SPoT Coffee Finalized its Equity Financing and Receipt of PPP-2 Loans
SPOT
COFFEE (CANADA) LTD. announces
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").
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.
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.
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.