Smart Employee Benefits Inc. announces

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MISSISSAUGA, Ontario, June 24, 2022 (GLOBE NEWSWIRE) — Smart Employee Benefits Inc. (“Seb“or the”Company”) (TSXV: SEB) (OTCQB: SEBFF), a leader in benefits processing solutions and services, today announced that it has entered into a third amending agreement to its revolving credit facility agreement guaranteed (the “credit agreement”) with its international asset-based lender (the “Lender”) to, among other things, expand availability to $15,000,000 under the existing credit agreement.

Co-operators Financial Services Limited (“Cooperators), a strategic investor in SEB, previously provided a limited guarantee (the “Initial guarantee”) of $5,000,000 in favor of the lender, which initial guarantee allowed SEB to access $5,000,000 of unused commitment under the credit agreement.

Thereafter, The Co-operators provided an amended and restated limited warranty dated March 8, 2022 (the “Existing warranty“) pursuant to which the initial guarantee was amended and restated and SEB issued a promissory note dated March 8, 2022 in favor of The Co-operators (the “Promissory note”), to prove that the amounts paid, if any, by The Co-operators to the lender under the existing security would be deemed to be an unpaid loan of the same amount, due by SEB to The Co-operators under the promissory note.

Concurrent with the Third Amending Credit Agreement, The Co-operators has provided an Amended and Restated Limited Warranty dated June 24, 2022 (the “Amended and Updated Limited Warranty) in favor of the lender in the amount of $10,000,000 and accordingly SEB issued a corresponding amended and restated promissory note in favor of The Co-operators dated June 24, 2022 (the “Amended and Restated Promissory Note”). In the future, if the Lender invoked the Amended and Restated Limited Guarantee, any amount paid by The Co-operators to the Lender would be deemed to be a repayment under the Credit Agreement and, therefore, such amount would also be deemed due by SEB to The Co-operators under the Amended and Restated Promissory Note. SEB will have the right to repay interest under the amended and restated promissory note in shares, and any issuance of shares will be subject to applicable regulatory approval and to the TSX Venture Exchange at the time of issuance. actions.

The Co-operators currently holds a $20,000,000 convertible debenture issued by SEB dated November 30, 2020, and a $5,000,000 convertible debenture dated March 8, 2022 (collectively the “Debentures”). The debentures and the amended and restated promissory note are secured by a first ranking security interest in the software held by SEB Services administratifs inc., a wholly-owned subsidiary of SEB, and a second ranking security interest in the other assets of SEB and SEB Administrative Services Inc. Between Creditors, as amended, between the Lender and The Co-operators governs the security given to the Lender under the Credit Agreement and to The Co-operators under the Debentures and the Amended and Restated Promissory Note, as well as as the relationship between the lender and The Co-operators with respect to this security.

The issuance of the Amended and Restated Promissory Note accompanying the Amended and Restated Limited Guarantee may be considered a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 (“MI 61-101”). The Company has relied on the exemptions from the NI 61-101 minority shareholder valuation and approval requirements contained in Sections 5.5(b) (the Company is listed on the TSX Venture Exchange) and 5.7(1 )(a) (fair market value of the additional $5,000,000 contingent promissory note liability did not exceed 25% of the Company’s market capitalization) in connection with this transaction. A resolution of the Company’s Board of Directors was passed approving the issuance of the amended and restated promissory note, the two directors appointed by The Co-operators abstaining from voting. No substantially contrary views or abstentions were exercised or made by any other director.

The Company has not filed a material change report more than 21 days prior to closing, which it considers reasonable under the circumstances, as participation in the transaction by a related party of the Company was not final until shortly time before closing.

About Smart Employee Benefits Inc.:
SEB is an Insurtech company focused on benefits administration technology, which generates two interrelated revenue streams: software/solutions and services. The company is a recognized provider of industry-leading IT and benefits processing software, solutions and services for the employee and group benefits market and government. We design, customize, build and manage end-to-end technology, people and critical infrastructure solutions using SEB’s proprietary technologies and expertise and partner technologies. We manage critical business processes for over 150 blue chip and government accounts, nationally and globally. Over 90% of our revenues and contracts are multi-year recurring revenue stream contracts related to government, insurance, healthcare, benefits and e-commerce. Our solutions are supported nationally and globally by more than 600 multi-certified technical professionals in a multilingual infrastructure, from multiple offices across Canada and around the world.

Our solutions include both software and service-focused ecosystems, including multiple SaaS solutions, cloud solutions and services, managed services offering intelligent sourcing (near shore/offshore), managed security services, software development and custom software support, professional services, deep systems integration expertise, and several specialized practice areas including AI, CRM, BI, portals, EDI, e-commerce, digital transformation , analysis, project management, to name a few. The company has over 20 strategic partnerships/relationships with leading global and regional technology and consulting organizations.

Forward-looking statements
Certain information contained in this press release may constitute forward-looking information. In some, but not necessarily all, cases, forward-looking information may be identified by the use of forward-looking terminology such as “anticipates”, “target”, “expects” or “does not expect”. to”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of these words and phrases or state that certain actions, events or results “could”, “might”, “will”, “could”, “will” or “will be taken”, “will occur” or “will be achieved “. In addition, any statement that refers to expectations, projections or other characterizations of future events or circumstances contains forward-looking information. Statements containing forward-looking information are not historical facts but rather represent management’s expectations, estimates and projections regarding future events.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS ANNOUNCEMENT REPRESENTS THE COMPANY’S CURRENT EXPECTATIONS AND, ACCORDINGLY, IS SUBJECT TO CHANGE. HOWEVER, THE COMPANY EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release. .

All figures are in Canadian dollars unless otherwise stated.

Media and investor contact
John McKim
President/CEO/CIO
Office (888) 939-8885 ext. 2354
Cell (416) 460-2817
[email protected]
www.seb-inc.com

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