SPoT Coffee Announces First Stimulus Package Loan Approval and CEBA Approval

TORONTO, April 21, 2020 /CNW/ - SPOT COFFEE (CANADA) LTD. (TSX-V: SPP) ("SPoT" or the "Company") is pleased to report that the Company's subsidiaries have received approval from their lender for loans in the aggregate amount of U.S.$1,065,206 pursuant to the United States Small Business Administration ("SBA") program identified as the Coronavirus Aid, Relief, and Economic Security ("CARES") Act (the foregoing are collectively referred to as the "SBA-CARES Loans"). 

The Company will be able to use the proceeds of the SBA-CARES Loans for various items, including:

• Payroll costs;
• Costs of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums as well as employee salaries, commission, or similar compensations;
• Payment of rents and utilities; and
• interest on any other debt obligation.

Furthermore, the SBA-CARES Loans also have the following characteristics:

• Eligible for forgiveness in an amount equal to the sum of the above-mentioned costs and payments;
• Free from any personal or other guarantees and no fees are to SBA; and
• Able to exclude any amount that would normally be includible in gross income of the Company by reason of the debt forgiveness from gross income.

SBA-EIDL Update

As noted in the Company's news release dated April 6, 2020, in addition to the SBA-CARES Loans, the Company's US subsidiaries have also applied for a second set of loans under the SBA Economic Injury Disaster Loan ("EIDL") program (the "SBA-EIDL Loans"). The foregoing applications are still pending and are subject to determination by the SBA.

Loans under this program are in fact working capital loans that:

• Can be in an amount of up to $2-million (U.S.) depending on the eligibility of the qualifying company bearing interest rate of 3.75 per cent per annum;
• Are available for companies with businesses, like SPoT, which are directly affected by the COVID-19 disaster;
• Are used to pay fixed debts, payroll, accounts payable and other invoices that could have been paid had the disaster not occurred;
• Are not intended to replace lost sales or profits or for expansion;
• Will not be declined by the SBA for lack of collateral but will require borrowers to pledge what is available;
• Funds under this program come directly from the U.S. treasury, therefore the company needs to apply for this loan directly to SBA's disaster assistance program and not through its bank.

Eligibility for these working capital loans is based on:

• The size (must be small business) and type of business as well as the financial resources of the Company;
• A credit history of the company acceptable to SBA; and
• An ability of the company's business to repay the loan.

SPoT's management has reviewed its eligibility for the SBA-EIDL Loans and believes that SPoT meets the criteria for approval. SPoT will announce the SBA determination on this loan application once it has been completed.

Canada Emergency Business Account

SPoT has also been approved for the Canada Emergency Business Account, pursuant to which it has obtained a $40,000 line of credit at 0% interest, with no minimum monthly principal payments required until December 31, 2022.

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.

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