SEB Smart Employee Benefits Inc

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 an amending agreement to its secured revolving credit facility agreement (the “Credit Agreement”) with its international asset-focused lender (the “Lender”) to, among other things, extend the period of increased availability from $10,000,000 to $15,000,000 under the existing Credit Agreement, until December 31, 2022.

Co-operators Financial Services Limited (“Co-operators”), a strategic investor in SEB, has previously provided an amended and restated limited guarantee dated June 24, 2022 (the “Limited Guarantee”) in favour of the Lender in the amount of $10,000,000, and, accordingly, SEB had issued a corresponding amended and restated promissory note in favour of Co-operators dated June 24, 2022 (the “Amended and Restated Promissory Note”).

In conjunction with this amending agreement to the Credit Agreement, Co-operators has agreed to extend the term of its Limited Guarantee until December 31, 2022 (the “First Amending Agreement to the Limited Guarantee”), and the recitals in the Amended and Restated Promissory Note were correspondingly amended to better reference the Limited Guarantee as amended by the First Amending Agreement to the Limited Guarantee.

It remains the case that should the Limited Guarantee be called upon by the Lender and converted to a loan from Co-operators the amount would be deemed to be a repayment under the Credit Agreement with the Lender and as a result such amount would also be deemed to be owing by SEB to Co-operators under the Amended and Restated Promissory Note. Although there is currently nothing owing to Co-operators under the Amended and Restated Promissory Note, the Amended and Restated Promissory Note contemplated that SEB would be entitled to repay the interest thereunder in shares provided that any such share issuance(s) would be subject to applicable regulatory and TSX Venture Exchange approval at the time of such share issuance. However, since regulatory approval and minority shareholder approval has not been obtained for any such share issuance, as contemplated by the terms of the Amended and Restated Promissory Note, it is expected that the interest payable will either be capitalized and added to the principal under the Amended and Restated Promissory Note or repaid in cash. As set out in the Company’s press release dated September 6, 2022, the Company has also provided its written undertaking to the Ontario Securities Commission confirming that it will not issue shares in payment of interest under the Amended and Restated Promissory Note without first obtaining minority shareholder approval in accordance with Multilateral Instrument 61-101 (“MI 61-101”).

Co-operators is a related party to the Company and the issuance of the Amended and Restated Promissory Note was considered a related party transaction within the meaning of TSXV Policy 5.9 and MI 61-101. Co-operators holds a $20,000,000 convertible debenture issued by SEB dated November 30, 2020, as well as 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 first ranking security over the software owned by SEB Administrative Services Inc., a wholly owned subsidiary of SEB, and second ranking security over the other assets of SEB and SEB Administrative Services Inc. An intercreditor agreement, as amended, between the Lender and Co-operators governs the security granted to the Lender pursuant to the Credit Agreement and to Co-operators pursuant to the Debentures and the Amended and Restated Promissory Note, as well as the relationship between the Lender and Co-operators as it relates to such security.

About Smart Employee Benefits Inc.:SEB is an Insurtech company focused on Benefits Administration Technology driving two interrelated revenue streams – software/solutions and services. The Company is a proven provider of leading-edge IT and benefits processing software, solutions and services for the Life and Group benefits marketplace and government. We design, customize, build and manage mission critical, end-to-end technology, people and infrastructure solutions using SEB’s proprietary technologies and expertise and partner technologies. We manage mission critical business processes for over 150 blue chip and government accounts, nationally and globally. Over 90% of our revenue and contracts are multi-year recurring revenue streams contracts related to government, insurance, healthcare, benefits and e-commerce. Our solutions are supported nationally and globally by over 600 multi-certified technical professionals in a multi-lingual infrastructure, from multiple offices across Canada and globally.

Our solutions include both software and services driven ecosystems including multiple SaaS solutions, cloud solutions & services, managed services offering smart sourcing (near shore/offshore), managed security services, custom software development and support, professional services, deep systems integration expertise and multiple specialty practice areas including AI, CRM, BI, Portals, EDI, e-commerce, digital transformation, analytics, project management to mention a few. The Company has more than 20 strategic partnerships/relationships with leading global and regional technology and consulting organizations.

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

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS RELEASE 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 the 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 ContactJohn McKimmPresident/CEO/CIOOffice (888) 939-8885 x 2354Cell (416) 460-2817www.seb-inc.com