Home Market Finance SPoT Coffee a...

SPoT Coffee announces completion of equity financing and PPP-2 Loans

Spot Coffee

TORONTO, Canada – SPoT Coffee 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.

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.

SPoT Coffee 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.