MISSISSAUGA, ON, Dec. 7, 2020 /CNW/ - Aegis
Brands Inc. (TSX: AEG) ("Aegis" or the "Company"), formerly
The Second Cup Ltd., today announced it has entered
into a loan agreement with CWB Franchise Finance ("CWB"), a
division of Canadian Western Bank Financial Group, pursuant to
which a revolving credit facility of $4.0
million has been made available to Aegis.
This new credit facility will be available for a period of
24 months and its continuance will be reviewed by CWB on an annual
basis. The revolving credit facility is secured by the
assets of the Second Cup and Bridgehead businesses and is expected
to be used for general corporate purposes.
"CWB Franchise Finance is a financial partner that is an
advocate for Canadian innovation and is dedicated to supporting us
in our expansion efforts," said Steven
Pelton, President and CEO of Aegis. "Given our expertise in
the Canadian retail and foodservice industry, combined with access
to top tier real estate assets across the country, the
possibilities for growth of Aegis are very exciting."
"We are happy to partner with Second Cup, a Canadian brand with
deep historical roots and recognition across the country," says
Dimitri Mazur, Senior Manager, CWB
Franchise Finance. "Our commitment to Aegis, the parent company, is
evidence that CWB believes strongly in the restaurant industry, and
that it will recover from the challenges caused by COVID-19. Now
more than ever, the restaurant industry needs financial partners
that know their business and understand how strong relationships
lead to successful outcomes. We look forward to providing
experienced brands with proactive solutions, including properly
structured debt."
Aegis was created with the vision of building a portfolio of
independent brands that can flourish with access to premium
resources and shared services required to help them thrive. The
Company has made great strides in the transformation from a single
coffee brand to Aegis while adjusting and adapting to meet the
dramatic changes in the foodservice and retail landscape heading
into 2021.
Second Cup plans to open 17 "non-traditional" café locations in
the remainder of 2020 and 2021, in addition to two drive-thru
locations before year-end. The affinity for the Bridgehead
Coffee brand remains strong despite the pandemic as evidenced by
significant increases in its e-commerce and wholesale
volume. The first three locations of the Company's Hemisphere
cannabis subsidiary have pivoted during the most recent lockdown in
Toronto to provide curbside and
delivery options. Management is also optimistic about another four
Hemisphere locations ready to be opened and new opportunities to
expand in Alberta.
About Aegis Brands Inc.
Founded in 1975, Aegis Brands Inc., formerly The Second Cup
Ltd., was a Canadian specialty coffee retailer operating franchised
and company-owned cafés across Canada. In November
2019, the Company announced its intention to implement a new
operating structure in support of its new strategy. The Company now
owns and operates the existing Second Cup Coffee Co. business as
part of a portfolio of brands that also includes Bridgehead Coffee
and Hemisphere Cannabis Co. For more information, please visit
www.aegisbrands.ca or find the brands on Facebook, Instagram and
Twitter.
About CWB Franchise Finance
CWB Franchise Finance, a division of CWB Financial Group,
specializes in financing for regional and national restaurants and
hotels and is a leading lender to the Canadian restaurant and
hospitality industries. Previously GE Capital Canada's franchise
financing arm, CWB Franchise Finance was acquired by CWB Financial
Group in 2016 following a successful track record of more than 800
clients with upwards of 1,525 property locations over 14 years. To
date, more than $3 billion has been
invested in the Canadian hotel and restaurant space.
About CWB Financial Group
CWB Financial Group is a diversified financial services
organization known for a highly proactive client experience serving
businesses and individuals across Canada. CWB Financial Group's key business
lines include full service business and personal banking offered
through branch locations of CWB and Internet banking services
provided by Motive Financial. Highly responsive nation-wide
specialized financing is delivered under the banners of CWB Optimum
Mortgage, CWB Equipment Financing, CWB National Leasing, CWB Maxium
Financial and CWB Franchise Finance. Trust services are offered
through CWB Trust Services. Comprehensive wealth management
services are provided through CWB Wealth Management and its
affiliate brands, including T.E. Wealth, Leon Frazer & Associates, CWB McLean &
Partners, and Canadian Western Financial. As a public company on
the Toronto Stock Exchange (TSX), CWB trades under the symbols
"CWB" (common shares), "CWB.PR.B" (Series 5 Preferred Shares),
"CWB.PR.C" (Series 7 Preferred Shares) and "CWB.PR.D" (Series 9
Preferred Shares). Learn more at www.cwb.com.
DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS
This press release may contain forward-looking information
that represents internal expectations, estimates or beliefs
concerning, among other things, future activities or future
operating results and various components thereof. The use of any of
the words "anticipate", "continue", "expect", "may", "will",
"project", "should", "believe", and similar expressions suggesting
future outcomes or events are intended to identify forward-looking
information. Forward-looking statements include the Company's
expectations with respect to the use of proceeds of the CWB loan,
the growth and strategy of the Company moving forward, the
Company's plans to open additional Second Cup and Hemisphere
locations and other related matters on the Company's business,
operations and financial performance. Statements regarding such
forward-looking information reflect management's current beliefs
and are based on information currently available to
management.
These statements are not guarantees of future performance and
are based on management's estimates and assumptions that are
subject to inherent risks and uncertainties, some of which are
beyond the Company's control, which could cause the Company's
actual performance and financial results in future periods to
differ materially from the forward-looking information contained in
this press release. The dynamic nature of the COVID-19 pandemic and
the events and circumstances resulting from or associated with the
pandemic mean that management can offer no assurance that
forward-looking information or forward-looking statements will
occur or be accurate in the circumstances. This is further
discussed under the heading "Risk Factors" in the Company's annual
information form available at www.sedar.com.
Management's estimates and assumptions include: the ability
to manage the risks (economic, operational, financial, and other
risks) associated with the COVID-19 pandemic, the ability to
identify new acquisition opportunities and to successfully
integrate past and future acquisition targets into the Company's
business, the ability to open additional Second Cup locations and
further expand into the retail cannabis market in both Ontario and Alberta, and the ability to negotiate
satisfactory leasing arrangements in respect of any new locations
to be opened. Risks and uncertainties include: the ability to
achieve anticipated benefits of the corporate reorganization; risks
relating to the identification and integration of acquisitions;
risks associated with the COVID-19 pandemic; financial, operational
and regulatory risks associated with the Company's continued
expansion into the retail cannabis market; and risks that leasing
arrangements for new locations may not be negotiated on terms
satisfactory to the Company or at all. Although the forward-looking
information contained in this press release is based upon what
management believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. Readers, therefore, should not place
undue reliance on any such forward-looking statements.
The risks associated with the COVID-19 pandemic include: the
ultimate extent, duration and severity of the pandemic itself and
the associated government restrictions; effects on consumer and
commercial behavior and other factors associated with or resulting
from such pandemic, including that the outbreak of the COVID-19
pandemic could result in additional cafés temporarily suspending
operations; a decrease in the willingness of guests to patronize
the Company's cafés; shortages of employees to staff the Company's
cafés; interruption of supplies from third parties upon which the
Company relies; the imposition of governmental regulations that
adversely impact the Company's business; the availability of the
CECRA program; landlord willingness to consider franchisees'
requests for deferrals of rent or loan repayments and/or the
Company's requests to amend or terminate certain café leases; that
franchisees may request that the Company take certain steps to
support its franchisees (whether financially or otherwise); and
that the pandemic and the consumer, governmental and commercial
response to it could materially impact economic activity in general
and otherwise have a material adverse effect on the Company's
business, financial condition and results of operations. Such
adverse effects could be rapid and unexpected.
All forward-looking information in this press release is
qualified by these cautionary statements. Forward-looking
information in this press release is presented only as of the date
made. Except as required by law, the Company disclaims any
intention or obligation to update or revise any forward-looking
statements to reflect subsequent events or circumstances.
SOURCE Aegis Brands Inc.