Award Capital Corp.

May 08, 2008 17:05 ET

Award Capital Corp. Announces Qualifying Transaction With Spot Coffee Canada Inc.

TORONTO, ONTARIO--(Marketwire - May 8, 2008) - AWARD CAPITAL CORP. (TSX VENTURE:AWD.P) ("Award"), a Capital Pool Company, announces that it has entered into an arm's length binding letter agreement dated May 8, 2008 (the "Agreement") pursuant to which it has agreed to acquire, directly or indirectly, all of the issued and outstanding shares of Spot Coffee Canada Inc. ("Spot Canada").

Spot Canada is a private cafe & hospitality company that designs, develops and operates community oriented cafes to provide the highest quality service, light signature meals and "inhouse" roasted gourmet coffee to a growing number of discerning consumers. Spot Canada currently has operations in Toronto, Ontario and in New York State, and has adopted an aggressive business plan that calls for the development and operation of new cafes in upstate New York, Toronto, South Florida and in the Middle East.

The acquisition of Spot Canada will be Award's qualifying transaction (the "Qualifying Transaction") pursuant to the rules and policies of the TSX Venture Exchange (the "Exchange").

Award has agreed to acquire all of the issued and outstanding common shares of Spot Canada in exchange for Award common shares, having a deemed value of $0.25 per share, to Spot Canada shareholders in exchange for all of their common shares in the capital of Spot Canada. Each Spot Canada shareholder will be entitled to receive one Award common share for each share held by them in Spot Canada (after giving effect to a one (1) for six (6) split of existing common shares of Spot Canada, which shall occur prior to closing of the Qualifying Transaction). In addition, Award has agreed to issue replacement options and warrants to all holders of Spot Canada options and warrants who surrender such securities to Award pursuant to the Agreement. The replacement options and warrants issued by Award will have identical exercise terms as the Spot Canada options and warrants that are surrendered. It is expected that Spot Canada will complete one or more private placements of common shares at a price of $1.20 per share (prior to giving effect to the aforementioned split of Spot Canada common shares on a six (6) for one (1) basis) for minimum gross proceeds of not less than $1,000,000 prior to closing of the Qualifying Transaction. In connection with the execution of the Agreement, Award has provided a deposit in the amount of $25,000 to Spot Canada, which will become non-refundable upon completion of all necessary due diligence, subject to certain exceptions. Up to $50,000 in additional funds will be forwarded by Award to Spot Canada upon receipt of Exchange acceptance in respect of such advance.

Award is currently in the process of preparing a detailed press release regarding this Qualifying Transaction which will satisfy the disclosure requirements of the Exchange. Trading in the common shares of Award will remain halted pending the release of more fulsome disclosure regarding this Qualifying Transaction and the satisfaction of the initial filing requirements of the Exchange and a preliminary review by the Exchange.

Completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to, the satisfaction of the minimum listing requirements of the Exchange, Exchange approval of the Qualifying Transaction, a satisfactory due diligence review by Award, completion of the aforementioned private placement, the entering into of a definitive agreement in respect of the business combination, completion of the six (6) for one (1) split of Spot Canada common shares and the approval of the respective board of directors of Award and Spot Canada and, if applicable, their respective shareholders. The Qualifying Transaction will be an arms' length transaction.

Upon completion of the Qualifying Transaction, Spot Canada's current management will assume management responsibilities for Award. Spot Canada will have the right to appoint up to five directors to the board of the resulting company. In addition, it is contemplated that one existing director of Award, Pierre G. Gagnon, will remain on the board subsequent to the closing of the Qualifying Transaction.

Investors are cautioned that, except as disclosed in the management information circular or filing statement that is to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a Capital Pool Company should be considered highly speculative.

Sponsorship may be required by the Exchange in connection with the proposed Qualifying Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

There can be no assurance that the transaction will be completed as proposed or at all. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Award Capital Corp.
    George DeCristoforo
    (905) 793-6121