.S. holder” means
a beneficial owner of subscription rights or shares of our Common Stock that is, for U.S. federal income tax purposes, an individual,
corporation, estate or trust and is not a U.S. holder.
Taxation of the Subscription Rights
Receipt, Exercise and Expiration of the Subscription
Rights
The discussion below assumes that the receipt
of subscription rights will be treated as a non-taxable distribution as discussed above. In such case, non-U.S. holders will not be subject
to U.S. federal income tax (or any withholding thereof) on the receipt, exercise or expiration of the subscription rights. It is possible
that the receipt of the subscription rights could be a taxable event and taxable as a distribution on our Common Stock. Please see “Tax
Consequences to U.S. Holders – Taxation of Subscription Rights – Receipt of Subscription Rights” above and “Taxation
of Distributions on Common Stock” below.
Taxation of Distributions on Common Stock
Any distributions of cash or property to a non-U.S.
holder made with respect to our Common Stock acquired upon exercise of subscription rights generally will be subject to withholding tax
to the extent paid out of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes, if any,
at a rate of 30% (or a lower rate prescribed by an applicable income tax treaty). In order to obtain a reduced withholding tax rate under
a tax treaty, if applicable, a non-U.S. holder will be required to provide a properly completed IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable, certifying the holder’s entitlement to benefits under a treaty. In addition, a non-U.S. holder will not be subject
to withholding tax if the non-U.S. holder provides an IRS Form W-8ECI certifying that the distributions are effectively connected
with the holder’s conduct of a trade or business within the United States (and, if an applicable income tax treaty so provides,
are attributable to a permanent establishment or fixed base maintained by such non-U.S. holder within the United States); instead,
the non-U.S. holder generally will be subject to U.S. federal income tax, net of certain deductions, with respect to such income at the
same rates applicable to United States persons. If a non-U.S. holder is a corporation, a “Branch Profits Tax” of 30% (or
a lower rate prescribed by an applicable income tax treaty) also may apply to such effectively connected income. Non-U.S. holders may
be required to periodically update their IRS Forms W-8. The U.S. federal income tax treatment of any distribution is also subject to
the discussion below under the headings “Information Reporting and Backup Withholding” and “FATCA.”
Sale or Other Disposition of Our Common Stock
Subject to the discussions
below regarding backup withholding and FATCA, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain
realized on a sale or other disposition of shares of our Common Stock acquired upon exercise of subscription rights unless:
| · | such
gain is effectively connected with the holder’s conduct of a trade or business within
the United States (and, if an applicable income tax treaty so provides, is attributable to
a permanent establishment or fixed base maintained by such non-U.S. holder in the United
States); |
| · | such
non-U.S. holder is an individual who is present in the United States for 183 days or more
during the taxable year in which gain is realized and certain other conditions are met;
or |
| · | we
are or have been a “United States real property holding corporation”, (a “USRPHC”),
for U.S. federal income tax purposes during the five-year period preceding such disposition
(or the Non-U.S. holder’s holding period, if shorter) unless our Common Stock is regularly
traded on an established securities market and the non-U.S. holder held no more than 5% of
our outstanding Common Stock, directly or indirectly, actually or constructively, during
the shorter of the five-year period ending on the date of the disposition or the period that
the non-U.S. holder held our Common Stock |
Gain that is effectively connected with the Non-U.S.
holder’s conduct of a trade or business within the United States (and, if an applicable income tax treaty so provides, is attributable
to a permanent establishment or fixed base maintained by such Non-U.S. holder within the United States) generally will be subject to
U.S. federal income tax, net of certain deductions, at the same rates applicable to U.S. persons. If a Non-U.S. holder is a corporation,
a Branch Profits Tax of 30% (or a lower rate prescribed in an applicable income tax treaty) also may apply to such effectively connected
gain.
A domestic corporation is treated as a USRPHC
if the fair market value of its United States real property interests equals or exceeds 50% of the sum of (1) the fair market value
of its United States real property interests, (2) the fair market value of its non-United States real property interests, and (3) the
fair market value of any other of its assets which are used or held for use in a trade or business. Although there can be no assurance,
we believe that we are not currently, and we do not anticipate becoming, a USRPHC. In addition, no assurance can be provided that our
Common Stock will be regularly traded on an established securities market. Non-U.S. holders are urged to consult their own tax advisors
regarding the U.S. federal income tax considerations that could result if we are, or become, a USRPHC and the exception for 5% or less
stockholders.
Information Reporting and Backup Withholding
Generally, distributions on our Common Stock
and the amount of tax, if any, withheld with respect to such distributions will be reported annually to the IRS and to non-U.S. holders.
Copies of the information returns reporting such distributions and withholding may also be made available to the tax authorities in the
country in which a non-U.S. holder resides under the provisions of an applicable income tax treaty.
If a non-U.S. holder complies with certification
procedures to establish that the holder is not a United States person, backup withholding generally should not apply to distributions
on our Common Stock and information reporting and backup withholding generally should not apply to the proceeds from a sale or other
disposition of shares of our Common Stock. Generally, a non-U.S. holder will comply with such procedures if it provides a properly executed
IRS Form W-8BEN or W-8BEN-E (or other IRS Form W-8), as applicable, or otherwise meets documentary evidence requirements for
establishing that it is a not a United States person, or otherwise establishes an exemption. The amount of any backup withholding will
generally be allowed as a refund or credit against the non-U.S. holder’s U.S. federal income tax liability, provided that the required
information is timely furnished to the IRS.
FATCA
Provisions of the Code commonly referred to as
the Foreign Account Tax Compliance Act (“FATCA”), generally impose a 30% withholding tax on dividends on our Common
Stock and gross proceeds from the sale or other disposition of our Common Stock if paid to a foreign entity unless (1) if the foreign
entity is a “foreign financial institution,” the foreign entity undertakes certain due diligence, reporting, withholding,
and certification obligations, (2) if the foreign entity is not a “foreign financial institution,” the foreign entity
identifies certain of its U.S. investors, or (3) the foreign entity is otherwise exempted under FATCA.
Withholding under FATCA generally applies to
payments of dividends on our Common Stock. While withholding under FATCA may apply to payments of gross proceeds from a sale or other
disposition of our Common Stock, under proposed Treasury Regulations, withholding on payments of gross proceeds is not required. Although
such regulations are not final, applicable withholding agents may rely on the proposed regulations until final regulations are issued.
If withholding under FATCA is required on any
payment related to our Common Stock, holders not otherwise subject to withholding (or that otherwise would be entitled to a reduced rate
of withholding) on such payment may be able to seek a refund or credit from the IRS. An intergovernmental agreement between the United
States and an applicable foreign country may modify the requirements described in this section. Non-U.S. holders should consult their
own tax advisors regarding the possible implications of FATCA on their investment in our Common Stock and the entities through which
they hold our Common Stock.
THE PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL
INCOME TAX CONSEQUENCES IS NOT TAX ADVICE. HOLDERS OF SUBSCRIPTION RIGHTS AND SHARES OF OUR COMMON STOCK ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES UNDER
FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES OF THE RECEIPT, OWNERSHIP, EXERCISE AND EXPIRATION OF
SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK ACQUIRED UPON EXERCISE OF SUBSCRIPTION
RIGHTS.
PLAN
OF DISTRIBUTION
On or about December 24,
2024, the subscription rights will be distributed to holders of record of our Common Stock as of the Record Date. If you wish to exercise
your subscription rights and purchase shares of Common Stock in this Rights Offering, you should timely comply with the procedures described
in “The Rights Offering”.
The shares of Common Stock
offered pursuant to this Rights Offering are being offered by us directly to all holders of our Common Stock. We intend to distribute
subscription materials, including rights certificates, to those persons that were holders of our Common Stock on the Record Date.
The Rights Offering is
being made to raise capital for general corporate purposes, and to provide the Company with an opportunity to raise capital and deleverage
and more generally strengthen the Company’s balance sheet (including through a reduction of the Company’s indebtedness).
Except as set forth below,
we have not employed any brokers, dealers or underwriters in connection with the solicitation of exercise of the rights.
Financial Advisor
We
have engaged Roth, a broker-dealer registered with the Financial Industry Regulatory Authority, to provide certain financial advisory
services in connection with the Rights Offering. In its capacity as our financial advisor, Roth is expected to provide advice to
us regarding the pricing for the Rights Offering. Roth is not engaged in the solicitation of exercise of the rights
or distribution of the rights.
As
compensation for its financial advisory services rendered in connection with the structuring of the Rights Offering,
we have agreed to pay Roth a $200,000 advisory fee. We also agreed to reimburse Roth for its reasonable and documented
out-of-pocket expenses incurred in connection with its services. Neither Roth nor any other
broker-dealer is acting as an underwriter in the Rights Offering nor will Roth or any other
broker-dealer be obligated to purchase any shares of our Common Stock in the Rights Offering. We
have agreed to indemnify Roth against certain losses and liabilities in connection with its engagement.
Roth may in the future provide
other investment banking services to us and will receive compensation for such services. In the ordinary course of its business as a
broker-dealer, Roth may also purchase securities from and sell securities to us and may actively trade our equity or debt securities
for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.
Subscription Agent and
Information Agent
We have retained Equiniti
Trust Company, LLC to serve as our Subscription Agent and Transfer Agent for the Rights Offering and D.F. King & Co., Inc.
to serve as our Information Agent for the Rights Offering. We will pay all customary fees and expenses of the Subscription Agent and
the Information Agent related to this Rights Offering. We have also agreed to indemnify the Subscription Agent and the Information Agent
with respect to certain liabilities that they may incur in connection with this Rights Offering. Our officers and directors may solicit
responses from the holders of subscription rights in connection with this Rights Offering, but such officers and directors will not receive
any commissions or compensation for such services other than their normal compensation.
Electronic Distribution
This prospectus may be made
available in electronic format on websites or via email or through other online services maintained by the Company. Other than this prospectus
in electronic format, the information on the Company’s website and any information contained in any other websites maintained by
the Company is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved
or endorsed by us, and should not be relied upon by investors.
Price Stabilization, Short
Positions
No person has been authorized
by our company to engage in any form of price stabilization in connection with the Rights Offering.
Total Expenses
We estimate that we will
incur approximately $1,458,779 in total expenses in connection with the Rights Offering.
Transferability
The subscription rights
are non-transferable, except that the subscription rights will be transferable by operation of law. The rights will not be listed for
trading on Nasdaq or any other stock exchange or market. The shares of our Common Stock issuable upon exercise of the rights are listed
on Nasdaq under the symbol “PLCE”.
LEGAL
MATTERS
The
validity of the subscription rights and our Common Stock issuable upon exercise of the subscription
rights offered by this prospectus has been passed upon for us by Young Conaway Stargatt &
Taylor, LLP.
EXPERTS
The
consolidated financial statements of The Children’s Place, Inc. appearing in The Children’s Place Inc.’s Annual
Report (Form 10-K) for the fiscal year ended February 3, 2024, and the effectiveness of The Children’s Place
Inc.’s internal control over financial reporting as of February 3, 2024, have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We file annual, quarterly
and current reports, proxy statements and other documents and information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available
on our website at www.thechildrensplace.com. Our website is not a part of this prospectus and is not incorporated by reference
in this prospectus.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC’s rules allow
us to “incorporate by reference” information into this prospectus, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be
part of this prospectus. Any statement contained in this prospectus or a previously filed document incorporated by reference will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies
or replaces that statement.
The following documents previously
filed with the SEC are incorporated by reference into this Prospectus, except for any document or portion thereof deemed to be “furnished”
and not filed in accordance with SEC rules:
| · | Quarterly
Reports on Form 10-Q for the fiscal
quarter ended May 4, 2024, filed with the SEC on June 13, 2024, for
the fiscal
quarter ended August 3, 2024, filed with the SEC on September 11, 2024, and
for the fiscal
quarter ended November 2, 2024, filed with the SEC on December 6, 2024; |
| · | Current
Reports on Form 8-K filed on January 17,
2024; February 9,
2024 (excluding information under Item 2.02);
February 15,
2024; February 16,
2024; March 4,
2024 (excluding information under Item 7.01);
March 14,
2024 (excluding information under Item 7.01);
April 18,
2024 (excluding information under Item 7.01);
May 21,
2024 (excluding information under Item 7.01);
May 22,
2024; June 13,
2024; July 2,
2024; August 16,
2024; August 23,
2024; October 3,
2024; December 3,
2024; and December 12,
2024; and on Form 8-K/A filed on February 21,
2024. |
In addition to the filings
listed above, any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of the initial filing of the registration statement of which this prospectus forms a part and prior to effectiveness of such
registration statement are deemed to be incorporated by reference into this prospectus; however, we will not incorporate by reference
any document or portions thereof that are not deemed “filed” with the SEC, or any information furnished pursuant to Items
2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Current Reports on Form 8-K.
We will provide, without
charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon such person’s written
or oral request, a copy of any and all of the information incorporated by reference in this prospectus. You may request a free copy of
any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address:
The Children’s Place, Inc.
Attn: Chief Administrative Officer, General Counsel
and Corporate Secretary
500 Plaza Drive, Secaucus
New Jersey 07094
Telephone: (201) 558-2400
Exhibits to the filings will
not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus
supplement.
The Children’s Place, Inc.
Non-Transferable
Subscription Rights to Purchase Up to $90,000,000 in
Shares of Common Stock, representing 9,230,769 Shares of Common Stock in the Aggregate
PRELIMINARY PROSPECTUS
[ · ],
2024
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| ITEM
13 | OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION. |
The following table sets
forth the costs and expenses to be paid by us in connection with the offering of securities described in this registration statement.
All amounts are estimates except for the SEC registration fee. We will bear all expenses shown below.
| SEC registration fee | |
$ | 13,779.00 | |
| Subscription Agent fees and expenses | |
$ | 30,000 | |
| Information Agent fees and expenses | |
$ | 20,000 | |
| Financial Advisor fees and expenses | |
$ | 200,000 | |
| Printing and postage expenses | |
$ | 35,000 | |
| Legal fees and expenses | |
$ | 1,000,000 | |
| Accounting fees and expenses | |
$ | 150,000 | |
| Miscellaneous fees and expenses | |
$ | 10,000 | |
| Total | |
$ | 1,458,779 | |
| ITEM
14 | INDEMNIFICATION
OF DIRECTORS AND OFFICERS. |
Section 145 of the DGCL
permits the Company, in certain circumstances, to indemnify any present or former director, officer, employee or agent of the Company
against judgments, penalties, fines, settlements and reasonable expenses incurred in connection with a proceeding in which any such person
was, is or is threatened to be, made a party by reason of holding such office or position. Article Ten of our Certificate of Incorporation
and Article VI of our Bylaws provide for indemnification of our directors, officers, employees and agents to the to the fullest
extent authorized by the DGCL. Our Certificate of Incorporation provides that, subject to Delaware law, no director of the Company shall
be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duties as a director. This provision
does not eliminate our directors’ fiduciary duty and, in appropriate circumstances, equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law.
The Company maintains standard
policies of insurance under which coverage is provided (a) to its directors and officers against loss rising from claims made by
reason of breach of duty or other wrongful act and (b) to the registrant with respect to payments which may be made by the Company
to such officers and directors pursuant to the above indemnification provision or otherwise as a matter of law.
In addition, we have entered
into indemnification agreements with each of the members of our Board Directors and named executive officers (and intend to enter into
similar indemnification agreements with any future members of our Board of Directors and named executive officers). These agreements
require, among other things, that we indemnify each of our Directors and named executive officers to the fullest extent permitted by
Delaware law, including indemnification of expenses such as attorneys’ fees, court costs, judgments, fines and settlement amounts
reasonably incurred by the Director or named executive officer in any action or proceeding, including any action or proceeding by or
in right of us, arising out of the person’s services as a Director or named executive officer. We are also expressly authorized
to carry directors’ and officers’ insurance to protect us, our directors, officers and certain employees against certain
liabilities.
Reference is made to Item
17 for our undertakings with respect to indemnification for liabilities arising under the Securities Act.
| ITEM
15. | RECENT
SALES OF UNREGISTERED SECURITIES. |
In November 2021,
our Board of Directors authorized a $250.0 million share repurchase program (the “Share Repurchase Program”). Under
this program, we may repurchase shares on the open market at current market prices at the time of purchase or in privately negotiated
transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price,
corporate and regulatory requirements, and other market and business conditions. We may suspend or discontinue the program at any time
and may thereafter reinstitute purchases, all without prior announcement. Pursuant to the Credit Agreement as amended by the Seventh
Amendment, we are not expecting to repurchase any shares in Fiscal 2024, except as described below, pursuant to our practice as a result
of our insider trading policy. As of November 2, 2024, there was $156.7 million remaining
availability under the Share Repurchase Program.
Pursuant to our practice,
including due to restrictions imposed by our insider trading policy during black-out periods, we withhold and repurchase shares of vesting
stock awards and make payments to taxing authorities as required by law to satisfy the withholding tax requirements of all equity award
recipients. Our payment of the withholding taxes in exchange for the surrendered shares constitutes a repurchase of our Common Stock.
We also acquire shares of our Common Stock in conjunction with liabilities owed under our deferred compensation plan, which are held
in treasury.
| ITEM
16 | EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES. |
| Exhibit Number |
|
Description |
| 3.1 |
|
Amended
and Restated Certificate of Incorporation of the Company dated May 31, 2016 filed as Exhibit 3.1 to the registrant’s
Current Report on Form 8-K filed on June 7, 2016. |
| 3.2 |
|
Eighth
Amended and Restated Bylaws of The Children’s Place, Inc. filed as Exhibit 3.2 to the registrant’s Current
Report on Form 8-K filed on December 12, 2024. |
| 3.3 |
|
Clawback
Policy of The Children’s Place, Inc. filed as Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q
for the period ended May 4, 2024. |
| 3.4 |
|
Insider
Trading Policy of The Children’s Place, Inc. filed as Exhibit 3.2 to the registrant’s Quarterly Report on Form 10-Q
for the period ended May 4, 2024. |
| 4.1 |
|
Form of
Certificate for Common Stock of the Company filed as an exhibit to the registrant’s Registration Statement No. 333-31535
on Form S-1. |
| 4.2 |
|
Amended
Form of Certificate for Common Stock of the Company filed as Exhibit 4.2 to the registrant’s Annual Report on Form 10-K
for the period ended January 28, 2017. |
| 4.3* |
|
Form of
Non-Transferable Subscription Rights Certificate. |
| 5.1* |
|
Opinion
of Young Conaway Stargatt & Taylor, LLP. |
| 10.1 |
|
Lease
Agreement as of August 12, 2003 between Orlando Corporation and The Children’s Place (Canada), LP, together with Indemnity
Agreement as of August 12, 2003 between the Company and Orlando Corporation, together with Surrender of Lease as of August 12,
2003 between the Company and Orlando Corporation and Orion Properties Ltd. (Canadian Distribution Center) filed as Exhibit 10.2
to the registrant’s Quarterly Report on Form 10-Q for the period ended November 1, 2003. |
| 10.2 |
|
Form of
Indemnity Agreement between the Company and certain members of management and the Board of Directors filed as Exhibit 10.7 to
registrant’s Quarterly Report on Form 10-Q for the period ended August 2, 2008. |
| 10.3 |
|
Lease
Agreement between The Children’s Place Services Company, LLC and 500 Plaza Drive Corp. effective as of March 12, 2009
(500 Plaza Drive), Secaucus, New Jersey filed as Exhibit 10.67 to the registrant’s Annual Report on Form 10-K for
the period ended January 31, 2009. |
| 10.4 |
|
Guaranty
between the Company and 500 Plaza Drive Corp. effective as of March 12, 2009 filed as Exhibit 10.68 to the registrant’s
Annual Report on Form 10-K for the period ended January 31, 2009. |
| 10.5 |
|
The
First Lease Modification Agreement, dated as of August 27, 2009, between The Children’s Place Services Company, LLC and
500 Plaza Drive Corp. filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the period ended
August 1, 2009. |
| 10.6 |
|
Sixth
Modification Agreement, dated as of January 23, 2024, by and between Hancock S-REIT SECA LLC and The Children’s Place
Services Company, LLC filed as Exhibit 10.6 to the registrant’s Annual Report on Form 10-K for the period ended February 3,
2024. |
| 10.7 |
|
The
Company Nonqualified Deferred Compensation Plan effective January 1, 2010 filed as Exhibit 10.82 to the registrant’s
Annual Report on Form 10-K for the period ended January 30, 2010. |
| 10.8 |
|
Amended
and Restated Employment Agreement, dated as of March 28, 2011, by and between the Company and Jane T. Elfers filed as Exhibit 10.1
to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2011. |
| 10.9 |
|
Amendment
No. 1 as of March 23, 2012 to Amended and Restated Employment Agreement dated as of March 28, 2011, by and between
the Company and Jane T. Elfers filed as Exhibit 10.31 to the Registrant’s Annual Report on Form 10-K for the period
ended January 28, 2012. |
| 10.10 |
|
Separation
and Release Agreement dated May 20, 2024, between Jane T. Elfers and The Children’s Place, Inc. filed as Exhibit 10.1
to the registrant’s Quarterly Report on Form 10-Q for the period ended May 4, 2024. |
| 10.11 |
|
Form of
Amended and Restated Change in Control Agreement filed as Exhibit 10.41 to the registrant’s Annual Report on Form 10-K
for the period ended January 29, 2011. |
| 10.12 |
|
Agreement
dated May 22, 2015, by and among The Children’s Place, Inc., Macellum SPV II, LP, Barington Companies Equity Partners,
L.P., Jonathan Duskin, James A. Mitarotonda, certain of their affiliates listed on Schedule A to the Agreement, and Robert L. Mettler
filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on May 29, 2015. |
| 10.13 |
|
The
Company Profit Sharing/401(k) Plan Adoption Agreement No.#001 for use with Fidelity Basic Plan Document No. 17 entered
into by the Company and Fidelity Management Trust Company on September 11, 2015 as filed as Exhibit 10.28 to the registrant’s
Annual Report on Form 10-K for the period ended January 30, 2016. |
| 10.14 |
|
The
Children’s Place, Inc. Fourth Amended and Restated 2011 Equity Incentive Plan filed as Annex B to the registrant’s
Definitive Proxy Statement on Schedule 14A filed on April 2, 2021. |
| 10.15 |
|
Form of
Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above)
filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 4, 2019. |
| 10.16 |
|
Form of
Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (below Senior Vice President) filed
as Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 4, 2019. |
| 10.17 |
|
Letter
Agreement dated February 13, 2019 between The Children’s Place Services Company, LLC and Claudia Lima-Guinehut filed as
Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 4, 2019. |
| 10.18 |
|
Amended
and Restated Credit Agreement, dated as of May 9, 2019, by and among the Company and The Children’s Place Services Company,
LLC, as borrowers, The Children’s Place (International), LLC, The Children’s Place Canada Holdings, Inc.,
the childrensplace.com, inc., TCP IH II, LLC, TCP International IP Holdings, LLC and TCP International Product Holdings, LLC, as
guarantors, Wells Fargo Bank, National Association (successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent
and Collateral Agent, L/C Issuer, Swing Line Lender and as a lender and Bank of America, N.A., HSBC Bank USA, N.A. and JPMorgan Chase
Bank, N.A., as lenders, filed as Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the period ended
May 4, 2019. |
| 10.19 |
|
First
Amendment to Amended and Restated Credit Agreement, dated April 24, 2020, by and among the Company and The Children’s
Place Services Company, LLC, as borrowers, The Children’s Place (International), LLC, The Children’s Place Canada Holdings, Inc.,
the childrensplace.com, inc., TCP IH II, LLC, TCP International IP Holdings, LLC and TCP International Product Holdings, LLC, as
guarantors, Wells Fargo Bank, National Association (successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent
and Collateral Agent, L/C Issuer, Swing Line Lender and as a lender and HSBC Bank USA, N.A. and JPMorgan Chase Bank, N.A., as lenders,
filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2020. |
| 10.20 |
|
Joinder
and Second Amendment to Amended and Restated Credit Agreement and Other Loan Documents, dated as of October 5, 2020, among the
Company, the Borrowers identified on Schedule I thereto, TCP Brands, LLC, TCP Investment Canada I Corp., collectively, the New Guarantors,
the Guarantors identified on Schedule II thereto, the Credit Agreement Lenders and Wells Fargo Bank, National Association (successor
by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent and Collateral Agent, L/C Issuer, Swing Line Lender and as
a lender, filed as Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on October 6, 2020. |
| 10.21 |
|
Third
Amendment to Amended and Restated Credit Agreement, dated as of April 23, 2021, by and among the Company, the Borrowers identified
on Schedule I thereto, the Guarantors identified on Schedule II thereto, the Credit Agreement Lenders and Wells Fargo Bank, National
Association (successor by merger to Wells Fargo Retail Finance, LLC), as Administrative Agent, Collateral Agent, L/C Issuer, and
Swing Line Lender filed as Exhibit 10.23 to the registrant’s Annual Report on Form 10-K for the period ended January 29,
2022. |
| 10.22 |
|
Joinder
and Fourth Amendment to Amended and Restated Credit Agreement and Other Loan Documents, dated as of November 15, 2021, among
the Company, the Borrowers identified on Schedule I thereto, TCP Brands, LLC, The Children’s Place International, LLC, collectively
the New Borrowers, the Guarantors identified on Schedule II thereto, the Credit Agreement Lenders and Wells Fargo Bank, National
Association, as Administrative Agent, Collateral Agent, L/C Issuer, Swing Line Lender and Term Agent, filed as Exhibit 10.4
to the registrant’s Quarterly Report on Form 10-Q for the period ended October 30, 2021. |
| 10.23 |
|
Joinder
and Fifth Amendment to the Amended and Restated Credit Agreement and Other Loan Documents, dated as of June 5, 2023, among the
Company, the Borrowers identified on Schedule I thereto, the Guarantors identified on Schedule II thereto, the Credit Agreement Lenders
and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, L/C Issuer, Swing Line Lender and Term Agent
filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended April 29,
2023. |
| 10.24 |
|
Waiver
and Amendment Agreement to the Credit Agreement, dated as of October 24, 2023, among the Company, the Borrowers identified on
Schedule I thereto, the Guarantors identified on Schedule II thereto, the Credit Agreement Lenders and Wells Fargo Bank, National
Association, as Administrative Agent, Collateral Agent, L/C Issuer, Swing Line Lender and Term Agent, filed as Exhibit 10.4
to the registrant’s Quarterly Report on Form 10-Q for the period ended October 28, 2023. |
| 10.25 |
|
Seventh
Amendment to Amended and Restated Credit Agreement, dated April 16, 2024, among the Company, certain subsidiaries of the Company,
the Credit Agreement Lenders and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, L/C Issuer and
Swing Line Lender filed as Exhibit 10.24 to the registrant’s Annual Report on Form 10-K for the period ended February 3,
2024. |
| 10.26 |
|
Promissory
Note, dated February 29, 2024, among the Company, certain subsidiaries of the Company, and Mithaq Capital SPC filed as Exhibit 4.1
to the registrant’s Current Report on Form 8-K filed on March 4, 2024. |
| 10.27 |
|
Unsecured
Promissory Note, dated April 16, 2024, among the Company, certain subsidiaries of the Company, and Mithaq Capital SPC filed
as Exhibit 10.26 to the registrant’s Annual Report on Form 10-K for the period ended February 3, 2024. |
| 10.28 |
|
Commitment
Letter for $40 Million Senior Unsecured Credit Facility (Third), dated as of May 2, 2024, among the Company, certain subsidiaries
of the Company, and Mithaq Capital SPC filed as Exhibit 10.27 to the registrant’s Annual Report on Form 10-K for
the period ended February 3, 2024. |
| 10.29 |
|
Amendment
No. 1 to Commitment Letter for $40 Million Senior Unsecured Credit Facility (Third), dated as of May 2, 2024, among the
Company, certain subsidiaries of the Company, and Mithaq Capital SPC filed as Exhibit 10.5 to the registrant’s Quarterly
Report on Form 10-Q for the period ended August 3, 2024. |
| 10.30 |
|
Asset
Purchase Agreement, dated March 1, 2019, by and among TCP Brands, LLC, as buyer, and Gymboree Group, Inc. and its subsidiaries,
as sellers, filed as Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 4,
2019. |
| 10.31 |
|
Form of
Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above),
filed as Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the period ended May 2, 2020. |
| 10.32 |
|
The
Fifth Lease Modification Agreement, dated as of January 29, 2021, by and between The Children’s Place Services Company,
LLC and Hancock S-REIT SECA LLC filed as Exhibit 10.24 to the registrant’s Annual Report on Form 10-K for the period
ended January 30, 2021. |
| 10.33 |
|
Form of
Performance-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above)
filed as Exhibit 10.25 to the registrant’s Annual Report on Form 10-K for the period ended January 30, 2021. |
| 10.34 |
|
Form of
Time-Based Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan (Senior Vice President & above) filed
as Exhibit 10.29 to the registrant’s Annual Report on Form 10-K for the period ended January 29, 2022. |
| 10.35 |
|
Letter
Agreement dated July 21, 2021 between The Children’s Place Services Company, LLC and Jared Shure filed as Exhibit 10.2
to the registrant’s Quarterly Report on Form 10-Q for the period ended July 31, 2021. |
| 10.36 |
|
Letter
Agreement dated October 16, 2022 between The Children’s Place Services Company, LLC and Sheamus Toal filed as Exhibit 10.2
to the registrant’s Quarterly Report on Form 10-Q for the period ended October 29, 2022. |
| 10.37 |
|
Updated
Letter Agreement dated August 1, 2023 between The Children’s Place Services Company, LLC and Sheamus Toal filed as Exhibit 10.2
to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended July 29, 2023. |
| 10.38 |
|
Updated
Letter Agreement dated August 1, 2023 between The Children’s Place Services Company, LLC and Maegan Markee filed as Exhibit 10.3
to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended July 29, 2023. |
| 10.39 |
|
Letter
Agreement dated May 29, 2024, between Muhammad Umair and The Children’s Place, Inc. filed as Exhibit 10.2 to
the registrant’s Quarterly Report on Form 10-Q for the period ended May 4, 2024. |
| 10.40 |
|
Separation
and Release Agreement dated June 14, 2024, between Maegan Markee and The Children’s Place, Inc. filed as Exhibit 10.3
to the registrant’s Quarterly Report on Form 10-Q for the period ended August 3, 2024. |
| 10.41 |
|
Letter
Agreement dated August 9, 2024, between Claudia Lima-Guinehut and The Children’s Place, Inc. filed as Exhibit 10.4
to the registrant’s Quarterly Report on Form 10-Q for the period ended August 3, 2024. |
| 10.42 |
|
Separation
and Release Agreement dated October 1, 2024, between Sheamus Toal and The Children’s Place, Inc. filed
as Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 2,
2024. |
| 10.43 |
|
Form of
Restricted Stock Unit Award Agreement under the 2011 Equity Incentive Plan filed as Exhibit 10.7 to the registrant’s Quarterly
Report on Form 10-Q for the quarterly period ended November 2, 2024. |
| 21.1 |
|
List
of subsidiaries of the Company filed as Exhibit 21.1 to the registrant’s Annual Report on Form 10-K for the period
ended February 3, 2024. |
| 23.1* |
|
Consent
of Ernst & Young LLP, independent registered public accounting firm |
| 23.2* |
|
Consent
of Young Conaway Stargatt & Taylor, LLP (included in Exhibit 5.1) |
| 24.1** |
|
Powers
of Attorney |
| 99.1* |
|
Form of
Instructions for Use of Non-Transferable Subscription Rights Certificates |
| 99.2* |
|
Form of
Letter to Stockholders Who Are Record Holders |
| 99.3* |
|
Form of
Letter to Brokers and Other Nominees |
| 99.4* |
|
Form of
Letter to Clients of Brokers and Other Nominees |
| 99.5* |
|
Form of
Beneficial Owner Election Form |
| 99.6* |
|
Form of
Nominee Holder Certification |
| 99.7* |
|
Form of
Notice of Guaranteed Delivery |
| 107** |
|
Filing
Fee Table |
* Filed herewith
** Filed previously
(b) Financial statement schedules.
Schedules not listed above
have been omitted because the information required to be set forth therein is not applicable or is shown in the consolidated financial
statements or notes thereto.
(i) The undersigned
registrant hereby undertakes:
(A) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(1) To include
any prospectus required by Section 10(a)(3) of the Securities Act.
(2) To reflect in the
prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate
offering price set forth in the “Calculation of Filing Fee Tables” or “Calculation of Registration Fee” table,
as applicable, in the effective registration statement.
(3) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement.
provided,
however, that paragraphs (i)(A)(1), (2) and (3) above do not apply if the registration statement is on Form S-1
and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished
to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
(B) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(C) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(D) That, for the purpose
of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to the offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part
of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of first use.
(E) That, for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, in
a primary offering of securities pursuant to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(1) any preliminary
prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(2) any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(3) the portion of
any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(4) any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(ii) The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the
registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated
by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(iii) Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Secaucus, New Jersey, on the 19th day of December, 2024.
| |
THE CHILDREN’S PLACE, INC. |
| |
|
|
| |
By: |
/s/
Muhammad Umair |
| |
|
Name: |
Muhammad Umair |
| |
|
Title: |
President & Interim Chief Executive Officer |
Pursuant to the requirements
of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and
on the dates indicated.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Muhammad Umair |
|
Director,
President & Interim Chief Executive Officer (Principal Executive Officer) |
|
December 19,
2024 |
| Muhammad Umair |
|
|
| |
|
|
|
|
| /s/
Laura Lentini |
|
Interim
Chief Financial Officer (Principal Financial and Accounting Officer) |
|
December 19,
2024 |
| Laura Lentini |
|
|
| |
|
|
|
|
| * |
|
Director |
|
December 19,
2024 |
| Turki Saleh A. AlRajhi |
|
|
| |
|
|
|
|
| * |
|
Director |
|
December 19,
2024 |
| Muhammad Asif Seemab |
|
|
| |
|
|
|
|
| * |
|
Director |
|
December 19,
2024 |
| Hussan Arshad |
|
|
| |
|
|
|
|
| * |
|
Director |
|
December 19,
2024 |
| Douglas Edwards |
|
|
| *By: |
/s/
Muhammad Umair |
|
| |
Muhammad Umair, Attorney-in-Fact |
|
Exhibit 4.3
| RIGHTS CERTIFICATE #: NUMBER OF RIGHTS
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S PROSPECTUS
DATED [ ], 2024 (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE.
FOR A MORE COMPLETE DESCRIPTION OF SUCH TERMS AND CONDITIONS, PLEASE REFER TO THE PROSPECTUS.
COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS ARE AVAILABLE UPON REQUEST
FROM D.F. KING & CO., INC., THE INFORMATION AGENT.
THE CHILDREN’S PLACE, INC.
Incorporated under the laws of the State of Delaware
NON - TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE
Evidencing Non - Transferable Subscription Rights to Purchase Shares of Common Stock of The Children’s Place, Inc.
Subscription Price: $9.75 per Share
THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME,
ON JANUARY 24, 2025, UNLESS EXTENDED BY THE COMPANY
REGISTERED
OWNER:
THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the
owner of the number of non-transferable subscription rights (“Rights”) set forth above.
Each whole Right entitles the holder thereof to purchase 0.722 shares of Common
Stock, with a par value of $0.10 per share, of The Children’s Place, Inc., a Delaware
corporation, at a subscription price of $9.75 per share (the “Basic Subscription Right”),
pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the
conditions set forth in the Prospectus and the “Instructions for Use of The Children’s
Place, Inc. Non-Transferable Subscription Rights Certificates” accompanying this Non-Transferable Subscription Rights Certificate. Any Rights holder that exercises its Basic
Subscription Right in full may subscribe for a number of Excess Shares pursuant to the
terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the
“Over-Subscription Privilege”). “Excess Shares” means any shares of Common Stock that are not
purchased by other holders of Rights under their Basic Subscription Rights as of the expiration date
and time of the Rights Offering. The Rights represented by this Non-Transferable Subscription Rights
Certificate may be exercised by completing Form 1 and any other appropriate forms on the reverse
side hereof and by returning the full payment of the subscription price for each share of Common
Stock in accordance with the “Instructions for Use of The Children’s Place, Inc. Non-Transferable
Subscription Rights Certificates” that accompany this Non-Transferable Subscription Rights
Certificate. No fractional shares will be issued.
This Non-Transferable Subscription Rights Certificate is not valid unless countersigned by the subscription agent and registered by the registrar.
Witness the signatures of The Children’s Place, Inc.’s duly authorized officers.
Dated:
______________________________________________ ______________________________________________
President & Interim Chief Executive Officer Chief Administrative Officer, General Counsel and Corporate Secretary
|
| DELIVERY OPTIONS FOR NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE
DELIVERY OTHER THAN IN THE MANNER OR TO THE ADDRESSES LISTED BELOW WILL NOT CONSTITUTE VALID DELIVERY.
If delivering by first class mail:
Equiniti Trust Company, LLC
Attn: Reorganization Department
55 Challenger Road, Suite 200
Ridgefield Park, NJ 07660
If delivering by registered, certified or express mail or
overnight courier:
Equiniti Trust Company, LLC
Operations Center
Attn: Reorganization Department
55 Challenger Road, Suite 200
Ridgefield Park, NJ 07660
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY.
FORM 1 - EXERCISE OF SUBSCRIPTION RIGHTS
To subscribe for shares of Common Stock pursuant to your Basic
Subscription Right, please complete lines (a) and (c) and sign under Form 3
below. To subscribe for shares of Common Stock pursuant to your Over-Subscription Privilege, please also complete line (b) under this Form 1 and
sign under Form 3 below. To the extent you subscribe for more shares of
Common Stock than you are entitled under either the Basic Subscription Right
or the Over-Subscription Privilege, you will be deemed to have elected to
purchase the maximum number of shares for which you are entitled to
subscribe under the Basic Subscription Right or Over-Subscription Privilege,
as applicable.
(a) EXERCISE OF BASIC SUBSCRIPTION RIGHT:
Since each Right only represents the right to purchase a fraction of a share
of Common Stock, to calculate the maximum number of shares of Common
Stock for which you can subscribe using this Rights Certificate, you must
MULTIPLY the number of Rights stated on the face of this Non-Transferrable Subscription Rights Certificate by 0.7220 and ROUND DOWN
to the nearest whole share of Common Stock.
I apply for ______________ shares x $9.75 = $_______________
(no. of new shares) (subscription price) (amount enclosed)
(b) EXERCISE OF OVER-SUBSCRIPTION RIGHT
If you have exercised your Basic Subscription Right in full and wish
to subscribe for additional shares of Common Stock pursuant to your Over-Subscription Privilege:
I apply for ______________ shares x $9.75 = $_______________
(no. of new shares) (subscription price) (amount enclosed)
(c) Total Amount of Payment Enclosed = $__________________
METHOD OF PAYMENT (CHECK ONE)
Personal check or bank draft payable to “Equiniti Trust Company, LLC
(acting as Subscription Agent for The Children’s Place, Inc.)”.
Wire transfer of immediately available funds directly to the account
maintained by Equiniti Trust Company, LLC, as Subscription Agent, for
purposes of accepting subscriptions in this Rights Offering at JPMorgan
Chase Bank, 55 Water Street, New York, New York 10005, ABA
#021000021 or Swift Code: CHASUS33, Account # 530-354616 Equiniti
Trust Company, LLC FBO The Children’s Place, Inc., with reference to
the rights holder's name.
Delivery of indebtedness for borrowed money (principal and/or accrued
and unpaid interest) owed by The Children’s Place, Inc. (the
“Company”) to you (you may only use this method of payment after
contacting the Company as described the Prospectus and the
“Instructions for Use of The Children’s Place, Inc. Non-Transferable
Subscription Rights Certificates”, and further subject to the Company’s
determination, in its sole and absolute discretion, of validity and
eligibility of such indebtedness and the Company’s confirmation, in its
sole and absolute discretion, of any additional documentation that you
will be required to deliver).
FORM 2 - DELIVERY TO DIFFERENT ADDRESS
If you wish for the Common Stock underlying your subscription rights or a
certificate representing unexercised subscription rights to be delivered to an
address different from that shown on the face of this Non-Transferable
Subscription Rights Certificate, please enter the alternate address below, sign
under Form 4 and have your signature guaranteed under Form 4.
________________________________________________________________
________________________________________________________________
________________________________________________________________
FORM 3 - SIGNATURE
TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this Rights
Offering and I hereby irrevocably subscribe for the number of shares indicated as
the total of Form 1(a) and Form 1(b) above on the terms and conditions specified in
the Prospectus, which is incorporated by reference herein. I hereby agree that if I
fail to pay in full for the shares for which I have subscribed, the Company may
exercise any of the remedies provided for in the Prospectus.
Signature(s): ______________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed
on the reverse of this Non-Transferable Subscription Rights Certificate in every
particular, without alteration or enlargement, or any other change whatsoever.
In the case of joint registered holders, each person must sign this Form in
accordance with the foregoing. If you sign this Form in your capacity as a
trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other fiduciary or representative, you must indicate the capacity in
which you are signing when you sign and, if requested by the Subscription
Agent in its sole discretion, you must present to the Subscription Agent
satisfactory evidence of your authority to sign in that capacity.
FORM 4 - SIGNATURE GUARANTEE
This form must be completed if you have completed any portion of Forms 2 or 3.
Signature Guaranteed: _______________________________________________
(Name of Bank or Firm)
By: _______________________________________________________________
(Signature of Officer)
IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor
institution (bank, stock broker, savings & loan association or credit union) with
membership in an approved signature guarantee medallion program pursuant
to Securities and Exchange Commission Rule 17Ad-15.
FOR INSTRUCTIONS ON THE USE OF THE CHILDREN’S PLACE, INC. NON-TRANSFERABLE SUBSCRIPTION RIGHTS
CERTIFICATES OR TO REQUEST ADDITIONAL COPIES OF THE PROSPECTUS OR OTHER RELEVANT DOCUMENTS,
PLEASE CONTACT D.F. KING & CO., INC., THE INFORMATION AGENT, TOLL-FREE AT (888) 567-1626. |
Exhibit 5.1
 |
WILMINGTON
RODNEY SQUARE
|
December 19, 2024
|
The Children’s Place, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094 |
|
Ladies and Gentlemen:
We have acted as special Delaware
counsel to The Children’s Place, Inc., a Delaware corporation (the “Company”), in connection with the Registration
Statement on Form S-1 (including all exhibits thereto, the “Registration Statement”), filed by the Company on the date
hereof with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the
“Act”), relating to the Company’s proposed pro rata distribution to its stockholders of non-transferable subscription
rights (the “Rights”) to purchase up to an aggregate of 9,230,769 shares (the “Shares”) of common stock, par value
$0.10 per share (the “Common Stock”), of the Company (the “Rights Offering”). The Registration Statement includes
a related prospectus (the “Prospectus”) filed with the Registration Statement in connection with the Rights Offering.
At your request, this opinion
letter is being furnished to you for filing as Exhibit 5.1 to the Registration Statement. No opinion is expressed herein as to any
matter pertaining to the contents of the Registration Statement or the prospectus forming a part thereof, other than as expressly stated
herein with respect to the issuance of the Rights and the Shares.
For the purpose of rendering
our opinion as stated herein, we have conducted no independent factual investigation of our own, and have examined only the following
documents:
| (i) | the Amended and Restated Certificate of Incorporation of the Company; |
| (ii) | the Eighth Amended and Restated Bylaws of the Company, which constitute the bylaws of the Company currently
in effect; |
| (iii) | the Registration Statement; |
| (iv) | the resolutions of the Board of Directors of the Company (the “Board”) reflecting meetings
of the Board held on or about February 28, 2024; September 23, 2024; December 3, 2024 and December 16, 2024, relating
to the Rights Offering, the Registration Statement, the proposed issuance of the Rights and the Shares, and other matters related thereto; |
Young Conaway Stargatt & Taylor, LLP
Rodney Square | 1000 North King Street | Wilmington,
DE 19801
P 302.571.6600 F 302.571.1253
YoungConaway.com
Young Conaway Stargatt & Taylor, LLP
December 19, 2024
Page 2
| (v) | a certificate of an officer of the Company, dated December 18, 2024 (the “Officer’s Certificate”);
and |
| (vi) | a Certificate of Good Standing with respect to the Company, dated December 16, 2024, obtained from
the Secretary of State of the State of Delaware. |
For purposes of this opinion
letter, we have not reviewed any documents, agreements or records other than the documents, agreements or records listed in (i) through
(vi) above.
In particular, we have not reviewed,
and express no opinion on, any document, agreement or record (other than the documents, agreements or records listed in (i) through
(vi) above) that is referred to or incorporated by reference into, the documents, agreements or records reviewed by us (unless otherwise
listed in (i) through (vi) above). We have assumed that there exists no provision in any document, agreement or record that
we have not reviewed that bears upon or is inconsistent with or would otherwise alter the opinion stated herein.
As to certain factual matters,
we have relied upon the Officer’s Certificate and have not sought to independently verify such matters.
Based solely upon our examination
of and reliance upon the foregoing, and subject to the limitations, exceptions, qualifications, and assumptions set forth herein, we are
of the opinion that (i) when the Registration Statement becomes effective under the Act and (ii) upon issuance, delivery and
payment therefor in the manner contemplated by the Registration Statement and the Prospectus and in accordance with the Board and Committee
Resolutions: (A) the Rights will be valid and binding obligations of the Company and (B) the Shares will be validly issued,
fully paid and nonassessable.
The opinion expressed herein
is subject in all respects to the following assumptions, limitations, and qualifications:
(i) Our opinion expressed
herein is limited to the General Corporation Law of the State of Delaware (the “DGCL”) in effect on the date hereof. We have
not considered and express no opinion with regard to, or as to the significance or effect in any respect of, laws, rules or regulations
of any other jurisdiction (whether foreign or domestic), including, without limitation, the laws of any other state of the United States,
federal laws of the United States (including, without limitation, federal laws and rules and regulations relating to securities),
the securities laws of any state of the United States, blue sky laws, antitrust laws, insurance laws, tax laws, and regulations of stock
exchanges or of any other regulatory body.
(ii) We have assumed, without
any investigation, (a) the legal capacity of natural persons who are signatories to the documents examined by us, (b) that each
of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under,
such documents, (c) the genuineness of all signatures on all documents examined by us, (d) the authenticity of all documents
submitted to us as originals, (e) the accuracy and completeness of all documents examined by us, (f) the conformity to authentic
originals of all documents submitted to us as certified, conformed, photostatic, or other copies, and (g) that the documents, in
the forms submitted to us for review, have not been and will not be altered, modified, or amended in any respect, and have not otherwise
been revoked since the time of their adoption and remain in full force and effect.
Young Conaway Stargatt & Taylor, LLP
December 19, 2024
Page 3
(iii) We assume that, at
the time of the issuance of the Shares, there will be a sufficient number of unissued shares of Common Stock, which shares had not been
previously subscribed for, reserved, or otherwise committed to be issued, available to satisfy the obligation of the Company to issue
the Shares.
(iv) We have assumed that
each of the statements made and certified in the Officer’s Certificate was true and correct when made, has at no time since being
made and certified become untrue or incorrect, remains true and correct on the date hereof, and will be true and correct on the date the
Company is or becomes obligated to issue the Shares.
(v) We have assumed that
the Company will comply with all applicable notice requirements regarding uncertificated shares as provided in the DGCL.
(vi) The opinion set forth
herein is subject to and may be limited by (a) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, fraudulent transfer
and similar laws relating to or affecting creditors rights generally including, without limitation, the Delaware Uniform Fraudulent Transfer
Act, the provisions of the United States Bankruptcy Code and the Delaware insolvency statutes, (b) principles of equity including,
without limitation, concepts of materiality, good faith, fair dealing, conscionability and reasonableness and the possible unavailability
of specific performance or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at
law), (c) applicable law relating to fiduciary duties, (d) public policy limitations with respect to exculpation, contribution,
indemnity and advancement provisions, (e) the qualification that enforceability may be limited by a refusal to recognize a purported
waiver of any statutory right other than, as a matter of state law in the state courts of the State of Delaware, the right to a trial
by jury, (f) generally applicable rules of law that forum selection clauses in contracts are not necessarily binding on the
courts in the forum selected, (g) general rules of law that may render an entire agreement unenforceable if any unenforceable
provision thereof is essential to the agreed upon exchange, (h) the qualification that a provision permitting modification of an
agreement or waiver of rights or remedies under an agreement only in writing may not be enforceable and (i) the qualification that
provisions requiring the payment of attorneys’ fees may be limited.
(vii) We express no opinion
as to the Uniform Commercial Code (including the Delaware Uniform Commercial Code, 6 Del. C. § 1-101 et seq., in effect on the date
hereof) or as to whether any filings may be required thereunder in connection with any of the documents examined by us.
(viii) The opinion expressed
in this letter is rendered as of the date hereof and is based on our understandings and assumptions as to present facts, and on the application
of the DGCL as the same exists on the date hereof. We assume no obligation to update or supplement this opinion letter after the date
hereof with respect to any facts or circumstances that may hereafter come to our attention or to reflect any changes in the facts or law
that may hereafter occur or take effect.
Young Conaway Stargatt & Taylor, LLP
December 19, 2024
Page 4
We hereby consent to your filing
of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our Firm in the Prospectus under the
heading “Legal Matters”. This opinion is rendered solely for your benefit in connection with the filing of the Registration
Statement and, except as provided in the preceding sentence, may not, without our prior written consent, be furnished or quoted to any
other person or entity. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act and the rules and regulations of the Commission thereunder.
| | Sincerely, |
| | |
| | /s/ Young Conaway Stargatt & Taylor, LLP |
Exhibit 23.1
Consent of Independent Registered Public Accounting
Firm
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-1) and related Prospectus of The Children’s Place, Inc. and to the incorporation by reference
therein of our reports dated May 3, 2024, with respect to the consolidated financial statements of The Children’s Place, Inc., and
the effectiveness of internal control over financial reporting of The Children’s Place, Inc., included in its Annual Report (Form
10-K) for the year ended February 3, 2024, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, NY
December 19, 2024
Exhibit 99.1
THE
TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●],
2024 (“PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS
ARE AVAILABLE ON REQUEST FROM D.F. KING & Co., Inc. BY CALLING TOLL-FREE
AT (888) 567-1626.
FORM OF INSTRUCTIONS FOR USE OF
THE
CHILDREN’S PLACE, INC.
NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATES
CONSULT THE INFORMATION AGENT, YOUR BANK OR BROKER
AS TO ANY QUESTIONS
The
following instructions relate to a rights offering (the “rights offering”) by The Children’s Place, Inc.,
a Delaware corporation (the “Company”), to the holders of record (the “record holders”) of its
common stock, par value $0.10 per share (the “common stock”), as described in the Company’s registration statement
on Form S-1 initially filed with the United States Securities and Exchange Commission on October 15, 2024, as amended (Registration
No. 333-282664) and the Prospectus. Each stockholder is receiving one non-transferable subscription right (a “subscription
right”) for each full share of the Company’s common stock owned by that stockholder as of the close of business on December 13,
2024 (the “Record Date”). An aggregate of up to 9,230,769 shares of common stock are being offered by the Prospectus.
The subscription rights may
be exercised at any time during the rights offering subscription period, which will commence on December 24, 2024, and will expire
at 5:00 p.m., New York City time, on January 24, 2025 (the “expiration date and time”). The subscription rights
that are not validly exercised by the expiration date and time will expire and will have no value. The Company will not be obligated
to honor your exercise of subscription rights if (i) Equiniti Trust Company, LLC (the “subscription agent”) receives
the documents relating to your exercise after the expiration date and time, regardless of when you transmitted the documents, or (ii) your
payment of the subscription price (whether in cash, by delivery of indebtedness for borrowed money owed to you by the Company or a combination
of cash and such indebtedness) is not timely received.
If the Company extends the
subscription period of the rights offering in connection with any post-effective amendment, the Company will allow rights holders a reasonable
period of additional time to make new investment decisions on the basis of the new information set forth in the amended Prospectus that
will form a part of the post-effective amendment. In such event, the Company will issue a press release announcing the changes to the
rights offering and the new rights offering expiration date.
The subscription rights are
evidenced by non-transferable subscription rights certificates (the “subscription rights certificates”). Each subscription
right allows the holder thereof to subscribe for shares of common stock (the “basic subscription right”) at the subscription
price of $9.75 per whole share of common stock (the “subscription price”). As an example, if you owned 1,000 shares
of common stock as of the Record Date, you would receive 1,000 subscription rights and would have the right to purchase up to 722 shares
of common stock at a subscription price of $9.75 per whole share with your basic subscription right.
No minimum subscription is required for consummation of the rights
offering. No fractional shares of common stock will be issued upon the exercise of subscription rights in the Rights Offering. Any fractional
shares of common stock created by the exercise of subscription rights will be rounded down to the nearest whole share.
Additionally, rights holders
who fully exercise their basic subscription rights will be entitled to subscribe for additional shares of common stock that remain unsubscribed
as a result of any unexercised basic subscription rights (the “over-subscription privilege”). The over-subscription
privilege allows a rights holder to subscribe for additional shares of common stock at the subscription price. If there are an insufficient
number of shares of common stock available to fully satisfy the over-subscription requests of rights holders, those rights holders who
exercised their over-subscription privilege will receive the available shares of common stock pro rata based on the number of
shares of common stock each rights holder subscribed for under the basic subscription right. “Pro rata” means in proportion
to the number of shares of common stock that you and the other rights holders have purchased by fully exercising basic rights on your
common stock holdings.
You may exercise your over-subscription
privilege only if you exercise your basic subscription rights in full. To determine if you have fully exercised your basic subscription
rights, the Company will consider only the basic subscription rights held by you in the same capacity. If there are not enough shares
of common stock to satisfy all subscriptions made under the over-subscription privilege, the Company will allocate the remaining shares
of common stock pro rata, after eliminating all fractional shares, among those over-subscribing rights holders. See “The
Rights Offering - Subscription Rights” in the Prospectus.
The number of subscription
rights to which you are entitled is printed on the face of your subscription rights certificate. You should indicate your wishes with
regard to the exercise of your subscription rights by completing the appropriate portions of your subscription rights certificate and
returning the certificate to the subscription agent pursuant to the procedures described in the Prospectus.
your
properly completed and duly executed rights Certificate (subject to the procedure for guaranteed delivery thereof), aND payment in full
of the aggregate subscription price, including final clearance of any checks (and, to the extent you are paying some or all of the subscription
price by delivery of indebtedness for borrowed money owed by the Company to you, the original evidence of such indebtedness, together
with any supplemental documentation requested by the Company), must be received by the subscription agent in the manner specified in
the Prospectus at or prior to the expiration date and time.
Once
you have exercised your subscription rights or have instructed your nominee of your subscription request, you may not revoke or change
your exercise or request a return of the subscription price payment. Rights not exercised prior to the expiration date and time will
expire and will have no value.
| 1. | Method of Subscription –
Exercise of Subscription Rights |
A participating rights holder must send the subscription
rights certificate together with payment for the shares of common stock subscribed for in the rights offering to the subscription agent
based on the subscription price of $9.75 per share of common stock.
Payments of Subscription
Price in Cash
All cash payments by a participating rights holder
must be made in U.S. dollars (i) by personal check payable to “Equiniti Trust Company, LLC (acting as subscription agent for
The Children’s Place, Inc.)” or (ii) by wire transfer to Equiniti Trust Company, LLC with reference to the rights
holder’s name.
Except as described under “The Rights
Offering – Guaranteed Delivery Procedures” in the Prospectus, the cash payment, together with a properly completed
and executed subscription rights certificate and any other supplemental documentation requested, must be received by the subscription
agent at the subscription agent’s address set forth below, at or prior to the expiration date and time.
Payments of Subscription
Price by Delivery of Indebtedness for Borrowed Money
If
you would like to pay some or all of the subscription price for your shares of common stock by delivery, in lieu of cash, of an
equivalent amount of indebtedness for borrowed money owed to you by the Company, you must contact the Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention:
Jared E. Shure, Chief Administrative Officer, General Counsel & Secretary
Telephone:
(201) 453-7049
as
soon as practicable after the date of the Prospectus (and in any event prior to exercising your subscription rights and delivering any
indebtedness for borrowed money in payment therefor) so that the Company can in its sole and absolute discretion, (i) determine
whether it considers such indebtedness for borrowed money to be valid and eligible for delivery in payment of some or all of the subscription
price and (ii) confirm the documentation that you will be required to deliver to the subscription agent in order to validly deliver
such indebtedness for borrowed money as payment for some or all of the subscription price. As it may take some time for the Company
to evaluate and respond to requests to deliver indebtedness for borrowed money in full or partial payment of the subscription price and
for you, thereafter, to complete and provide the necessary documentation to the subscription agent, the Company strongly recommends that
you start this process as soon as possible and not wait until the final days of the subscription period. Your delay in commencing this
process may result in your being unable to timely deliver your indebtedness for borrowed money as full or partial payment of the subscription
price, which in turn would result in your purported exercise of subscription rights to be paid for with such indebtedness for borrowed
money being rejected.
Subject
to the Company’s determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to
be valid and eligible for delivery in payment of some or all of the subscription price, in order to be accepted, the original
evidence of such indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed to you by the Company in the amount
equivalent to the amount of the subscription price, together with a properly completed and executed subscription rights certificate and
any other supplemental documentation requested, must be received by the subscription agent at the subscription agent’s address
set forth below at or prior to the expiration date and time.
The subscription rights certificate and payment
of the subscription price must be delivered to the subscription agent by one of the methods described below, in each case, such that
it is received prior to the expiration date and time:
By
First Class Mail:
Equiniti Trust Company,
LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey
07660
Attn: Reorganization Department
By
Registered, Certified or Express Mail or Overnight Courier:
Equiniti Trust Company,
LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey
07660
Attn: Reorganization Department
Telephone
Number for Confirmation:
(877) 248-6417 or (718)
921-8317
Delivery to any address or by a method other
than those set forth above will not constitute valid delivery.
| 2. | Banks, Brokers, and Other Nominee
Holders. |
When making arrangements with your bank or broker
for the delivery of funds on your behalf, you may also request such bank or broker to exercise the subscription rights certificate on
your behalf.
Banks, brokers, and other nominee holders of subscription rights who
exercise the basic subscription right and the over-subscription privilege on behalf of beneficial owners of subscription rights will be
required to certify to the subscription agent and the Company, in connection with the exercise of the over-subscription privilege, as
to the aggregate number of subscription rights that have been exercised and the number of shares of common stock that are being subscribed
for pursuant to the over-subscription privilege, by each beneficial owner of subscription rights (including such nominee itself) on whose
behalf such nominee holder is acting. If there are an insufficient number of shares of common stock available to fully satisfy the over-subscription
requests of rights holders, those rights holders who exercised their over-subscription privilege will receive the available shares of
common stock pro rata based on the number of shares of common stock each rights holder subscribed for under the basic subscription
right. “Pro rata” means in proportion to the number of shares of common stock that you and the other rights holders
have purchased by fully exercising basic subscription rights on your common stock holdings.
| 3. | Insufficient and Excess Payments |
If you send a payment that is insufficient to
purchase the number of shares of common stock you requested, or if the number of shares of common stock you requested is not specified
in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount
of the payment received, subject to the availability of shares of common stock under the over-subscription privilege (to the extent you
have exercised and paid for your basic subscription rights in full and have also exercised your over-subscription privilege) and the
elimination of fractional shares of common stock.
Any excess subscription payments received by
the subscription agent will be returned in the manner and form in which such payments were made, without interest or penalty, as soon
as practicable following the expiration of the rights offering and after all prorating calculations and reductions contemplated by the
terms of the rights offering have been effected.
| 4. | Issuance of Common Stock |
We will deliver to the record holders who purchase
shares of common stock in the rights offering DRS statements representing the shares of common stock purchased in the rights offering
as soon as practicable after the expiration date and time, or such later date as to which the rights offering may be extended, and after
all pro rata allocations and adjustments have been completed.
As soon as practicable after the expiration date
and time, or such later date as to which the rights offering may be extended, and the valid exercise of subscription rights pursuant
to the basic subscription right and over-subscription privilege, and after all pro rata allocations and adjustments have been
completed, the following deliveries and payments will be made to the address shown on the face of your subscription rights certificate,
or, if your shares of common stock are held by a broker, dealer, custodian bank, or other nominee, such deliveries and payments will be
in the form of a credit to your account, unless you provide instructions to the contrary in your subscription rights certificate:
Basic
Subscription Right: The subscription agent will deliver to each exercising rights holder DRS statements representing the number
of shares of common stock purchased pursuant to the basic subscription right. See “The Rights Offering – Basic Subscription
Rights and Over-Subscription Privilege – Basic Subscription Right” in the Prospectus.
Over-Subscription
Privilege: The subscription agent will deliver to each rights holder who validly exercises the over-subscription privilege
DRS statements representing the number of shares of common stock, if any, purchased with the over-subscription privilege. See “The
Rights Offering – Basic Subscription Rights and Over-Subscription Privilege – Over-Subscription Privilege” in the
Prospectus.
Return
of Excess Payment: If you exercised your over-subscription privilege and are allocated less than all of the shares of common
stock for which you wished to subscribe, your excess payment for shares of common stock that were not allocated to you will be returned
to you in the manner and form in which such payment was made, without interest or penalty, as soon as practicable after the expiration
date and time and after all prorating calculations and reductions contemplated by the terms of the rights offering have been effected.
The subscription agent will deliver to the record holders who purchase shares of common stock in the rights offering DRS statements representing
the shares of common stock that you purchased as soon as practicable after the expiration date and time and after all pro rata
allocations and adjustments have been completed. See “The Rights Offering – Subscription Rights – Return of Excess
Payment” in the Prospectus.
The
subscription rights are non-transferable, except that the subscription rights will be transferable
by operation of law. The subscription rights will not be listed for trading on any securities exchange or trading system.
The Company will pay all customary fees and expenses
of the subscription agent and the information agent related to the rights offering. The Company has also agreed to indemnify the subscription
agent and the information agent with respect to certain liabilities that they may incur in connection with the rights offering.
| a. | Execution by Registered Holder.
The signature on the subscription rights certificate must correspond to the name of the registered
holder exactly as it appears on the face of the subscription rights certificate without any
alteration, enlargement or change. Persons who sign the subscription rights certificate in
a representative or other fiduciary capacity on behalf of a registered holder must indicate
their capacity when signing and, unless waived by the subscription agent in its sole and
absolute discretion, must present to the subscription agent satisfactory evidence of their
authority so to act. |
| b. | Execution by Person Other than Registered
Holder. If the subscription rights certificate is executed by a person other than the
holder named on the face of the subscription rights certificate, proper evidence of authority
of the person executing the subscription rights certificate must accompany the same unless,
for good cause, the subscription agent dispenses with proof of authority. |
| c. | Signature Guarantees. If you are
neither a registered holder (or signing in a representative or other fiduciary capacity on
behalf of a registered holder) nor an eligible institution, such as a member firm of a registered
national securities exchange or a member of the Financial Industry Regulatory Authority, Inc.,
or a commercial bank or trust company having an office or correspondent in the United States,
your signature must be guaranteed by such an eligible institution. |
| 8. | Method of Delivery to Subscription
Agent. |
The method of delivery of subscription rights
certificates and payment of the subscription price (including in the case of any portion of the subscription price to be paid by delivery
of indebtedness for borrowed money owed to you by the Company, the method of delivery of evidence of such indebtedness for borrowed money
and any other supplemental documentation requested), will be at the election and risk of the participating rights holders, but if sent
by mail, it is recommended that such certificates and payments be sent by traceable or registered mail, properly insured, with return
receipt requested, and that a sufficient number of days be allowed to ensure delivery to the subscription agent and clearance of payment
prior to the expiration date and time.
| 9. | Procedures for the Depository
Trust Company Participants. |
If you hold your shares in street name through a broker, dealer, custodian
bank or other nominee who uses the services of The Depository Trust Company (“DTC”), you may exercise your basic subscription
rights and your over-subscription privilege through the facilities of DTC. If you would like to pay your entire subscription price
in cash, you must instruct your broker, dealer, custodian bank, or other nominee to elect to exercise your basic subscription right and
your over-subscription privilege (to the extent you wish to exercise it) through DTC’s PSOP Function on the “agents subscription
over PTS” procedures, and instruct DTC to charge the applicable DTC account for the subscription payment and deliver such cash amount
to the subscription agent. Shares of common stock validly and timely subscribed and paid for in cash in the rights offering will
be credited to the applicable DTC participant accounts upon settlement of the rights offering.
If you would like to pay some or all of the subscription price by delivery,
in lieu of cash, of an equivalent amount of indebtedness for borrowed money owed to you by the Company, you must instruct your broker,
dealer, custodian bank, or other nominee to elect to exercise your basic subscription right and your over-subscription privilege (to the
extent you wish to exercise it), with respect to which you will be paying the subscription price by delivery of such indebtedness, through
DTC’s PTOP Function, indicate to DTC that you intend to make the subscription payment by delivery of such indebtedness, and instruct
DTC to transfer your subscription rights from your account to the account of the subscription agent, and more generally follow all of
the procedures established by DTC. You must also follow the procedures set forth in Section 1 of these instructions under the heading
Payments of Subscription Price by Delivery of Indebtedness for Borrowed Money (including without limitation in respect of the confirmation
of the validity of such indebtedness for borrowed money and delivery of the applicable documentation in respect of such indebtedness for
borrowed money). DO NOT DELIVER ANY original evidence of such indebtedness for borrowed money
(principal and/or accrued and unpaid interest) OR any other supplemental documentation requested BY THE COMPANY IN RESPECT THEREOF, TO
DTC—SUCH EVIDENCE AND SUPPLEMENTAL DOCUMENTATION MUST DELIVERED DIRECTLY TO THE SUBSCRIPTION AGENT IN ORDER TO BE VALIDLY DELIVERED.
Shares of common stock validly and timely subscribed and paid for by delivering indebtedness for borrowed money in the rights offering
will be delivered by the subscription agent directly to the applicable bank, broker or other nominee through the DWAC system upon settlement
of the rights offering.
(I) DTC must receive your rights certificate,
Notice of Guaranteed Delivery (if applicable), and (to the extent such payment is cash) payment for the new shares, and (II) (to
the extent your payment is by delivery of indebtedness for borrowed money owed to you by the Company) the subscription agent must receive
the original evidence of such borrowed money and any supplemental documentation requested by the Company, before 5:00 p.m., New York
City time, on January 24, 2025, unless guaranteed delivery procedures are utilized with respect to delivery of your rights certificate,
as described above (in which case such rights certificate and payment must be received within the period described under “The
Rights Offering – Guaranteed Delivery Procedures” in the Prospectus.
| 10. | Determinations Regarding the
Exercise of Your Subscription Rights. |
The Company will resolve, in its sole and absolute
discretion, all questions concerning the timeliness, validity, form and eligibility of any payments of subscription price and exercise
of subscription rights, including time of receipt and eligibility to participate in the rights offering. The Company’s determination
will be final and binding. The Company, in its sole and absolute discretion, may waive any defect or irregularity, or permit a defect
or irregularity to be corrected within such time as the Company may determine. Once made, subscriptions and directions are irrevocable,
and the Company will not accept any alternative, conditional or contingent subscriptions or directions. The Company reserves the absolute
right to reject any subscriptions or directions if it determines that your exercise is not in accordance with the terms of the rights
offering, as set forth in the Prospectus and these Instructions, or in proper form, or the acceptance of which would be unlawful under
applicable law. You must resolve any irregularities in connection with your subscriptions before the expiration date and time, unless
the Company waives them in its sole discretion.
Neither the Company, nor the subscription agent
nor the information agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription will
be considered accepted, subject to the Company’s right to withdraw or terminate the rights offering, only when the subscription
agent receives a properly completed and duly executed subscription rights certificate and any other required documents and the full subscription
payment. The Company’s interpretations of the terms and conditions of the rights offering will be final and binding.
FOR
QUESTIONS REGARDING THE RIGHTS OFFERING, ASSISTANCE REGARDING THE METHOD OF EXERCISING RIGHTS, OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
OR OTHER RELEVANT DOCUMENTS, PLEASE CONTACT D.F.
King & Co., Inc., THE INFORMATION AGENT, TOLL-FREE AT (888) 567-1626.
Exhibit 99.2
[FORM OF LETTER TO STOCKHOLDERS
WHO ARE RECORD HOLDERS]
THE TERMS AND
CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●],
2024 (“PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS
ARE AVAILABLE ON REQUEST FROM D.F. KING & Co., Inc.
BY CALLING TOLL-FREE AT (888) 567-1626.
THE CHILDREN’S
PLACE, INC.
Non-Transferable
Subscription Rights to Purchase Up to $90,000,000 in Shares of Common Stock, representing 9,230,769 Shares
of Common Stock in the Aggregate
THE SUBSCRIPTION
RIGHTS ARE EXERCISABLE UNTIL 5:00 p.m., New York City time, on January 24, 2025, SUBJECT TO EXTENSION BY THE COMPANY
[●],
2024
Dear Stockholder:
This letter is being distributed
by The Children’s Place, Inc., a Delaware corporation (the “Company”), to all holders of record (the “Record
Holders”) of the Company’s common stock, par value $0.10 per share (the “Common Stock”) as of the
close of business on December 13, 2024 (the “Record Date”) in connection with the distribution to the Record
Holders, pursuant to the rights offering (the “Rights Offering”) described in the registration statement on Form S-1
initially filed by the Company with the United States Securities and Exchange Commission on October 15, 2024, as amended (Registration
No. 333-282664) and the Prospectus of non-transferable subscription rights (the “Rights”) to purchase shares
of Common Stock, on the terms and subject to the conditions described in the Prospectus. As described in the Prospectus, each Record
Holder is entitled to receive one Right for each full share of Common Stock owned by that Record Holder as of the close of business on
the Record Date.
In the Rights Offering, up
to an aggregate of 9,230,769 shares of Common Stock are being offered pursuant to the Prospectus. The Rights may be exercised at any
time during the Rights Offering subscription period, which will commence on December 24, 2024, and will expire at 5:00 p.m., New
York City time, on January 24, 2025 (the “Expiration Date and Time”), subject to extension by the Company in
its sole discretion in accordance with the Prospectus. Rights that are not validly exercised by the Expiration Date and Time will expire,
cease to be exercisable and have no value.
Each Right allows the holder
thereof to subscribe for 0.7220 shares of Common Stock (the “Basic Subscription Right”) at the price of $9.75 per
whole share of Common Stock (the “Subscription Price”). As an example, if you owned 1,000 shares of Common Stock on
the Record Date, you would receive 1,000 subscription rights pursuant to your Basic Subscription Right that would entitle you to purchase
up to 722 shares of Common Stock at a subscription price of $9.75 per whole share.
Additionally, Rights holders
who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional shares of Common Stock that remain unsubscribed
(such shares, the “Unsubscribed Shares”) as a result of any unexercised Basic Subscription Rights (the “Over-Subscription
Privilege”). The Over-Subscription Privilege allows a Rights holder to subscribe for additional shares of Common Stock at the
Subscription Price, subject to proration. If there are an insufficient number of Unsubscribed Shares available to fully satisfy the over-subscription
requests of Rights holders, those Rights holders who exercised their Over-Subscription Privilege will receive the available shares of
Common Stock pro rata based on the number of shares of Common Stock each Rights holder subscribed for under the Basic Subscription
Right. “Pro rata” means in proportion to the number of shares of Common Stock that you and the other Rights holders
have purchased by fully exercising Basic Subscription Rights on your Common Stock holdings.
You may exercise your Over-Subscription
Privilege only if you exercise your Basic Subscription Right in full.
Because the Company will
not know the total number of Unsubscribed Shares prior to the Expiration Date and Time, if a Record Holder wishes to maximize the number
of shares he, she or it may purchase pursuant to such holder’s Over-Subscription Privilege, such holder will need to deliver payment
in an amount equal to the aggregate Subscription Price for the maximum investment amount that the Record Holder wishes to invest, assuming
that no holders other than such Record Holder purchase any shares pursuant to their Basic Subscription Rights and Over-Subscription Privilege.
No minimum subscription is
required for consummation of the Rights Offering. No fractional shares of Common Stock will be issued upon the exercise of Rights
in the Rights Offering. Any fractional shares of Common Stock created by the exercise of Rights will be rounded down to the nearest whole
share. Any excess subscription payments received by Equiniti Trust Company, LLC (the “Subscription Agent”) will be
returned in the manner and form in which such payments were made, without interest or penalty, as soon as practicable following the Expiration
Date and Time and after all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected.
The Rights are evidenced
by non-transferable subscription rights certificates (the “Rights Certificates”). The Rights are non-transferable,
except that the Rights will be transferable by operation of law. The Rights will not be listed for trading on any securities exchange
or trading system.
The Company will not be obligated
to honor your exercise of Rights if the Subscription Agent receives the documents and payment of the Subscription Price relating to your
exercise after the Expiration Date and Time, regardless of when you transmitted the documents, provided that if you wish to exercise
the Rights, but you do not have sufficient time to deliver the Rights Certificate evidencing your Rights to the Subscription Agent before
the Expiration Date and Time, you may exercise your Rights by guaranteed delivery procedures described under “The Rights Offering-Guaranteed
Delivery Procedures” in the Prospectus.
The Company may extend the
Expiration Date and Time by giving oral or written notice to the Subscription Agent and D.F. King & Co., Inc., the information
agent for the Rights Offering, on or before the scheduled Expiration Date and Time. If the Company elects to extend the Expiration Date
and Time, the Company will issue a press release announcing such extension no later than 9:00 a.m., New York City time, on the next business
day after the most recently announced Expiration Date and Time.
Enclosed are copies of the following
documents:
| 3. | Instructions for Use of The Children’s
Place, Inc. Non-Transferable Rights Certificates; |
| 4. | Notice of Guaranteed Delivery; and |
| 5. | A return envelope addressed to the Subscription
Agent. |
Your prompt action is
required if you intend to participate in the Rights Offering. As described in the Prospectus, to exercise your Rights, you must properly
complete and duly execute your Rights Certificate and (if applicable) the Notice of Guaranteed Delivery, and deliver them, together with
payment in full (prior to the Expiration Date and Time) of the aggregate Subscription Price for all of the shares of Common Stock for
which you have subscribed pursuant to the Basic Subscription Rights and the Over-Subscription Privilege, to the Subscription Agent.
DO NOT SEND SUBSCRIPTION
RIGHTS CERTIFICATES, NOTICES OF GUARANTEED DELIVERY OR PAYMENTS DIRECTLY TO THE COMPANY.
Payment in Cash. If
you would like to pay the Subscription Price for your shares of Common Stock in cash, the cash payment, together with a properly completed
and executed Rights Certificate and any other supplemental documentation requested, must be received by the Subscription Agent, at the
Subscription Agent’s address set forth below, at or prior to the Expiration Date and Time in accordance with the Instructions for
Use of The Children’s Place, Inc. Non-Transferable Rights Certificates and the Prospectus.
Payment by Delivery of
Indebtedness for Borrowed Money. If you would like to pay some or all of the Subscription Price for your shares of Common Stock by
delivery, in lieu of cash, of an equivalent amount of indebtedness for borrowed money owed to you by the Company, you must contact
the Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention: Jared E. Shure, Chief Administrative
Officer, General Counsel & Secretary
Telephone: (201) 453-7049
as soon as practicable after the date of the
Prospectus (and in any event prior to exercising your Rights and delivering any indebtedness for borrowed money in payment therefor)
so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness for borrowed money
to be valid and eligible for delivery in payment of some or all of the Subscription Price and (ii) confirm the documentation that
you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for borrowed money as payment
for some or all of the Subscription Price. As it may take some time for the Company to evaluate and respond to requests to deliver indebtedness
for borrowed money in full or partial payment of the Subscription Price and for you, thereafter, to complete and provide the necessary
documentation to the Subscription Agent, the Company strongly recommends that you start this process as soon as possible and not wait
until the final days of the subscription period. Your delay in commencing this process may result in your being unable to timely deliver
your indebtedness for borrowed money as full or partial payment of the Subscription Price, which in turn would result in your purported
exercise of Rights to be paid for with such indebtedness for borrowed money being rejected.
Subject to the Company’s
determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to be valid and eligible for
delivery in payment of some or all of the Subscription Price, in order to be accepted, the original evidence of such indebtedness for
borrowed money (principal and/or accrued and unpaid interest) owed to you by the Company in the amount equivalent to the amount of the
Subscription Price, together with a properly completed and duly executed Rights Certificate and any other supplemental documentation
requested, must be received by the Subscription Agent, at the Subscription Agent’s address set forth below at or prior to the
Expiration Date and Time:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
Your properly completed and
duly executed Rights Certificate (subject to the procedure for guaranteed delivery thereof), and payment in full of the aggregate Subscription
Price, including final clearance of any checks (and, to the extent you are paying some or all of the Subscription Price by delivery of
indebtedness for borrowed money owed by the Company to you, the original evidence of such indebtedness, together with any supplemental
documentation requested by the Company) must be received by the Subscription Agent in the manner specified in the Prospectus at or prior
to the Expiration Date and Time.
Once you have exercised your
Rights, you may not revoke or change your exercise or request a return of the Subscription Price payment. Rights not exercised prior
to the Expiration Date and Time will expire and will have no value.
All questions regarding
the Rights Offering, and all requests for additional copies of the Prospectus or other relevant documents, should be directed to D.F.
King & Co., Inc., the information agent, by calling it toll-free at (888) 567-1626.
| |
Very truly yours, |
| |
|
| |
The Children’s Place, Inc. |
Exhibit 99.3
[FORM OF LETTER TO BROKERS AND OTHER NOMINEES]
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●], 2024 (“PROSPECTUS”) AND ARE INCORPORATED
HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS ARE AVAILABLE ON REQUEST FROM D.F. KING &
Co., Inc. BY CALLING TOLL-FREE AT (888) 567-1626.
Non-Transferable
Subscription Rights to Purchase Up to $90,000,000 in Shares of Common Stock, representing 9,230,769 Shares
of Common Stock in the Aggregate
THE SUBSCRIPTION
RIGHTS ARE EXERCISABLE UNTIL 5:00 p.m., New York City time, on January 24, 2025, SUBJECT TO EXTENSION BY THE COMPANY
[●], 2024
To Securities Dealers, Commercial Banks, Trust Companies and Other
Nominees:
This letter is being distributed
by The Children’s Place, Inc. (the “Company”) to securities dealers, commercial banks, trust companies
and other nominees in connection with the distribution to all holders of record (the “Record Holders”) of the Company’s
common stock, par value $0.10 per share (the “Common Stock”) as of the close of business on December 13, 2024
(the “Record Date”), pursuant to the rights offering (the “Rights Offering”) described in the registration
statement on Form S-1 initially filed by the Company with the United States Securities and Exchange Commission on October 15,
2024, as amended (Registration No. 333-282664) and the Prospectus of non-transferable subscription rights (the “Rights”)
to purchase shares of Common Stock, on the terms and subject to the conditions described in the Prospectus.
As described in the Prospectus,
each Rights holder is entitled to one Right for each full share of Common Stock owned by that Rights holder as of the close of business
on the Record Date.
In the Rights Offering, up
to an aggregate of 9,230,769 shares of Common Stock are being offered pursuant to the Prospectus. The Rights may be exercised at any
time during the Rights Offering subscription period, which will commence on December 24, 2024, and will expire at 5:00 p.m., New
York City time, on January 24, 2025 (the “Expiration Date and Time”), subject to extension by the Company in
its sole discretion in accordance with the Prospectus. Rights that are not validly exercised by the Expiration Date and Time will expire,
cease to be exercisable and have no value.
Each Right allows the holder
thereof to subscribe for 0.7220 shares of Common Stock (the “Basic Subscription Right”) at the price of $9.75 per
whole share of Common Stock (the “Subscription Price”). As an example, if you owned 1,000 shares of Common Stock on
the Record Date, you would receive 1,000 subscription rights pursuant to your Basic Subscription Right that would entitle you to purchase
up to 722 shares of Common Stock at a subscription price of $9.75 per whole share.
Additionally, Rights holders
who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional shares of Common Stock that remain unsubscribed
(such shares, the “Unsubscribed Shares”) as a result of any unexercised Basic Subscription Rights (the “Over-Subscription
Privilege”). The Over-Subscription Privilege allows a Rights holder to subscribe for additional shares of Common Stock at the
Subscription Price, subject to proration. If there are an insufficient number of Unsubscribed Shares available to fully satisfy the over-subscription
requests of Rights holders, those Rights holders who exercised their Over-Subscription Privilege will receive the available shares of
Common Stock pro rata based on the number of shares of Common Stock each Rights holder subscribed for under the Basic Subscription
Right. “Pro rata” means in proportion to the number of shares of Common Stock that the Rights holder and the other
Rights holders have purchased by fully exercising Basic Subscription Rights on the Common Stock holdings.
Because the Company will
not know the total number of Unsubscribed Shares prior to the Expiration Date and Time, if a Rights holder wishes to maximize the number
of shares he, she or it may purchase pursuant to such holder’s Over-Subscription Privilege, such holder will need to deliver payment
in an amount equal to the aggregate Subscription Price for the maximum investment amount that the Rights holder wishes to invest, assuming
that no holders other than such Rights holder purchase any shares pursuant to their Basic Subscription Rights and Over-Subscription Privilege.
No minimum subscription is
required for consummation of the Rights Offering. No fractional shares of Common Stock will be issued upon the exercise of Rights in
the Rights Offering. Any fractional shares of Common Stock created by the exercise of Rights will be rounded down to the nearest whole
share.
The Rights Offering provides
that payments of the Subscription Price may be made either in cash or (in the event that a Rights holder is a creditor of the Company
and desires to do so) by delivery of indebtedness for borrowed money owed to such Rights holder by the Company in accordance with the
procedures described in the Prospectus. If a Rights holder desires to exercise its Rights and pay some or all of the Subscription
Price by delivery of indebtedness for borrowed money owed to such Rights holder by the Company, that Rights holder will need to contact
the Company directly prior to making any such election (including so that the Company can in its sole and absolute discretion confirm
the validity and eligibility of such indebtedness as payment for some or all of the Subscription Price and confirm any additional documentation
that the Rights holder is required to deliver in order to properly make payment by delivering such indebtedness for borrowed money as
payment for the Subscription Price) and deliver such payment directly to the Equiniti Trust Company, LLC (the “Subscription Agent”)
and more generally follow the procedures in respect thereof that are outlined in the Prospectus. As it may take some time for
the Company to evaluate and respond to requests to deliver indebtedness for borrowed money in full or partial payment of the Subscription
Price and for you and the Rights holder, thereafter, to complete and provide the necessary documentation to the Subscription Agent (including,
with respect to each Rights holder paying some or all of the Subscription Price by delivery of indebtedness for borrowed money owed to
such Rights holder by the Company, your submission to the Subscription Agent of the VOI number that you will obtain with respect to such
Rights holder from DTC), the Company strongly recommends that Rights holders start this process as soon as possible and not wait until
the final days of the subscription period. A Rights holder’s delay in commencing this process may result in such Rights holder
being unable to timely deliver such indebtedness for borrowed money as full or partial payment of the Subscription Price, which in turn
would result in such Rights holder’s purported exercise of Rights to be paid for with such indebtedness for borrowed money being
rejected. Payment in full of the Subscription Price, regardless of whether it is made in cash or by delivering indebtedness for borrowed
money owed to a Rights holder by the Company, must be actually received prior to the Expiration Date and Time.
Any excess subscription payments
received by the Subscription Agent will be returned in the manner and form in which such payments were made, without interest or penalty,
as soon as practicable following the Expiration Date and Time and after all prorating calculations and reductions contemplated by the
terms of the Rights Offering have been effected.
The Rights are evidenced
by non-transferable subscription rights certificates issued in the names of the holders of record thereof. Rights held beneficially through
the Depository Trust Company (“DTC”) system will be evidenced electronically by DTC in the name of the beneficial
holder (or as applicable, in the name of the beneficial holder’s nominee). The Rights are non-transferable, except that the Rights
will be transferable by operation of law. The Rights will not be listed for trading on any securities exchange or trading system.
The Company is asking persons
who hold shares of Common Stock beneficially and who have received the Rights distributable with respect to those shares through a broker,
dealer, custodian bank, or other nominee, as well as persons who hold certificates of Common Stock directly and prefer to have such institutions
effect transactions relating to the Rights on their behalf, to contact the appropriate institution or nominee and request it to effect
the transactions for them.
The Company is not charging
any fee or sales commission to issue the Rights or shares of Common Stock upon the exercise of the Rights. The Rights holders will be
responsible for paying any commissions, fees, taxes or other expenses the Record Holders may charge. The Company will pay all fees and
expenses of the Subscription Agent and D.F. King & Co., Inc., the information agent for the Rights Offering, related to
the Rights Offering.
Enclosed are copies of the
following documentation:
| 2. | the Form of Letter to Clients of
Brokers and other Nominees; and |
| 3. | the Beneficial Holder Election Form. |
Your prompt action is
requested. To exercise the Rights, you should follow the procedures to submit any subscriptions through the facilities of DTC, as
described in “The Rights Offering – Procedures for DTC Participants” in the Prospectus. Please be aware
that separate procedures apply to subscriptions to be paid for with cash and subscriptions to be paid for by delivery of indebtedness
for borrowed money owed to a Rights holder by the Company.
Once a Rights holder has
exercised his, her or its Rights, such Rights holder may not revoke or change such exercise or request a return of the Subscription Price
payment. Rights not exercised prior to the Expiration Date and Time will expire and will have no value.
All questions regarding
the Rights Offering, and all requests for additional copies of the Prospectus or other relevant documents, should be directed to D.F.
King & Co., Inc., the information agent, by calling it toll-free at (888) 567-1626.
| |
Very truly yours, |
| |
|
| |
The Children’s Place, Inc. |
Exhibit 99.4
[FORM OF LETTER TO CLIENTS
OF BROKERS AND OTHER NOMINEES]
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●], 2024 (“PROSPECTUS”)
AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS ARE AVAILABLE ON REQUEST FROM D.F. KING &
Co., Inc. BY CALLING TOLL-FREE AT (888) 567-1626.
THE CHILDREN’S
PLACE, INC.
Non-Transferable
Subscription Rights to Purchase Up to $90,000,000 in Shares of Common Stock, representing 9,230,769 Shares
of Common Stock in the Aggregate
THE SUBSCRIPTION
RIGHTS ARE EXERCISABLE BY RECORD HOLDERS UNTIL 5:00 p.m., New York City time, on January 24, 2025, SUBJECT TO EXTENSION BY THE COMPANY
[●],
2024
To Our Clients:
We are sending this letter
to you because we hold shares of common stock, par value $0.10 per share (the “Common Stock”) of The Children’s
Place, Inc. (the “Company”) on your behalf through your account with us. The Company has commenced a rights offering
(the “Rights Offering”) described in the registration statement on Form S-1 initially filed by the Company with
the United States Securities and Exchange Commission on October 15, 2024, as amended (Registration No. 333-282664) and the
Prospectus of non-transferable subscription rights (the “Rights”) to purchase shares of Common Stock, on the terms
and subject to the conditions described in the Prospectus. The Company has distributed to each stockholder of record (collectively, the
“Record Holders”) of the Common Stock as of the close of business on December 13, 2024 (the “Record
Date”) one Right for each full share of Common Stock owned by that Record Holder as of the close of business on the Record
Date.
We are (or our nominee is)
the Record Holder of the Common Stock held by us for your account as of the Record Date. We can exercise your Rights only if you instruct
us to do so.
Once
you have instructed US to exercise your rights, you may not revoke or change the exercise or request a return of the subscription price
payment.
In the Rights Offering, up
to an aggregate of 9,230,769 shares of Common Stock are being offered pursuant to the Prospectus. The Rights may be exercised at any
time during the Rights Offering subscription period, which will commence on December 24, 2024, and will expire at 5:00 p.m., New
York City time, on January 24, 2025 (the “Expiration Date and Time”), subject to extension by the Company in
its sole discretion in accordance with the Prospectus. Rights that are not validly exercised by the Expiration Date and Time will expire,
cease to be exercisable and have no value. Each Right allows the holder thereof to subscribe for 0.7220 shares of Common Stock (the “Basic
Subscription Right”) at the price of $9.75 per whole share of Common Stock (the “Subscription Price”). Additionally,
Rights holders who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional shares of Common Stock
that remain unsubscribed (such shares, the “Unsubscribed Shares”) as a result of any unexercised Basic Subscription
Rights (the “Over-Subscription Privilege”). The Over-Subscription Privilege allows a Rights holder to subscribe for
additional shares of Common Stock at the Subscription Price, subject to proration.
No minimum subscription is
required for consummation of the Rights Offering. No fractional shares of Common Stock will be issued upon the exercise of Rights
in the Rights Offering. Any fractional shares of Common Stock created by the exercise of Rights will be rounded down to the nearest whole
share. Any excess subscription payments received by Equiniti Trust Company, LLC (the “Subscription Agent”) will be
returned in the manner and form in which such payments were made, without interest or penalty, as soon as practicable following the Expiration
Date and Time and after all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected.
Each Rights holder will be
required to submit payment in full for all the shares of Common Stock he, she or it wishes to buy with his, her or its Basic Subscription
Right and its Over-Subscription Privilege in the manner specified in the Prospectus at or prior to the Expiration Date and Time. Because
the Company will not know the total number of Unsubscribed Shares prior to the Expiration Date and Time, if a Rights holder wishes to
maximize the number of shares he, she or it may purchase pursuant to such holder’s Over-Subscription Privilege, such holder will
need to deliver payment in an amount equal to the aggregate Subscription Price for the maximum number of shares of Common Stock available
to such holder, assuming that no holders other than such holder purchase any shares pursuant to their Basic Subscription Rights and Over-Subscription
Privilege.
Instructions on How
to Exercise Your Rights Held Through Your Account with Us.
General
If you wish to exercise your
Rights held through your account with us, you will need to check and properly complete Box 2 (and at least one of Box 3, Box 4 and Box
5) of, and otherwise properly complete, sign and return to us, the “Beneficial Owner Election Form” enclosed with
this letter, and comply with any other requirements of the Prospectus (including payment of the Subscription Price), prior to the earlier
of (i) the Expiration Date and Time and (ii) such earlier deadline as applies to your account by the terms of your account
agreement with us. If you do not properly complete, sign and return to us the “Beneficial Owner Election Form” (or
fail to comply with any other requirements of the Prospectus) prior to the deadline referred to in the preceding sentence, or if you
check Box 1 on the “Beneficial Owner Election Form” and return it to us, we will not exercise any Rights on your behalf.
Exercise of Basic Subscription
Right
You may, through the exercise
of your Basic Subscription Right, elect to subscribe for a number of shares of Common Stock (rounded down to the nearest whole share)
equal to the number of Rights held in your account with us multiplied by 0.7220 (the subscription ratio). As an example,
if you owned 1,000 shares of Common Stock as of the Record Date through your account with us, you would be able to exercise 1,000 Rights
through your account with us and thereby have the right to purchase up to 722 Shares for the Subscription Price per Share with your Basic
Subscription Rights. For the avoidance of doubt, since each Right only represents the right to purchase a fraction of a Share, the maximum
number of shares of Common Stock for which you can subscribe through your account with us is lower than the number of Rights that you
are entitled to exercise through your account with us.
While you are not required
to fully exercise your Basic Subscription Right available through your account with us to participate in the Rights Offering, if you
do not do so, you will not be able to exercise any Over-Subscription Privilege.
Exercise of Over-Subscription
Privilege
If you wish to exercise your
Over-Subscription Privilege, you must (i) fully exercise your Basic Subscription Right and (ii) indicate the number of shares
of Common Stock you would like to subscribe for through the Over-Subscription Privilege in the space provided in Box 2 on the enclosed
“Beneficial Owner Election Form”. When you send in that information, you must also send the full purchase price for
the number of additional shares of Common Stock that you have requested (in addition to the payment due for shares purchased through
your Basic Subscription Right).
If there are an insufficient
number of Unsubscribed Shares available to fully satisfy the over-subscription requests of Rights holders, those Rights holders who exercised
their Over-Subscription Privilege will receive the available shares of Common Stock pro rata based on the number of shares of
Common Stock each Rights holder subscribed for under the Basic Subscription Right. “Pro rata” means in proportion
to the number of shares of Common Stock that you and the other Rights holders have purchased by fully exercising Basic Subscription Rights
on your Common Stock holdings.
Because the total number
of Unsubscribed Shares will not be known prior to the Expiration Date and Time, if you wish to maximize the number of shares of Common
Stock you may purchase pursuant to such holder’s Over-Subscription Privilege, you would need to deliver payment in an amount equal
to the aggregate Subscription Price for the maximum investment amount that you wish to invest, assuming that no holders other than you
purchase any shares pursuant to their Basic Subscription Rights and Over-Subscription Privilege.
Payment of Subscription
Price
The Rights Offering provides
that payments of the Subscription Price may be made either in cash or (in the event that you are a creditor of the Company and desire
to do so) by delivery of indebtedness for borrowed money owed to you by the Company in accordance with the procedures described in this
letter. While we are able to facilitate payments of the Subscription Price for cash in accordance with our applicable procedures,
if you desire to exercise your Rights and pay some or all of the Subscription Price by delivery of indebtedness for borrowed money owed
to you by the Company, you will need to contact the Company directly prior to making any such election and deliver such payment
directly to the Subscription Agent (as further described below)--we will not be able to effect delivery of any payment by delivery of
indebtedness for borrowed money on your behalf.
PAYMENT IN CASH: If
you desire to pay some or all of the Subscription Price for the shares of Common Stock in cash, check the applicable of Box 3 and/or
Box 4 and (if you are checking Box 3) enclose the appropriate payment when you return your “Beneficial Owner Election Form”.
PAYMENT BY DELIVERY OF
INDEBTEDNESS FOR BORROWED MONEY OWED TO YOU BY THE COMPANY: If you are a creditor of the Company and would like to pay some or all
of the Subscription Price for your shares of Common Stock by delivery, in lieu of cash, of an equivalent amount of indebtedness for borrowed
money owed to you by the Company, you must contact the Company at:
500 Plaza Drive
Secaucus, New Jersey 07094
Attention: Jared E. Shure,
Chief Administrative Officer, General Counsel & Secretary
Telephone: (201) 453-7049
as soon as practicable after the date of the
Prospectus (and in any event prior to exercising your Rights and delivering any indebtedness for borrowed money in payment therefor)
so that the Company can in its sole and absolute discretion, (i) determine whether it considers such indebtedness for borrowed money
to be valid and eligible for delivery in payment of some or all of the Subscription Price and (ii) confirm the documentation that
you will be required to deliver to the Subscription Agent in order to validly deliver such indebtedness for borrowed money as payment
for some or all of the Subscription Price. As it may take some time for the Company to evaluate and respond to requests to deliver indebtedness
for borrowed money in full or partial payment of the Subscription Price and for you, thereafter, to complete and provide the necessary
documentation to the Subscription Agent, the Company strongly recommends that you start this process as soon as possible and not wait
until the final days of the subscription period. Your delay in commencing this process may result in your being unable to timely deliver
your indebtedness for borrowed money as full or partial payment of the Subscription Price, which in turn would result in your purported
exercise of Rights to be paid for with such indebtedness for borrowed money being rejected.
Subject to the Company’s
determination, in its sole and absolute discretion, that it considers such indebtedness for borrowed money to be valid and eligible for
delivery in payment of some or all of the Subscription Price, in order to be accepted, the original evidence of such indebtedness for
borrowed money (principal and/or accrued and unpaid interest) owed to you by the Company in the amount equivalent to the amount of the
Subscription Price, together with any other supplemental documentation requested, must be delivered directly to the Subscription
Agent at the Subscription Agent’s address set forth below at or prior to the Expiration Date and Time:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
We will not be able to
effect delivery of any payment by delivery of indebtedness for borrowed money on your behalf. DO NOT SENT ANY PAYMENT BY DELIVERY OF
INDEBTEDNESS FOR BORROWED MONEY TO US OR TO THE COMPANY—ANY SUCH PAYMENT MUST BE DELIVERED DIRECTLY TO THE SUBSCRIPTION AGENT.
Return of Excess Payments
Any excess subscription payments
received by the Subscription Agent will be returned in the manner and form in which such payments were made, without interest or penalty,
as soon as practicable following the Expiration Date and Time and after all prorating calculations and reductions contemplated by the
terms of the Rights Offering have been effected.
Enclosed Materials
and Questions
We have enclosed with this
letter a copy of the Prospectus and the “Beneficial Owner Election Form”. The Rights Offering, this letter, and any
exercise of Rights, are subject in their entirety to the terms and conditions of the Prospectus.
The materials enclosed are
being forwarded to you as the beneficial owner of the Common Stock carried by us in your account but not registered in your name. Exercises
of Rights may be made only by us as the Record Holder and pursuant to your instructions. Accordingly, we request instructions as to whether
you wish us to elect to purchase any shares which you are entitled to purchase pursuant to the terms and subject to the conditions set
forth in the Prospectus. However, we urge you to read the Prospectus and other enclosed materials carefully before instructing us to
exercise your Rights.
Your instructions to us
should be forwarded as promptly as possible in order to permit us to exercise Rights on your behalf in accordance with the provisions
of the Rights Offering prior to the Expiration Date and Time.
If you have any questions
concerning the Rights Offering, you should contact your broker and/or nominee. All additional questions regarding the details of the
Rights Offering, and all requests for additional copies of the Prospectus or other relevant documents, should be directed to D.F. King &
Co., Inc., the information agent, by calling it toll-free at (888) 567-1626.
Exhibit 99.5
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●],
2024 (“PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS
ARE AVAILABLE ON REQUEST FROM D.F. KING & Co., Inc. BY
CALLING TOLL-FREE AT (888) 567-1626.
THE CHILDREN’S PLACE, INC.
FORM OF BENEFICIAL OWNER ELECTION
FORM
The undersigned acknowledge(s) receipt of
your letter (and the Prospectus and other enclosed materials referred to in such letter) relating to the distribution to the holders
of record on December 13, 2024 (the “record date”) of the common stock, par value $0.10 per share (the “common
stock”) of The Children’s Place, Inc. (the “Company”) of non-transferable subscription rights (“subscription
rights”) to purchase shares of the common stock (the “rights offering”). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings given such terms in the registration statement on Form S-1 initially filed by
the Company with the United States Securities and Exchange Commission on October 15, 2024, as amended (Registration No. 333-282664),
and the Prospectus.
With respect to any instructions to exercise
(or not to exercise) the subscription rights, the undersigned acknowledges that this form must be completed and returned such that it
will actually be received by you by the earlier of (i) 5:00 p.m., New York City time, on January 24, 2025, the scheduled expiration
date and time of the rights offering (which may be extended by the Company) and (ii) such earlier deadline as applies to my account
by the terms of my account agreement with you.
This form provides you with instruction as to
whether to exercise subscription rights distributed in the rights offering with respect to the shares of the Company’s common stock
held by you for the account of the undersigned, pursuant to the terms and subject to the conditions set forth in the Prospectus and the
related “Instructions for Use of The Children’s Place, Inc. Non-Transferable Subscription Rights Certificates”.
The undersigned acknowledges that no fractional shares of common stock will be issued.
Box 1. ¨
Please DO NOT EXERCISE ANY SUBSCRIPTION RIGHTS for shares of common stock.
Box 2. ¨
Please EXERCISE SUBSCRIPTION RIGHTS for shares of common stock as set forth below.
Instructional Note: The number of subscription
rights for which the undersigned gives instructions for exercise under the basic subscription right cannot exceed the number of subscription
rights that the undersigned is entitled to exercise through this nominee account, and for the avoidance of doubt, since each subscription
right only represents the right to purchase a fraction of a share of common stock, the maximum number of shares of common stock for which
the undersigned can subscribe using this form is the number of subscription rights the undersigned is entitled to exercise through this
nominee account multiplied by 0.7220 and rounded down to the nearest whole share of common stock. The undersigned
is only entitled to the over-subscription privilege if the undersigned exercises its basic subscription right in full.
| | |
Number of Rights
Exercised | | |
Number of
Shares
Subscribed For | | |
Subscription Price
per Share of
Common Stock | | |
Payment | |
| Basic subscription right | |
| | |
| x | | |
$ | 9.75 | | |
$ | (Line 1) | |
| Over-subscription privilege | |
N/A | | |
| x | | |
$ | 9.75 | | |
$ | (Line 2) | |
| Total Payment Required | |
| | |
| | | |
| | | |
$ | (Sum of Lines 1 and 2 must equal total of amounts in Boxes 3, 4 and/or 5.) | |
(more than one of Box 3, Box 4 and Box 5 may be checked if more
than one is applicable)
Box 3. ¨
Payment in cash in the following amount is enclosed: $ __________
Box 4. ¨
Please deduct payment from the following account maintained by you as follows:
Type of Account: __________ Account
No.: __________ Amount to be deducted: $ ______________
| Box 5. ¨ | The undersigned is, in accordance with the Prospectus, paying (check one box only) ¨ all
or ¨ a portion equal to $ ______________ of the subscription price for the
subscription rights being exercised on this form by delivering directly to Equinity Trust Company LLC (the subscription agent
for the rights offering), prior to the expiration date and time, indebtedness for borrowed money (principal and/or accrued
and unpaid interest) owed by the Company to the undersigned. The undersigned represents that is has contacted the Company to confirm
the validity and eligibility of such indebtedness as payment and to confirm any additional documentation that the undersigned is
required to deliver in order to properly make payment by delivering such indebtedness and followed all such other procedures
required by the Prospectus. The undersigned acknowledges that it is solely the responsibility of the undersigned to cause such
indebtedness (including any documentation requested by the Company in connection with the delivery of such indebtedness) to be
delivered to Equinity Trust Company LLC prior to the expiration date and time and that the undersigned’s failure to do so
may result in the exercise of the subscription rights for which such indebtedness was intended to be payment being
rejected. |
| |
Signature(s) |
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|
| |
Please type or print name(s) below: |
If this form is being signed by the undersigned
in its capacity as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other fiduciary
or representative, please provide the following information:
| Name: |
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| Capacity: |
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| Address (including zip code): |
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| Telephone Number: |
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Exhibit 99.6
THE CHILDREN’S PLACE, INC.
FORM OF NOMINEE HOLDER CERTIFICATION
The undersigned, a broker, dealer, bank, trustee,
depository or other nominee holder of rights (the “rights”) to purchase shares of common stock, par value $0.10 per
share (“common stock”), of The Children’s Place, Inc., a Delaware corporation (the “Company”),
pursuant to the rights offering described and provided for in the Company’s registration statement on Form S-1 initially filed
with the United States Securities and Exchange Commission (the “Commission”) on October 15, 2024, as amended
(Registration No. 333-282664) and a prospectus dated [●], 2024 filed with the Commission (the “Prospectus”),
hereby certifies to the Company and Equiniti Trust Company, LLC, as subscription agent for the rights offering, that (1) the undersigned
has exercised, on behalf of the beneficial owners thereof (which may include the undersigned), the number of rights specified below pursuant
to the basic subscription right (as described in the Prospectus) and the over-subscription privilege (as described in the Prospectus),
and (2) to the extent a beneficial owner has elected to subscribe for shares of common stock pursuant to an over-subscription privilege,
each such beneficial owner’s basic subscription right has been exercised in full.
Payments of Subscription Price in Cash
| |
No. of
Shares of
Common Stock
Owned on
Record Date |
Basic
Subscription Rights Exercised |
Over-Subscription
Privilege Exercised |
| 1. |
|
|
|
| 2. |
|
|
|
| 3. |
|
|
|
| 4. |
|
|
|
| 5. |
|
|
|
Payments of Subscription Price by Delivery by the Beneficial Owner,
directly to Equinity Trust Company, LLC, of Indebtedness for Borrowed Money Owed to Beneficial Owner by the Company
| |
Beneficial
Owner |
No. of
Shares
of Common
Stock Owned
on Record Date |
Basic
Subscription
Rights Exercised |
Over-Subscription
Privilege Exercised |
| 1. |
|
|
|
|
| 2. |
|
|
|
|
| 3. |
|
|
|
|
| 4. |
|
|
|
|
| 5. |
|
|
|
|
Name of Broker, Dealer, Bank, Trustee, Depository or Other Nominee:
Provide the following information if applicable:
Depository Trust Company (“DTC”) Participant Number
Participant:
DTC Subscription Confirmation Number(s)
Exhibit 99.7
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN THE CHILDREN’S PLACE INC.’S PROSPECTUS DATED [●], 2024 (“PROSPECTUS”) AND ARE INCORPORATED
HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS AND OTHER RELEVANT DOCUMENTS ARE AVAILABLE ON REQUEST FROM D.F. KING &
Co., Inc. BY CALLING TOLL-FREE AT (888) 567-1626.
Notice
of Guaranteed Delivery
For
Exercise of Basic Subscription Rights
(and the Oversubscription Privilege, if Applicable)
For Shares of Common Stock
of
The Children’s Place, Inc.
Pursuant to the Prospectus, dated [●]
This Notice of Guaranteed
Delivery, or one substantially equivalent hereto, must be used to exercise non-transferable subscription rights (“subscription
rights”) to purchase shares of common stock, par value $0.10 per share (“Common Stock”) of The Children’s
Place, Inc. (the “Company”) pursuant to the rights offering (the “rights offering”) described
in the registration statement on Form S-1 initially filed by the Company with the United States Securities and Exchange Commission
on October 15, 2024, as amended (Registration No. 333-282664) and the Prospectus, if a holder of subscription rights desires
to exercise such subscription rights but cannot deliver the non-transferable rights certificate(s) evidencing the subscription rights
to Equiniti Trust Company, LLC, the subscription agent (the “subscription agent”), at or prior to 5:00 p.m., New York
City time, on January 24, 2025 (the “expiration date and time”), as such expiration date and time may be extended
by the Company in its sole discretion in accordance with the Prospectus. If used, this Notice of Guaranteed Delivery must be received
by the subscription agent at or prior to the expiration date and time. See the section titled “The Rights Offering – Guaranteed
Delivery Procedures” in the Prospectus. Payment in full of the subscription price of $9.75 per whole share for each share of
Common Stock subscribed for upon exercise of such subscription rights, including final clearance of any checks (and, to the extent you
are paying some or all of the subscription price by delivery of indebtedness for borrowed money owed by the Company to you, the original
evidence of such indebtedness, together with any supplemental documentation requested by the Company) must be received by the subscription
agent in the manner specified in the Prospectus at or prior to the expiration date and time, even if the non-transferable rights certificate(s) evidencing
such subscription rights is being delivered pursuant to the procedure for guaranteed delivery thereof. If you are using this form, the
non-transferable rights certificate(s) evidencing such subscription rights must be received by the subscription agent within one
(1) business day following the expiration date and time. See the sections titled “The Rights Offering – Method of
Subscription – Exercise of Rights” and “The Rights Offering – Method of Payment” in the Prospectus.
This form must be delivered
to the subscription agent by one of the methods described below. DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
BELOW DOES NOT CONSTITUTE A VALID DELIVERY.
By First Class Mail:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
By Registered, Certified or Express Mail
or Overnight Courier:
Equiniti Trust Company, LLC
55 Challenger Road
Suite # 200
Ridgefield Park, New Jersey 07660
Attn: Reorganization Department
THE SUBSCRIPTION AGENT IS:
Equiniti
Trust Company, LLC
All questions regarding the rights offering,
and all requests for additional copies of the Prospectus or other relevant documents, should be directed to D.F. King & Co., Inc.,
the information agent, by calling it toll-free at (888) 567-1626.
Ladies and Gentlemen:
The undersigned hereby represents
that he, she or it is the holder of non-transferable rights certificate(s) representing subscription rights issued by The Children’s
Place, Inc., exercisable for at least the number of Shares pursuant to the basic subscription right as are set forth in the “Basic
Subscription Right” row of the table below, and that such non-transferable rights certificate(s) cannot be delivered to the
subscription agent at or before the expiration date and time. Upon the terms and subject to the conditions set forth in the Prospectus,
receipt of which is hereby acknowledged, the undersigned hereby elects to exercise the following subscription rights, pursuant to the
basic subscription right (and as applicable, the over-subscription privilege), as described in the Prospectus:
Rights Certificate No(s) (if available):
_______________
| | |
No. of Rights
Exercised | |
No. of
Shares
Subscribed
For | |
Per Share
Subscription
Price | | |
Payment | |
| Basic Subscription Right | |
| |
| |
$ | 9.75 | | |
$ | [●] | |
| Over-Subscription Privilege | |
N/A | |
| |
$ | 9.75 | | |
$ | [●] | |
| | |
| |
| |
| Total
Payment Required | | |
$ | [●] | |
Since each subscription right only represents
the right to purchase a fraction of a share of Common Stock, the number of shares of Common Stock that you are entitled to subscribe
for pursuant to the basic subscription right on any given non-transferable rights certificate is lower than the number of subscription
rights set forth on such certificate—See Line (a) of Form 1 of your non-transferable rights certificate for further details,
including on how to calculate the maximum number of shares of Common Stock that can be subscribed for pursuant to your non-transferable
rights certificate(s).
The undersigned understands that payment of the
subscription price of $9.75 per each whole share of Common Stock subscribed pursuant to the basic subscription right and the over-subscription
privilege, if applicable, must be received by the subscription agent at or before the expiration date and time, and represents that such
payment, in the aggregate amount set forth above, either (check appropriate box):
| ¨ | is being delivered to the subscription agent herewith;
or |
| ¨ | has been delivered separately to the subscription agent, and
was delivered in the manner set forth below (check appropriate box and complete information relating thereto): |
| ¨ | Personal
check or bank draft payable to “Equiniti Trust Company, LLC (acting as subscription
agent for The Children’s Place, Inc.)”. |
| ¨ | Wire
transfer of immediately available funds directly to the account maintained by Equiniti Trust
Company, LLC, as subscription agent, for purposes of accepting subscriptions in this Rights
Offering at JPMorgan Chase Bank, 55 Water Street, New York, New York 10005, ABA #021000021
or Swift Code: CHASUS33, Account # 530-354616 Equiniti Trust Company, LLC FBO The Children’s
Place, Inc., with reference to the rights holder's name. |
| ¨ | Delivery
of indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by
the Company to the rights holder (solely after contacting the Company as described
the Prospectus and the “Instructions for Use of The Children’s Place, Inc.
Non-Transferable Subscription Rights Certificates”, and further following the Company’s
determination, in its sole and absolute discretion, of validity and eligibility of such indebtedness
and the Company’s confirmation, in its sole and absolute discretion, of any additional
documentation that the rights holder is required to deliver), by delivery to the subscription
agent of original evidence of such indebtedness for borrowed money, together with any additional
documentation requested by the Company. |
GUARANTEE OF DELIVERY
(Not to Be Used for
Rights Certificate Signature Guarantee)
The
undersigned, a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc.,
or a commercial bank or trust company having an office or correspondent in the United States, or a bank, stockbroker, savings and loan
association or credit union with membership in an approved signature guarantee medallion program, pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934, as amended, guarantees that the undersigned will deliver to the subscription agent the certificates
representing the subscription rights being exercised hereby, with any required signature guarantee and any other required documents,
all within one (1) business day after the expiration date and time.
| Dated: |
|
| |
|
| |
|
| (Address) |
| |
| |
| (Name of Firm) |
| |
| |
| (Area Code and Telephone Number) |
| |
| |
| (Authorized Signature) |
The
institution that completes this form must communicate the guarantee to the subscription agent and must deliver the non-transferable rights
certificate(s) to the subscription agent within the time period shown in the Prospectus. Failure to do so could result in a financial
loss to such institution.
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