MISSISSAUGA, ON, Canada – The Second Cup Ltd. (“Second Cup” or the “Company”) (TSX: SCU) announced today that, as a result of management’s continued focus on protecting the health of the Company’s customers and employees and on supporting its network of franchisees in response to the ongoing COVID-19 pandemic, it intends to rely on the blanket relief provided by the Canadian Securities Administrators and Ontario Instrument 51-102 – Temporary Exemption from Certain Corporate Finance Requirements and defer the filing of its Annual Information Form.
At this time, the Company anticipates being able to complete and file the Annual Information Form by April 30, 2020.
Second Cup also announced that it expected to utilize the blanket relief in respect of its interim financial report for the first quarter of 2020, the associated management’s discussion & analysis and related filings for the first quarter of 2020, all of which it anticipates filing on or before June 28, 2020.
The blanket relief provides for up to a 45-day extension for periodic filings normally required to be made by reporting issuers during the period from March 23, 2020 to June 1, 2020.
The following material developments of the Company have occurred since March 12, 2020, being the date of filing of its annual financial statements:
- 128 of Second Cup’s 244 cafes and all 19 Bridgehead coffeehouses have temporarily suspended operations in response to the COVID-19 pandemic.
- Second Cup has deferred the collection from franchisees of the accrued royalties and cooperative advertising fund contributions for the period of February 23 to March 21, 2020 otherwise due on March 31, 2020.
- Second Cup is supporting conversations on behalf of its franchisees with landlords and financial institutions to request deferrals of rent or loan repayments, as required.
- The Company is working with the full network of Second Cup suppliers to arrange deferred payment terms to provide franchisees with additional flexibility to manage cash and payroll.
- Second Cup cafés across Canada that remain open are currently only offering take-out, delivery and drive-thru service.
The Company expects the ongoing COVID-19 pandemic and events and circumstances resulting from that pandemic to have a material impact on its business, operations and financial performance for at least the first half of 2020, but this impact cannot be quantified at this time because of the significant uncertainty associated with the ultimate extent, duration and severity of the pandemic itself, and with the government restrictions, effects on consumer behaviour and other factors associated with or resulting from that pandemic, many of which are beyond the Company’s control.
Second Cup continues to actively monitor all aspects of its business and operations and to work closely with its franchisees and other business partners but does not expect to provide further updates except as required by applicable law.
In connection with utilizing the blanket relief, the Company confirms that its management and other insiders are subject to an insider trading black-out policy that reflects the principles in Section 9 of National Policy 11-207 – Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.
About Second Cup Coffee Co.
Founded in 1975, The Second Cup Ltd. is a Canadian specialty coffee retailer operating franchised and company owned cafes across Canada. For more information, please visit www.secondcup.com or find the Company on Facebook and Twitter.
