Spot Coffee receives permit for second Florida cafe
2013-08-28 14:40 ET - News Release
Mr. Anton Ayoub reports
SPOT COFFEE PROVIDES UPDATE ON STATE OF FLORIDA LICENSING
Spot Coffee (Canada) Ltd. has provided an update on its licensing transaction to grant licences to Valshire LLC for the development of Spot Coffee cafes in the state of Florida. Effective Jan. 1, 2013, the company entered into a share exchange agreement for its jointly controlled entities, Valshire Spot Inc. and Florida Spot LLC, where the company owns 100 per cent of the common shares of Spot Valshire and the joint venture partner owns 100 per cent of the common shares of Spot Delray Beach.
Spot has now obtained all necessary permits for its second licensed cafe in the state of Florida, Spot Coral Gables, and has initiated the build-out phase of the cafe. The company has been earning a continuing licensing fee of 5 per cent of the revenue on a monthly basis from its licensed Florida cafes. In addition to earning a continuing licensing fee charged quarterly as a percentage of each cafe's revenue, Spot has also been earning revenue based on a 5-per-cent surcharge on the cost of all supplies of Spot's award-winning microroasted coffee, related coffee products and corporate branded material.
Further expansion of the company's North American regional licensing program is expected to commence in 2014. The company expects to license additional regions in 2014, increasing the amount of national expansion in subsequent years. The initial expansion of cafes will focus on southern Florida, and all Florida cafes will continue to be developed and operated based on the cafe operating model successfully established by Spot. The Florida licensing model will permit the company to further develop and refine its broader regional licensing strategy.
The foregoing transaction is subject to review and final approval by the TSX Venture Exchange. As the principal of Valshire, Hassan Dahlawi is a director and significant shareholder of the company. Both he and Valshire LLC are considered to be non-arm's-length parties under the rules and policies of the exchange. Notwithstanding the foregoing, the proposed transaction is exempt from valuation and minority shareholder approval requirements under applicable securities laws.
