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.