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 Co-operators Financial Services Limited (“Co-operators”), a strategic investor in SEB, has loaned $18,000,000 to SEB (the “Loan”).

The Loan is evidenced by a promissory note dated December 23, 2022 (the “Promissory Note”) issued by SEB in favour of Co-operators and bears interest at 15% per annum, with the first payment payable on February 28, 2023, with each subsequent payment to be made on the last business day of every other month thereafter, with a maturity date being the earlier of the date Co-operators makes demand and November 30, 2025. The Loan is secured over the assets of SEB.

Proceeds from the Loan were used to fully repay SEB’s secured revolving $15,000,000 credit facility agreement (the “Credit Agreement”) that was in place with an international asset-focused lender (the “Lender”). The balance of the Loan proceeds will be used for SEB’s general working capital purposes.

As result of the Loan, the Credit Agreement with the Lender has been terminated. Furthermore, the following agreements have been terminated: (i) Co-operators’ amended and restated limited guarantee dated June 24, 2022, as amended, that was provided in favour of the Lender in support of SEB under the Credit Agreement; (ii) the corresponding amended and restated promissory note dated June 24, 2022, as amended, that was previously issued by SEB to Co-operators.

Co-operators is a related party to the Company and the issuance of the Promissory Note is considered a related party transaction within the meaning of TSXV Policy 5.9 and MI 61-101 (“MI 61-101”). SEB is relying on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in section 5.5(b) (issuer not listed on specified markets) and section 5.7(f) (loan to issuer, no equity or voting component). The Loan was obtained on reasonable commercial terms that were not less advantageous to the Company than if the Loan were obtained from an arm’s length party; and the Loan is not convertible or repayable in securities of the Company. A resolution of the board of directors of the Company was passed to approve the issuance of the Promissory Note, with the two director appointees of Co-operators, abstaining from voting. No materially contrary view or abstention was exercised or made by any other director.

The Company did not file a material change report more than 21 days before the expected closing of the transaction, which it considers reasonable in the circumstances, as the participation in the transaction by a related party of the Company was not definitive until shortly prior to closing of the transaction and the Company was attempting to close the transaction expeditiously.

Co-operators currently holds a $20,000,000 secured convertible debenture issued by SEB dated November 30, 2020, a $5,000,000 secured convertible debenture dated March 8, 2022 (collectively the “Debentures”) as well as approximately 3,500,000 common shares of SEB. There are currently approximately 175,000,000 common shares of SEB issued and outstanding. If Co-operators were to convent the principal amount of the Debentures, then Co-operators would beneficially own or control, directly or indirectly, an additional 100,000,000 common shares, for a total of approximately 103,500,000 common shares, representing approximately 37.6% of the approximately 275,000,000 then issued and outstanding common shares of the Company.

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