Coolsavings execs agree to exit for funding
The CEO and CFO agree to resign as part of a deal to pull in $15 million in funding for the company.
Company founder Steven Golden will resign as chairman and chief executive but will remain a board member. Chief Financial Officer Paul Case also resigned and his responsibilities will fall to Laurie Streling, senior vice president and controller, until a successor is found.
Coolsavings President Matthew Moog will assume the additional titles of CEO and board member.
The resignations come as part of the funding arrangement, in which Landmark Communications and its affiliates will immediately provide $5 million in loans to the company. Coolsavings offers software to help companies target their advertising and promotions, with such programs as targeted coupons and e-mail.
Additionally, Landmark Ventures VII, an affiliate, will provide up to $10 million in equity, providing the company hits certain targets. Landmark, in exchange for the two financing arrangements, will receive up to a 49 percent stake in the company, if the equity investments are fully completed.
Landmark will also receive the right to elect or designate a majority of the board seats.
Coolsavings, which saw its stock shoot up as high as 60 cents Tuesday, ended the day at 37 cents, down about 7.5 percent, or 3 cents. Its shares are trading far below its 52-week high of $4.06.
"We have worked hard to create a sound foundation and working business model that has gained significant consumer and advertiser acceptance in a few years," Golden said in a statement. "With the cash infusion and strategic involvement of Landmark, the company is poised for future growth under the guidance and direction of senior operating management led by Matthew Moog."
Coolsavings, like a number of Internet-related companies that have struggled in this market and economic downturn, earlier this year announced it would cut roughly 25 percent of its workforce as it trimmed the rate at which it burned through cash and seeks to become profitable.
The company had difficulty attracting investors from the day it went public. Shares of Coolsavings fell as much as 15 percent on their first day of trading in May last year.
The Landmark deal is subject to shareholder approval.