TORONTO, ONTARIO--(Marketwire - July 24, 2012) - SPOT COFFEE (CANADA) LTD. (TSX VENTURE:SPP) ("SPoT" or the "Company") announced today that it has entered into a Memorandum of Understanding ("MOU") to grant a master license ("Master License") to Valshire, LLC ("Valshire") for the exclusive development of SPoT Coffee cafés in the state of Florida. In addition to earning an ongoing licensing fee charged quarterly as a percentage of each café's revenue, SPoT will also earn revenue based on the supply of SPoT's award winning micro-roasted coffee, related coffee products and corporate branded material. The initial expansion of cafés will focus on southern Florida and all Florida cafés will continue to be developed and operated based on the café operating model successfully established by SPoT. In addition to this driving SPoT expansion in Florida on a system-wide basis, this initial regional license will allow the Company to further develop and refine a broader regional licensing strategy which it can then roll out on a larger scale across North America to drive greater system-wide café expansion.
Valshire is a private Florida-based corporation that is controlled by Hassan Dahlawi, SPoT's largest shareholder and long-term supporter of the Company. Mr. Dahlawi is also a Director of the Company. Based on the terms of the MOU and the Florida Master License, Valshire has agreed to open not less than nine cafés in Florida (including its ability to sub-license) which includes the current SPoT café operating in Del Ray Beach, Florida. As part of this agreement, Valshire will be taking 100% ownership in the current Del Ray café and SPoT will take 100% ownership in the Rochester café, both of which were previously co-owned with Valshire on a 51/49% basis. SPoT will receive cash payments compensating for historical development costs. Both SPoT and Valshire have agreed to complete a formal agreement with corporate and exchange approvals no later than July 31, 2012.
"With all current locations performing extremely well and our growth plans for the North American expansion program ahead of schedule, now is a great opportunity to begin looking at developing a licensing model for the North American market," said Mr. Anton Ayoub, President of SPoT Coffee. "Valshire has been a strong partner for SPoT since inception and we are excited to work with them on developing the infrastructure for a corporate licensing program which we will ultimately replicate in different regions across the United States and Canada."
The foregoing transaction is subject to review and approval by the TSX Venture Exchange. As Mr. Dahlawi is a director and significant shareholder of the Company, both he and Valshire are considered to be "Non-Arm's Length Parties" under the rules and policies of the Exchange. Notwithstanding the foregoing, the proposed transaction is expected to be exempt from valuation and minority shareholder approval requirements under applicable securities laws.
ABOUT SPOT COFFEE
SPoT Coffee trades on the TSX Venture Exchange under the symbol SPP. SPoT designs, builds and operates community oriented cafés that provides its customers with the highest quality service, signature made-to order meals and the world's finest in-house roasted gourmet coffee. Each SPoT café is distinctively designed to meet the uniqueness of the local neighborhood, creating a warm and friendly gathering place for the community. SPoT's commercial business focuses on retail stores, business accounts and third party resellers such as universities and hospitals.
Forward Looking Statements
Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.