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SPoT Coffee Announces Completion of Equity Financing and Receipt of PPP-2 Loans

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TORONTO, May 14, 2021 /CNW/ - SPOT COFFEE (CANADA) LTD. (TSXV: SPP) ("SPoT" or the "Company") is pleased to announce completion of its previously announced non-brokered private placement of units (each a "Unit") at a price of C$0.05 per Unit. The Company has issued an aggregate of 9,100,600 Units for aggregate gross proceeds of C$455,030. Each Unit consists of one common share of SPoT (a "Common Share") and one-half of one common share purchase warrant (a "Warrant"). Each whole Warrant issued under this equity financing entitles the holder to acquire one additional Common Share at a price of $0.075 for a period of twenty-four months from the initial closing date. The Warrants include an acceleration clause to the effect that if at any time the closing trading price of the Common Shares on the TSX Venture Exchange is $0.09 or more for a period of thirty (30) consecutive days, the Company will be entitled to notify all holders of Warrants of its intention to force the exercise of the Warrants and to issue a press release to such effect, following which the holders of Warrants shall have thirty (30) days from the date of the press release to exercise the Warrants. All the Common Shares and Warrants issued in connection with this financing are subject to a statutory four-month hold period in accordance with applicable securities laws, which expires on September 15, 2021.

(CNW Group/Spot Coffee (Canada) Ltd.)
(CNW Group/Spot Coffee (Canada) Ltd.)

The proceeds raised under this financing are expected to be used for the following purposes:

(i)

To support and expand the Company's 2021 franchise program;

(ii)

To pay off a portion of the Company's outstanding debentures; and

(iii)

For general working capital purposes.

The Company also announces that it has received 11 loans (via its US subsidiaries) totalling US$1,192,576 under the Paycheck Protection Program loan (PPP-2) of the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (United States). The foregoing PPP-2 program contemplates that the Company can apply for forgiveness of any portions of the foregoing loans that are used toward specified payments, including rent, employee compensation, utilities, interest on bank loans, etc. The Company has been advised that it should expect roughly 70% of these loans to be eligible for forgiveness against repayment.

One insider participated in the offering, acquiring an aggregate of 1,300,000 Units. The foregoing subscription is considered to be a related party transaction and is therefore subject to the provisions of Multilateral Instrument 61-101 – "Protection of Minority Security Holders in Special Transactions", however exemptions are available from the minority shareholder approval and valuation requirements set forth in the foregoing Multilateral Instrument.

About SPoT Coffee

SPoT Coffee has been designing, building and operating company-owned and franchise community cafés in the northeastern United States for over 25 years. SPoT's cafés provide their customers with the highest quality service, signature made-to-order meals and award-winning micro-roasted coffee. Each SPoT café is distinctively designed to suit the local neighbourhood, creating a warm and friendly gathering place for the community. SPoT's commercial business focuses on the sale of roasted coffee beans to food service and grocery chains, business offices, and resellers such as universities and hospitals.

We seek Safe Harbor.

Forward Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Except as required by applicable securities laws, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

SOURCE Spot Coffee (Canada) Ltd.

Cision
Cision

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