TORONTO, April 21, 2020 /CNW/ - SPOT COFFEE
(CANADA) LTD. (TSX-V: SPP) ("SPoT"
or the "Company") is pleased to announce updated terms of its
pending offering of subordinate convertible secured debentures for
aggregate gross proceeds of up to $3.0
million (the "Debenture Financing"). As noted
in the Company's press release dated December 10, 2019, the Company's directors
previously approved the terms of a $2.5
million offering of convertible debentures. The
updated terms of the debentures being offered are as follows:
- The total principal amount of the debentures to be offered will
be up to $3.0 million
- There will be two classes of debentures – Class A and
Class B
- Class A Subordinate Convertible Secured Debentures will
be offered with the following terms:
-
- aggregate principal amount of $1,000,000 (denominations of not less than
$1,000 each);
- bearing interest at a rate of 6% per annum;
- term of two (2) years from issuance;
- principal amount convertible at maturity into common shares at
a price of $0.12 per common
share;
- interest portion convertible at the market price on the date of
conversion; and
- first tranche closing is expected to occur on approximately
June 1, 2020.
- Class B Subordinate Convertible Secured Debentures will
be offered with the following terms:
-
- aggregate principal amount of $2,000,000 (denominations of not less than
$1,000 each)
- bearing interest at a rate of 6% per annum;
- term of three (3) years from issuance;
- principal amount convertible at maturity into common shares at
a price of $0.18 per common
share;
- interest portion convertible at the market price on the date of
conversion; and
- closing is expected to occur in mid-August.
To date, the Company has received subscriptions for an aggregate
of $800,000 principal amount of Class
A Debentures.
The proceeds of the Company's Debenture Financing will be
applied towards the Company's 2020 financial plan, which includes
the following:
- The cost of the full development of one (1) Company-owned
traditional SPoT café and one (1) SPoT Express café location in the
City of Toronto, Ontario,
Canada;
- The cost of the full development of SPoT's new coffee roasting
facility to accommodate the continually rising retail demand for
the Company's award-winning gourmet coffee, as well as the demand
by SPoT's Company-owned and managed cafés along with a growing
number of new franchises scheduled to open in 2020;
- Partial repayment of the Company's current outstanding
debentures (approximately $1.3M
principal amount and interest outstanding), which carry an interest
rate of 9% per annum; and
- The cost of upgrades to Company-owned cafés and SPoT's central
kitchen facility.
The Class A and Class B Debentures will be secured against the
assets of the Corporation, subject to the priority of previously
issued secured indebtedness and any further secured indebtedness as
may be incurred in connection with government related emergency
COVID measures (for details on such programs and the Company's
pending or potential applications, see the Company's press releases
dated April 6 and April 20, 2020).
All Class A and Class B Debentures (and any common shares issued
upon conversion) will be subject to a statutory four-month hold
period in accordance with applicable securities
laws.
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.
SOURCE Spot Coffee (Canada)
Ltd.