Cherokee Global Brands has amended its agreement with lender Cerebus Capital Management to eliminate the need to raise $5.5 million in a special stock offering.
The Sherman Oaks apparel licensing company said the new arrangement with Cerebus eliminates the requirement that the company call the equity commitment rights under certain common stock purchase agreements made on Aug. 11. As a result, a special meeting of stockholders that had been called for Nov. 28 to approve the stock offering is expected to be cancelled.
“The amendment revises the financial covenants materially to enable the company to focus on growing the business for the long term,” Chief Executive Henry Stupp said in a statement.
Shares of Cherokee (CHKE) closed Monday up $1, or 53 percent, to $2.90 on the Nasdaq.