Cosi Announces Results of Rights Offering.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 30, 2003

Cosi, Inc. (Nasdaq: COSI) (the "Company") announced today the results of its rights offering. The Company raised an aggregate of approximately $7.5 million in new cash from the sale of common stock in connection with the rights offering and pursuant to an investment agreement among Cosi and certain investors that was approved by the Company's stockholders. Approximately 3.6 million shares of common stock will be issued pursuant to the rights offering. Stockholders' basic subscriptions totaled approximately $4.4 million and over-subscriptions totaled approximately $6.8 million.

Pursuant to the terms of the rights offering and the investment agreement, the Company will promptly return approximately $5.8 million in over-subscriptions. The amount to be returned represents the aggregate amount of over-subscriptions delivered by stockholders that exceeded such stockholders maximum total subscription amount. The parties to the investment agreement will fund an aggregate of approximately $2.1 million pursuant to the terms of the investment agreement and will be issued a total of approximately 1.4 million shares of common stock. Additionally, approximately $4.5 million of senior secured notes issued by the Company and held by certain of the parties to the investment agreement will be converted into approximately 3 million shares of common stock at a conversion price equal to $1.50 (the per share purchase price in the rights offering).

Pursuant to the terms of the rights offering, each stockholder of Cosi of record as of November 24, 2003 received one subscription right for each share of Cosi common stock held by such stockholder. Each subscription right entitled the holder to purchase a number of shares of common stock with a value equal to an aggregate of $0.6776, at a purchase price per share equal to $1.50, as determined under the formula described in the Company's registration statement. The rights offering expired on December 19, 2003.

About Cosi

Cosi restaurants are all-day cafes that feature signature bread and coffee products in a unique environment that changes throughout the day. Cosi offers breakfast, lunch, afternoon coffee, dinner and dessert menus full of creative, cravable foods and beverages. Cosi has developed featured foods that are built around a secret, generations-old recipe for crackly crust flatbread. These products are freshly baked in front of customers throughout the day in open flame stone hearth ovens prominently located in each of the restaurants. There are 89 Cosi locations in eleven states and the District of Columbia.

"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; fluctuations in our quarterly results; labor shortages or increased labor costs; the rate of our internal growth, and our ability to generate increased revenue from existing restaurants; our ability to effectively manage our business with a reduced general and administrative staff; our ability to incorporate a franchising and area developer model into our strategy; the availability and cost of additional financing, both to fund our existing operations and to grow and open new restaurants; our ability to generate positive cash flow from operations; increased government regulation; changes in consumer preferences and demographic trends; supply and delivery shortages or interruptions; increasing competition in the fast casual dining segment of the restaurant industry; market saturation due to new restaurant openings; expansion into new markets; inadequate protection of our intellectual property; 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.