SPOT COFFEE (CANADA) LTD. (TSX-V: SPP) (“SPoT” or the “Company”) is pleased to provide an update of its financial and current operations including franchise activities.

As announced by the Company in its news release of June 1, 2017, SPoT, through a wholly owned subsidiary, SPoT Coffee West Hartford, LLC, entered into a lease agreement with SOF-IX Blueback Square Holdings, LP to lease premises municipally known as 69 Memorial Road in West Hartford, Connecticut, comprising 3,000 sq. ft. of floor space. The Company further retained the architectural firm of L’ARC to provide architectural and interior design services, mechanical and electrical plans, and to secure the necessary approvals and building permits to commence the development of the SPoT West Hartford café. As has been planned by SPoT and its franchisee, Parisco Cafés, LLC, (“PCL”), the Company expects to complete the development of the SPoT West Hartford café in the third quarter of 2017. SPoT is now working closely with its real estate agents to find a suitable location for PCL’s second SPoT café in Connecticut.

Last week, the Planning Board of the Town of Clarence approved the long-awaited site plan application of the Company to build a drive-thru to service customers of the SPoT Transit café, located in the commercial neighbourhood of Transit Road in Buffalo. Accordingly, the Company is confident in obtaining the building permit for the proposed drive-thru this month. For more information concerning this event, please refer to the Company’s news release of December 19, 2016.

The development of SPoT Coffee Express café in Waterfront Village announced by the Company in its news release of April 18, 2017 has been rapidly progressing and has now reached at a stage where it will be ready to open for business in the middle of next month.

On May 16, 2017, and at the invitation of Roswell Park Cancer Institute of Buffalo (“Roswell Park”), the Company submitted a proposal, under the terms of Roswell Park’s Request for Proposal – Formal Bid # 17-48 Lobby Food Service, to build and operate a SPoT Coffee Express café in the hospital’s main lobby. SPoT has been negotiating with several serious franchisees who have expressed their interest in owning and operating this express café. The Company will report on the progress of this opportunity once it hears back from Roswell Park. For more information on this event, please refer to the Company’s news release of April 12, 2017.

The Company signed a franchise deposit agreement with a franchisee who is bidding for and negotiating a lease within the West Seneca Community Center and Library of Buffalo where he intends to build, own and operate a SPoT Coffee Express café. The Community Center and Library are presently under construction, which is scheduled to be completed in early spring of 2018. The franchisee plans to start the development of their SPoT Coffee Express café in early 2018, and anticipate being ready to open at the same time the construction of the Community Center and Library is completed in early spring of 2018.

SPoT signed a deposit agreement with a franchisee to develop a SPoT Coffee Express café in the newly renovated Larkin Center of Commerce (“LCC”) of Buffalo. Accordingly, the Company is presently negotiating to lease 1,500 sq. ft. in the main lobby area with direct access to the street for the planned Spot Coffee Express café. LCC is comprised of 1.3 million sq. ft. in 12 adjoining buildings on 32 acres under one roof. The LCC is New York’s largest mixed-use facility. It contains office space, retail space, manufacturing space and warehouse space in Buffalo’s redeveloped commercial, cultural and historic Larkin District. The Company expects to finalize the lease with LCC once the plans for the engineering work in the LCC lobby are delivered.

The Company is now finalizing franchise agreements with 2 serious franchisees for an additional full SPoT café and another new SPoT Coffee Express café. Two locations have been identified for leasing and are being studied as to their suitability for SPoT. The Company will be reporting shortly on the progress of these two franchise opportunities and their locations in the Buffalo area.

New Multi-Unit Franchise and Territories

Consistent with the Company’s new multi-unit franchise policy in response to franchisees who have indicated interest in purchasing the rights to develop and own no more than five SPoT cafés in an exclusive territory, the Company has started negotiations with prospective franchisees in the Washington, DC, Virginia and Mid-Atlantic areas.  In a multi-unit operation, SPoT requires a franchisee to work in the daily operations of a single main café, and to rely on experienced and well-trained general managers and staff to oversee the daily operations of the other SPoT cafés. SPoT will be hosting in Buffalo next month multi-unit potential franchisees who will be touring the Company’s cafés, coffee roasting and central kitchen facilities and negotiating multi-unit franchise agreements as well.

Shares for Debt Issued

As reported by the Company in its news releases of May 8, 14 and 24, 2017 respectively, SPoT issued a total of 833,333 common shares to two of its creditors at the price of $0.18 per share in full settlement of their combined debt of $150,000.

2018 Outlook

SPoT’s business plan, which considers the strong demand for SPoT franchises in the State of New York and neighboring states, foresees the full development and operation of approximately thirty-five (35) SPoT full cafés and Spot Express cafés before the end of 2018. This represents the minimum growth of nineteen (19) new cafés to the sixteen (16) SPoT cafés currently open for business. The Company’s management will keep SPoT shareholders informed as these new cafés are fully developed and commence their operations. The anticipated number of SPoT cafés in the Company’s business plan is a moving target and may well be accelerated by  participation by multi-unit franchises and the opening of the market of Connecticut and adjacent states for SPoT’s franchises.

About SPoT Coffee

SPoT Coffee trades on the TSX Venture Exchange under the symbol SPP. SPoT designs, builds, operates and franchises community oriented cafés and express cafés in New York State. SPoT’s community cafés provide its 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 its 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 third party resellers such as universities and hospitals.