Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 26, 2015

Cosi, Inc.
(Exact Name of Registrant as Specified in Its Charter)


Delaware	000-50052	06-1393745
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

294 Washington Street, Ste. 510, Boston, Massachusetts		02108
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (857) 415-5000

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On March 26, 2015, Cosi, Inc. (the “Company”) issued a press release reporting its earnings for the fiscal year ended December 29, 2014. A copy of the press release is furnished as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.

On March 26, 2015, the Company hosted a teleconference and webcast to discuss its financial results for the fiscal year ended December 29, 2014. The text of the supplemental slides to which management referred during the presentation is furnished as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release of Cosi, Inc., dated March 26, 2015.

Exhibit 99.2 Slides for teleconference held on March 26, 2015.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 26, 2015	Cosi, Inc.


	By:	/s/ Vicki Baue
		Name: Vicki Baue
		Title: V. P. and General Counsel, CCO

EXHIBIT INDEX

Exhibit No.	Description	Paper (P) or Electronic (E)
99.1	Press Release of Cosi, Inc., dated March 26, 2015.	E

99.2	Slides for teleconference held March 26, 2015.	E

Exhibit 99.1

CONTACT:

Richard Bagge

Interim Chief Financial Officer

(857-415-5020)

InvestorRelations@getcosi.com

Così, Inc. Reports 2014 Fourth Quarter and Full Year Results

Boston, MA – March 26, 2015 – Così, Inc. (NASDAQ: COSI), the fast casual restaurant company, today reported a net loss for the fourth quarter ended December 29, 2014 of $(4,537,000), or $(0.18) per basic and diluted common share, compared with a net loss of $(4,113,000), or $(0.23) per basic and diluted common share in the fourth quarter of 2013.

Così’s total revenues for the 2014 fourth quarter decreased 2.2% to $19,503,000 from $19,946,000 in the 2013 fourth quarter.

System-wide comparable restaurant sales for the fourth quarter as measured for restaurants in operation for more than 15 months recorded an aggregate 3.9% increase compared to the fourth quarter of 2013. The breakdown in comparable sales between Company-owned and franchise-operated restaurants are as follows:

		For the 13 weeks ended December 29, 2014
	Company-owned	4.2%
	Franchise-operated	3.5%
	Total System	3.9%

For the fiscal year ended December 29, 2014 the net loss was $(16,625,000) or $(0.82) per basic and diluted common share, compared to fiscal 2013, when the net loss was $(11,444,000), or $(0.64) per basic and diluted common share.

Così’s total revenues for fiscal 2014 decreased 9.9% to $77,758,000 from $86,327,000 in fiscal 2013. Company-owned net restaurant sales declined 10.1% in fiscal 2014 to $74,905,000, compared to $83,338,000 in fiscal 2013.

System-wide comparable restaurant sales for fiscal 2014 as measured for restaurants in operation for more than 15 months recorded an aggregate 3.5% decline when compared to fiscal 2013. The breakdown in comparable sales between Company-owned and franchise-operated restaurants are as follows:

		For the 52weeks ended December 29, 2014
	Company-owned	(4.7%)
	Franchise-operated	(1.7%)
	Total System	(3.5%)

“We are fortunate to benefit from a combination of a positive business environment for fast casual along with strong consumer reaction to the work we are doing” stated RJ Dourney, Cosi, Inc’s President and CEO. Dourney went on to say “I am pleased with the fourth quarter 2014 results and remain confident in our plan for 2015 and beyond”.

2014 Fourth Quarter Financial Performance Review

Company-owned restaurant net sales decreased by 3.3% in the fourth quarter to $18,596,000, compared to $19,226,000 in the previous year’s quarter due to a sales decline of $1,910,000 from restaurants closed subsequent to the fourth quarter of 2013 which was offset by a 4.2% increase in comparable restaurant net sales. Additionally, roughly $637,000 of sales came from 1 new location and 3 locations transferred from Franchisees.

Fiscal 2014 Financial Performance Review

Restaurant net sales decreased by approximately $8.4 million, or 10.1%, during fiscal 2014, as compared to fiscal 2013, due to a $7.9 million decrease in net sales related to closing 10 Company-owned restaurants during fiscal 2014 and approximately $3.5 million, or 4.7%, decrease in net sales in our comparable restaurant base, partially offset by $3.0 million in sales from the conversion of 3 franchised restaurants to Company owned and 1 new restaurant opening. The decrease in comparable net sales was comprised of 5.1% decrease in traffic, partially offset by 0.4% increase in average check.

Così reported that as of December 29, 2014 it had cash balances of $21,560,000

As previously announced, the Company expects to host an investor teleconference webcast at 5:00 p.m. Eastern Time on March 26, 2015 to discuss the Company’s results for the fourth quarter 2014. The webcast will be broadcast live and available for replay for a limited time thereafter at:

Audio

Dial-In Number: 877 474 9503

Secondary Dial-In Number: 857 244 7556

Participant Code: 77005019

Note: Participants should dial in a few minutes prior to the start time

Webcast

Website link: http://investors.getcosi.com

Note: Live, then archived for one year

Replay

Dial-In Number: 888-286-8010

Secondary Dial-In Number: 617-801-6888

Participant Code: 51951306

Note: Available from March 26, 2015 (at 9:00 PM ET) until April 2, 2015 (at 11:59 PM ET)

About Così, Inc.

Così® (http://www.getcosi.com) is an upscale national fast casual restaurant company. At the heart of every restaurant is a hearth where the Così® signature flatbread is made from scratch throughout the day. The flatbread is made from a generations-old recipe and is part of many Così® favorites. Così® was founded on the idea that good for you food should be delicious. Menu items are made using fresh ingredients and distinctive sauces and spreads to create edgy flavors. The menu features made-to-order sandwiches, tossed salads, bowls, breakfast wraps, melts, all natural soups, signature Squagels®, artisan flatbread pizzas, S`mores, snacks and desserts. Guests can also enjoy handcrafted beverages and a variety of coffee-based and specialty beverages.

Così® employees create a welcoming environment where guests are invited to relax and enjoy great food. In many cases, Così® is the cornerstone of the communities that they are in and take pride in supporting community organizations and local charities. There are currently 63 Company-owned and 49 franchise restaurants operating in sixteen states, the District of Columbia, Costa Rica and the United Arab Emirates.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains statements that constitute forward- looking statements under the federal securities laws. Forward-looking statements are statements about future events and expectations and not statements of historical fact. The words "believe," "may," "will," "should," "anticipate," "estimate," "expect," "intend," "objective," "seek," "plan," "strive," or similar words, or negatives of these words, identify forward- looking statements. We qualify any forward-looking statements entirely by these cautionary factors. Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to management. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the cost of our principal food products and supply and delivery shortages and interruptions; labor shortages or increased labor costs; changes in demographic trends and consumer tastes and preferences, including changes resulting from concerns over nutritional or safety aspects of beef, poultry, produce, or other foods or the effects of food-borne illnesses, such as E. coli, “mad cow disease” and avian influenza or “bird flu”; competition in our markets, both in our business and in locating suitable

restaurant sites; our operation and execution in new and existing markets; expansion into new markets including foreign markets; our ability to attract and retain qualified franchisees and our franchisees’ ability to open restaurants on a timely basis; our ability to locate suitable restaurant sites in new and existing markets and negotiate acceptable lease terms; the rate of our internal growth and our ability to generate increased revenue from our existing restaurants; our ability to generate positive cash flow from existing and new restaurants; fluctuations in our quarterly results due to seasonality; increased government regulation and our ability to secure required government approvals and permits; our ability to create customer awareness of our restaurants in new markets; the reliability of our customer and market studies; cost effective and timely planning, design and build out of restaurants; our ability to recruit, train and retain qualified corporate and restaurant personnel and management; market saturation due to new restaurant openings; inadequate protection of our intellectual property; our ability to obtain additional capital and financing; adverse weather conditions which impact customer traffic at our restaurants; and adverse economic conditions. Further information regarding factors that could affect our results and the statements made herein are included in our filings with the Securities and Exchange Commission.

Additional information is available on Così's website at

http://www.getcosi.com in the investor relations section.

Cosi, Inc.

Consolidated Balance Sheets

As of December 29, 2014 and December 30, 2013

(dollars in thousands)

Assets	December 29, 2014			December 30, 2013
Current assets:
Cash and cash equivalents	$	21,560		$	6,021
Accounts receivable, net		581			594
Notes receivable, current portion		551			551
Inventories		825			779
Prepaid expenses and other current assets		1,279			1,348
Total Current Assets		24,796			9,293

Furniture and fixtures, equipment and leasehold improvements, net		7,308			8,195
Notes receivable, net of current portion		-			-
Other assets		1,327			1,115
Total Assets		33,431			18,603


Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable	$	1,519		$	2,462
Accrued liabilities		9,336			9,088
Deferred franchise revenue		18			18
Current portion of long-term liabilities		177			196
Total current liabilities		11,050			11,764

Long-term debt, net		6,623			-
Deferred franchise revenue		1,724			1,931
Other liabilities, net of current portion		1,663			2,189
Total Liabilities		21,060			15,884

Stockholder's equity:
Common stock - $0.01 par value, 100,000,000 shares authorized,		383			181
38,410,196 and 18,106,979 shares issued, respectively
Additional paid-in capital		323,256			297,181
Treasury stock, 59,886 shares at cost		(1,198	)		(1,198	)
Accumulated deficit		(310,070	)		(293,445	)
Total stockholder's equity		12,371			2,719
Total liabilities and stockholder's equity		33,431			18,603

The accompanying notes are an intergral part of these consolidated financial statements.

Cosi, Inc.

Consolidated Statements of Operations and Comprehensive Loss

For the Three and Twelve Month Periods Ended December 29, 2014 and December 30, 2013

(dollars in thousands, except share and per share data)

		Three Months Ended						Twelve Months Ended
		December 29, 2014			December 30, 2013			December 29, 2014			December 30, 2013
		(Unaudited)			(Unaudited)			(Audited)			(Audited)
Revenues:
Restaurant net sales		$	18,596		$	19,226		$	74,905		$	83,338
Franchise fees and royalties			907			720			2,853			2,989
	Total revenues		19,503			19,946			77,758			86,327

Costs and expenses:
Cost of food and beverage			5,454			4,836			20,078			20,736
Restaurant labor and related benefits			7,406			7,899			29,046			32,379
Occupancy and other restaurant operating expenses			6,825			7,071			27,720			28,971
			19,685			19,806			76,844			82,086
General and administrative expenses			3,194			3,283			12,359			11,746
Depreciation and amortization			581			630			2,394			2,724
Restaurant pre-opening expenses			15			-			15			29
Provision for losses on asset impairments
and disposals			105			423			346			1,122
Closed store costs			(24	)		56			172			124
Lease termination expense (income), net			150			(56	)		1,468			57
Gain on sale of assets			-			(34	)		(50	)		(34	)
Total costs and expenses			23,706			24,108			93,548			97,854
Operating loss			(4,203	)		(4,162	)		(15,790	)		(11,527	)
Other income (expense):
Interest expense			(178	)		-			(471	)		-
Debt issuance amortization			(164	)					(446	)		-
Other income			8			49			82			83
Total other income			(334	)		49			(835	)		83

Net loss and comprehensive loss		$	(4,537	)	$	(4,113	)	$	(16,625	)	$	(11,444	)
Per Share Data:
Loss per share, basic and diluted		$	(0.18	)	$	(0.23	)	$	(0.82	)	$	(0.64	)

Weighted average common shares outstanding			24,828,125			18,012,465			20,271,585			17,993,858

The accompanying notes are an integral part of these consolidated financial statements.

		Three Months Ended						Twelve Months Ended
		December 29, 2014			December 30, 2013			December 29, 2014			December 30, 2013

Revenues:
Restaurant net sales			95.3	%		96.4	%		96.3	%		96.5	%
Franchise fees and royalties			4.7	%		3.6			3.7	%		3.5	%
	Total revenue		100.0	%		100.0			100.0	%		100.0	%
Cost and expenses:
Cost of food and beverage (1)			29.3	%		25.2			26.8	%		24.9	%
Restaurant labor and related benefits (1)			39.8	%		41.1			38.8	%		38.9	%
Occupancy and other restaurant operating expenses (1)			36.7	%		36.7			37.0	%		34.8	%
			105.9	%		103.0			102.6	%		98.5	%
General and administrative expenses			16.4	%		16.5			15.9	%		13.6	%
Depreciation and amortization			3.0	%		3.2			3.1	%		3.2	%
Restaurant pre-opening expenses			0.1	%		-			0.0	%		0.0	%
Provision for losses on asset impairments and disposals			0.5	%		2.1			0.4	%		1.3	%
Closed stores costs			-0.1	%		0.3			0.2	%		0.1	%
Lease termination expense and closed store costs			0.8	%		(0.3	)		1.9	%		0.1	%
Gain on sales of assets			0.0	%		(0.2	)		-0.1	%		0.0	%
	Total costs and expenses		121.5	%		120.8			120.3	%		113.4	%
Operating loss			-21.5	%		(20.8	)		-20.3	%		-13.4	%
Interest expense			0.9	%		-			-0.6	%		0.0	%
Debt issuance expense			-0.8	%		-			-0.6	%		0.0	%
Other income			0.0	%		0.2			0.1	%		0.1	%
	Net loss and comprehensive loss		-23.3	%		(20.6	) %		-21.4	%		-13.3	%

(1)	These are expressed as a percentage of restaurant net sales versus all other items expressed as a percentage of total revenues

	For the Twelve Months Ended
	December 29, 2014						December 30, 2013
	Company- Owned		Franchise		Total		Company- Owned		Franchise		Total

Restaurants at beginning of period		70		52		122		75		50		125
New restaurants opened		1		2		3		-		4		4
Franchise-owned converted to Company-owned		3		3		-		-		-		-
Company-owned converted to Frachised-owned		-		-		-		1		1		-
Restaurants permanently closed		10		4		14		4		3		7
Restaurants at end of period		64		47		111		70		52		122

Exhibit 99.2

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Safe Harbor Concerning Forward Looking Statements Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Matters discussed in this presentation that relate to events or developments which are expected to occur in the future, including any discussion, expressed or implied, of anticipated growth, new store openings, operating results or earnings, constitute forward-looking statements under the federal securities laws and not statements of historical fact. The words "believe," "may," "will," "should," "anticipate," "estimate," "expect," "intend," "objective," "seek," "plan," "strive," or similar words, or negatives of these words, identify forward- looking statements. We qualify any forward-looking statements entirely by these cautionary factors. Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to management. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the cost of our principal food products and supply and delivery shortages and interruptions; labor shortages or increased labor costs; changes in demographic trends and consumer tastes and preferences, including changes resulting from concerns over nutritional or safety aspects of beef, poultry, produce, or other foods or the effects of food-borne illnesses, such as E. coli, “mad cow disease” and avian influenza or “bird flu”; competition in our markets, both in our business and in locating suitable restaurant sites; our operation and execution in new and existing markets; expansion into new markets, including foreign markets; our ability to attract and retain qualified franchisees and our franchisees’ ability to open restaurants on a timely basis; our ability to locate suitable restaurant sites in new and existing markets and negotiate acceptable lease terms; the rate of our internal growth and our ability to generate increased revenue from our existing restaurants; our ability to generate positive cash flow from existing and new restaurants; fluctuations in our quarterly results due to seasonality; increased government regulation and our ability to secure required government approvals and permits; our ability to create customer awareness of our restaurants in new markets; the reliability of our customer and market studies; cost effective and timely planning, design and build out of restaurants; our ability to recruit, train and retain qualified corporate and restaurant personnel and management; market saturation due to new restaurant openings; inadequate protection of our intellectual property; our ability to obtain additional capital and financing; adverse weather conditions which impact customer traffic at our restaurants; and adverse economic conditions. Further information regarding factors that could affect our results and the statements made herein are included in our filings with the Securities and Exchange Commission. Additional information is available on the Cosi, Inc. website at www.getcosi.com.

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Fiscal 2014 Teleconference Agenda Introductory Comments Financial Results Slide 4 – Restaurant Margin Performance Q4 Slide 5 – Reconciliation of Non-GAAP Measures To Net Income Q4 Slide 6 – Restaurant Margin Performance YTD Slide 7 – Reconciliation of Non-GAAP Measures To Net Income YTD CEO Comments

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Restaurant Margin Performance – Q4 U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) 13 Weeks Ended 13 Weeks Ended Margin December 29, 2014 December 30, 2013 Change (1) Restaurant Net Sales $ 18,596 100.0% $ 19,226 100.0% --- Comp Sales % (2) 4.2% -5.7% Cost of Food and Beverage $ 5,454 29.3% $ 4,836 25.2% 410 Basis Points Increase Gross Profit $ 13,142 70.7% $ 14,390 74.8% 410 Basis Points Decrease Labor and Related Benefits $ 7,406 39.8% $ 7,899 41.1% 130 Basis Points Decrease Other Operating Expenses $ 2,799 15.1% $ 2,732 14.1% 100 Basis Points Increase Controllable Contribution $ 2,937 15.8% $ 3,759 19.6% 380 Basis Points Decrease Occupancy Costs $ 4,026 21.7% $ 4,339 22.6% 90 Basis Points Decrease Restaurant Cash Flow $ (1,089) -5.9% $ (580) -3.0% 290 Basis Points Decrease (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter (2) As reported in public filings - assumes 13 week quarter

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Reconciliation of Non-GAAP Measures To Net Income 13 Weeks Ended 13 Weeks Ended December 29, 2014 December 30, 2013 Restaurant Net Sales $ 18,596 $ 19,226 Cost of Food and Beverage $ 5,454 $ 4,836 Labor and Related Benefits $ 7,406 $ 7,899 Occupancy and Other Operating Expenses $ 6,825 $ 7,071 Restaurant Cash Flow $ (1,089) $ (580) Franchise Fees and Royalties $ 907 $ 720 General and Administrative Expenses $ 3,194 $ 3,283 Depreciation and Amortization $ 581 $ 630 Restaurant Pre-Opening Expense $ 15 $ - Provision for Asset Impairments and Disposals $ 105 $ 423 Lease Termination Expense and Closed Store Costs $ 126 $ - Gain on Sale of Assets $ - $ (34) Operating Loss $ (4,203) $ (4,162) Interest Expense $ (178) $ - Debt Issuance Amortization $ (164) Other Income, net 8 49 Net Loss $ (4,537) $ (4,113) EPS $ (0.18) $ (0.23)

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) U.S. Dollars in Thousands (1) 52 Weeks Ended 52 Weeks Ended Margin December 29, 2014 December 30, 2013 Change (1) Restaurant Net Sales $ 74,905 100.0% $ 83,338 100.0% --- Comp Sales % (2) -4.7% -5.1% Cost of Food and Beverage 20,078 26.8% 20,736 24.9% 190 Basis Points Increase Gross Profit 54,827 73.2% 62,602 75.1% 190 Basis Points Decrease Labor and Related Benefits 29,046 38.8% 32,379 38.9% 10 Basis Points Decrease Other Operating Expenses 10,859 14.5% 11,357 13.7% 80 Basis Points Increase Controllable Contribution 14,922 19.9% 18,866 22.6% 260 Basis Points Decrease Occupancy Costs 16,861 22.5% 17,614 21.1% 140 Basis Points Increase Restaurant Cash Flow $ (1,939) -2.6% $ 1,252 1.5% 400 Basis Points Decrease (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (1) Due to Rounding, some percentages might not foot. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. (2) As reported in public filings - assumes 52 week year. Restaurant Margin Performance - YTD

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Reconciliation of Non-GAAP Measures To Net Income 52 Weeks Ended 52 Weeks Ended December 29, 2014 December 30, 2013 Restaurant Net Sales $ 74,905 $ 83,338 Cost of Food and Beverage 20,078 20,736 Labor and Related Benefits 29,046 32,379 Occupancy and Other Operating Expenses 27,720 28,971 Restaurant Cash Flow (1,939) 1,252 Franchise Fees and Royalties 2,853 2,989 General and Administrative Expenses 12,359 11,746 Depreciation and Amortization 2,394 2,724 Restaurant Pre-Opening Expenses 15 29 Provision for Asset Impairments and Disposals 346 1,122 Lease Termination Expense and Closed Store Costs 1,640 181 Gain on Sale of Assets (50) (34) Operating Loss (15,790) (11,527) Interest Expense (471) - Debt Issuance Amortization (446) - Other Income, net 82 83 Net Loss $ (16,625) $ (11,444) EPS $ (0.82) $ (0.64)

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * State of the Business Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. 8

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * 2014 Heavily Focused on Building the Foundation Be aggressive addressing key issues Leverage what works Build a strong corporate culture Absolute clarity as to our priorities We listened to our guest Test for tomorrow Be ready

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Brand Clarity has been Established Focus Groups and Consumer intercepts Put into test what we took away We are happy with the results we are seeing

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Menu Refresh are underway Foundation for technology Brand consistency Hearthstone component is leveraged Profit initiatives to help deliver our 2015 plan 2015 Moving Forward

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. Guidance We believe we are on course to go cash flow positive (excluding capital expenditures) by year end. Later this year we will start talking about our future. 13

Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. * Proprietary and confidential. For internal use only. © 2009 Così, Inc. All rights reserved. Board of Directors Leadership and Operations Team Investors Friends in the industry Support 14

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