SEB Announces End of $ 5 Million Private Placement Loan, Canadian Business Journal

Mississauga, Ontario, March 9, 2022 (GLOBE NEWSWIRE) — Smart Employee Benefits Inc. (“SEB” or “Company”) (TSXV: SEB) today announced the issuance of $ 5,000,000 convertible bonds. (“Corporate Bonds”) is in compliance with a non-mediated private placement (“Funding”) with existing large strategic investors, Co-operators Financial Services Limited (“The Co-operators”). Financing income is used for general working capital purposes, including repayment of selected debt.

Financing conditions
The principal of the bond or part of it may be converted to SEB common stock (“stock”) at a conversion price of $ 0.25 per share (“conversion price”) at the holder’s option. Before the end of business on the last business day immediately prior to the maturity date, including changes in our control. Bonds or parts thereof may be convertible at our option if all of the following conditions are met: (I) The shares are listed on the Toronto Stock Exchange. (Ii) Shares are traded at at least 200% of the conversion price based on the volume-weighted average price for 20 consecutive days. (Iii) Our EBITDA in the last four quarters has exceeded $ 5,000,000 in two consecutive quarters. If the conditions prior to our bond conversion rights are met, we must notify the collaborators in writing within 15 business days from the date on which such conditions were first met. If we do not provide written notice within 15 business days from that date, our right to convert the bonds will be extinguished.

The interest rate on bonds is 12% per annum and is paid quarterly on the last day of May, August, November and February each year, with the principal paid on the maturity date (“maturity date”). November 30, 2025. Interest accrued by February 28, 2023 shall be paid quarterly in shares at the current market price, subject to the approval of the TSX Venture Exchange (“TSXV”). If TSXV approval is not obtained, such interest shall be capitalized and added to the principal of the bonds.

Interest accrued on or after February 28, 2023 until the end of our business line of credit (“End Date”) will be paid quarterly at the market price at that time, subject to TSXV approval. Suppose. If TSXV approval is not obtained, such interest shall be paid in cash. However, if we violate the line of credit due to such cash payments, such interest will be added to the principal of the bonds. ..

For interest accrued between the end date and the maturity date, the collaborator shall have the right to choose whether to receive interest in such quarters in cash or stock at the beginning of each quarter in which interest is paid. .. If TSXV does not agree to pay interest on the shares on the interest payment date, the interest will be paid in cash by the company on that payment date.

On the last day of May and November each year, an additional 3% of the principal balance of the bonds (“Pick Fee”) shall be paid to the collaborators.

For PikFee related to the payment date of PikFee prior to the end date, such Pik Fee shall be paid to the shares at the current market price, subject to TSXV approval. If TSXV approval is not obtained, such Pik fees shall be capitalized and added to the principal of the bonds.

For PikFee related to the PikFee payment date from the end date to the maturity date, we reserve the right to choose whether to pay such PikFee in cash or in stock on each payment date. If TSXV does not agree to pay the Pik Fee for the Shares on such payment date, the Pik Fee shall be paid by us in cash on such payment date.

Bonds and shares issued at the time of their conversion are subject to a holding period that expires four months and one day after the end of funding.

Bonds are guaranteed by our significant subsidiary (“guarantor”) and are our wholly owned subsidiary SEB Administrative Services Inc. It is secured by the first pledge of shares in (“SEB Admin”). No. 1 security for software owned by SEB Admin, and No. 2 security for our company and all other businesses, property and assets of our guarantor. Facility lender. The Company, cooperators and lenders of operating lines of credit, among other things, between the modified and revised creditors that govern the priorities of the first and second securities, as well as the relationship between the cooperators and such operating lines of credit. A party to the contract. Lend out to the company and face each other.

For changes in control of the Company (“Change of Control”), the Company shall notify the Cooperator in writing of the change of control and the Cooperator shall have the right to request it in its sole discretion. The company does one of the following: (I) Purchase all or part of the bonds at a price of 101% of the principal plus accrued interest. Or (ii) convert all or part of the corporate bonds at a conversion price.

Following amendments to Cooperative’s existing Investor Rights Agreement, Cooperative reserves the right to appoint three candidates to the Board of Directors of the Company. This is the right to appoint one member of our Governance and Compensation Committee and one observer to attend our Audit Committee. Currently, two seats on our board of directors are held by The Co-operators.

Currently, the number of issued shares is approximately 170,000,000. The co-operative currently owns convertible bonds that give it the right to convert to 80,000,000 shares. When converting the principal of convertible bonds currently owned by the co-operative to the principal of the bonds issued in accordance with the financing, the co-operative owns or manages directly, directly or in an advantageous manner. Indirectly, 100 million shares. This is about 37% of the approximately 270,000,000 issued shares issued at that time.

In connection with financing, we paid customary origination fees for such financing.

The issuance of bonds to a collaborator may be considered a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Document 61-101 (“MI61-101”). We rely on MI61-101 valuation and exemption from minority shareholder approval requirements contained in Sections 5.5 (b) (Company listed on TSXV) and 5.7 (1) (a) (Fair Market Value of Financing). increase. No more than 25% of MI 61-101’s market capitalization for such transactions. A resolution of our board of directors was passed to approve the funding, and the two directors of the co-operative appointed refrained from voting. The other directors did not effectively exercise or abstain from the opposite views or abstentions.

We did not submit a material change report more than 21 days before the expected closing of the funding, as the participation of our stakeholders in the transaction was not final until just before the closing. Of funding.

The SEB line of credit lender has agreed to raise funds. Upon termination of financing, SEB amended its definition of the term borrowing base to a $ 10 million revolving credit line with the lender of the operating line of credit to reflect the financing. We have signed a second amendment contract.

Smart Employee Benefits Inc. about:
SEB is a proven provider of state-of-the-art IT and benefits processing software, solutions and services for the Life and Group benefits market and government. Design, customize, build, and manage mission-critical end-to-end technology, talent, and infrastructure solutions using SEB’s unique technology and expertise, and partner technology. Manages mission-critical business processes for accounts of over 150 leading companies and government agencies, both domestically and globally. Over 90% of our revenues and contracts are multi-year periodic revenue stream contracts related to government, insurance, medical, benefits, and e-commerce. Our solutions are supported nationally and globally by more than 600 certified technical professionals in our multilingual infrastructure from eight offices across Canada and around the world.

Our solutions include multiple SaaS solutions, cloud solutions and services, managed services that provide smart sourcing (nearshore / offshore), managed security services, custom software development and support, professional services, and deep expertise in system integration. Includes both software and service-driven ecosystems. Specialty areas such as AI, CRM, BI, portals, EDI, e-commerce, digital transformation, analytics and project management. We have over 20 strategic partnerships / relationships with leading technology and consulting organizations worldwide and in the region.

Description of future prospects
Certain information in this release may constitute information about the future outlook. In some cases, but not all, forward-looking information includes forward-looking terms such as “plan,” “goal,” “expect,” or “not expect,” and “expected.” Can be identified using. , “Opportunity exists”, “positioned”, “estimate”, “intended”, “assume”, “expect”, “unexpected”, “believe”, or of such words or phrases Events or outcomes that describe variations, or specific actions, are “possible,” “possible,” “possible,” “possible,” “possible,” or “possible.” “Acquired”, “occurred” or “achieved”. In addition, statements that refer to expectations, expectations, or other characteristics of future events or situations contain information about the future outlook. Statements containing forward-looking information represent management expectations, estimates, and forecasts of future events, not past facts.

The forward-looking information contained in this release represents our current expectations and is subject to change accordingly. However, we expressly disclaim any intention or obligation to update or revise future outlook information as new information, future events, or other consequences, except as required by applicable law.

Neither TSX Venture Exchange Inc. nor its regulatory service provider (the term is defined in the policy of TSX Venture Exchange Inc.) is responsible for the validity or accuracy of this release.

This news release does not constitute an offer to sell or solicit an offer to sell the securities described in this document in the United States. The securities listed in this news release have not been, will continue to be, and will be offered or sold in the United States under the Securities Act of 1933 (the Securities Act of 1933) or the State Securities Act. I can not do it. Or to Americans unless they are registered under US securities law and applicable state securities law or an exemption from such registration is available.

All figures are in Canadian dollars unless otherwise stated.

Media and investor contacts
John McKim
President / CEO / CIO
Office (888) 939-8885 x 2354
Cell (416) 460-2817

CBJ News Maker

SEB Announces End of $ 5 Million Private Placement Loan, Canadian Business Journal

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