Carebook Announces Private Placement of $2.5 million Convertible Debt

MONTREAL, Dec. 15, 2022 /CNW Telbec/ - Carebook Technologies Inc. ("Carebook" or the "Company") (TSXV: CRBK) (OTCPK: CRBKF) (XETR: PMM1), a leading Canadian provider of innovative digital health solutions, is pleased to announce a $2.5 million private placement of convertible debt (the "Transaction").

"We are very pleased with the support this Transaction offers to Carebook and wish to thank our largest shareholders for their continuing belief in our strategy," said Carebook's CEO Michael Peters. "Carebook is moving forward in its journey towards profitability and this Transaction will help us ensure we can execute against the significant customer wins achieved this year and ensure we can meet our obligations relating to the completion of the acquisitions closed in 2021. As previously announced, we intend to pursue additional financing opportunities to ensure we have the capital required to implement our strategy and we will update the market in due course on our financing initiatives"

As part of the Transaction, the Company has entered into convertible loan agreements (the "Loan Agreements") with each of UIL Limited, currently the Company's largest shareholder, and MT Sidecar, L.P. (a limited partnership controlled by Mr. Stuart M. Elman, a director of the Company) (each, a "Lender" and collectively, the "Lenders") pursuant to which the Lenders have agreed to extend loans in favour of the Company in the principal amount of $1.25 million each for an aggregate principal amount of $2.5 million.

The loans under the Loan Agreements will mature on December 22, 2026. Interest on the principal amount outstanding under each Loan Agreement will accrue at an annual rate of CDOR + 10% and will be payable in cash upon (i) maturity, (ii) a prepayment of the principal amount, (iii) an event of default or (iv) a Conversion (as defined below). The obligations of the Company under the Loan Agreements will be subordinated to the Company's obligations under its existing senior credit facilities. To secure the Company's obligations under the Loan Agreements, the Company has agreed to grant to each of the Lenders a security interest and hypothec in all of the property and undertaking of the Company, subordinated to the security interests granted by the Company to its senior lenders. The proceeds from this financing will be used to repay in part the term facility with the senior lenders, to pay a portion of deferred purchase price owed to the Corehealth vendors, and for working capital and general corporate purposes.

Pursuant to the Loan Agreements, the principal amount under each Loan Agreement will be convertible, in whole or in part, at any time, and from time to time, following the date of issue, at the sole option of a Lender into common shares of the Company (each a "Common Share", and collectively, the "Common Shares") at a conversion price equal to CDN$0.15 per Common Share (a "Conversion"), for up to 8,333,333 Common Shares, or 16,666,666 Common Shares in the aggregate under both Loan Agreements. The Common Shares issuable upon such Conversion will be subject to resale restrictions in accordance with applicable Canadian securities legislation.

The Transaction is expected to close on or about December 20, 2022, subject to customary closing conditions, including approval from the TSX Venture Exchange ("TSX-V"). The Company has applied to the TSX-V to obtain conditional approval for the Transaction and the listing of the Common Shares issuable upon a Conversion.

Each of the Lenders is a "related party" of the Company within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). As a result, the Transaction is considered to be a "related party transaction" as such term is defined by MI 61-101, requiring the Company, in the absence of exemptions, to obtain a formal valuation of, and minority shareholder approval of, the "related party transaction". Pursuant to MI 61-101, the Company intends to rely on an exemption from the formal valuation requirement as no securities of the Company are listed or quoted on certain specified exchanges, and on an exemption from the minority shareholder approval requirement as the fair market value of the convertible loans does not exceed $2.5 million, as determined in accordance with MI 61-101. Neither the Company nor, to the knowledge of the Company after reasonable inquiry, any of the Lenders, has knowledge of any material information concerning the issuer or its securities that has not been generally disclosed. The Company intends to file a material change report within the required timeframe, which will contain all prescribed disclosure relating to this related party transaction.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined under applicable securities laws) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.

UIL Limited ("UIL") is a London Stock Exchange listed investment company of which Mr. Alasdair Younie, a director of the Company, is a representative. Currently, UIL beneficially owns or exercises control or direction over, directly or indirectly, 36,046,167 Common Shares of the Company, representing 46.4% of the issued and outstanding Common Shares. UIL also owns, or has director or control over, 5,693,383 warrants to purchase one Common Share and $1 million aggregate principal amount of loans convertible into up to 5,714,285 Common Shares.
Immediately after completion of the Transaction, UIL will beneficially own or exercise control or direction over, directly or indirectly, 36,046,167 Common Shares, representing 46.4% of the issued and outstanding Common Shares, as well as 5,693,383 Common Share purchase warrants and $2.25 million aggregate principal amount of loans convertible into up to 14,047,618 Common Shares. Assuming a full conversion of the convertible loans under which UIL is a lender, and assuming the exercise in full of the warrants held by UIL, UIL would own, or have direction or control over, 55,787,168 Common Shares, representing in the aggregate approximately 57.2% of the issued and outstanding Common Shares (on a partially diluted basis).
MT Sidecar, L.P. ("MT Sidecar") is a private investment limited partnership controlled by Stuart M. Elman, a director of the Company. Currently, MT Sidecar beneficially owns or exercises control or direction over, directly or indirectly, jointly with its affiliates, 24,032,996 Common Shares (including the 16,500 Common Shares held by Mr. Stuart M. Elman personally), representing 30.9% of the issued and outstanding Common Shares. MT Sidecar and its affiliates also own or exercise control or direction over 330,000 options to acquire Common Shares, 2,617,214 Common Share purchase warrants and $1 million aggregate principal amount of loans convertible into up to 5,714,285 Common Shares.
Following completion of the Transaction, MT Sidecar and its affiliates will beneficially own or exercise control or direction over, directly or indirectly, 24,032,996 Common Shares, representing 30.9% of the issued and outstanding Common Shares, as well as 330,000 options to acquire Common Shares, 2,617,214 Common Share purchase warrants and $2.25 million aggregate principal amount of loans convertible into up to 14,047,618 Common Shares. Assuming a full conversion of the convertible loans under which MT Sidecar or its affiliates are a lender, and assuming the exercise in full of the options and warrants held by affiliates of MT Sidecar, MT Sidecar and its affiliates would own, or have direction or control over, 41,027,828 Common Shares representing in the aggregate 43.3% of the issued and outstanding Common Shares (on a partially diluted basis).
The Loan Agreements described herein have been entered into by each of UIL and MT Sidecar for investment purposes. UIL and MT Sidecar may, from time to time, depending on market and other conditions, increase or decrease their respective beneficial ownership, control or direction over Common Shares or other securities of Carebook through market transactions, private agreements, or otherwise.
In accordance with National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, each of UIL and MT Sidecar will file an early warning report regarding this transaction on the System for Electronic Document Analysis and Review (SEDAR) at www.sedar.com under Carebook's issuer profile.

Carebook's digital health platform empowers its clients and more than 3.5 million members to take control of their health journey. During 2021, the Company completed the acquisitions of InfoTech Inc., a global leader in health and productivity risk management, and CoreHealth Technologies Inc., owner of an industry-leading wellness platform. In combination, these companies create a comprehensive digital health platform that includes both assessment tools and the technology to deliver complementary solutions. Carebook's shares trade on the TSXV under the symbol "CRBK," on the OTC Markets under the symbol "CRBKF," and are listed on the Open Market of the Frankfurt Stock Exchange under the symbol "PMM1." Carebook's head office is located at 1400-2045 Stanley Street, Montreal, Quebec H3A 2V4.

www.carebook.com

For further information contact:

Carebook Investor Relations Contact:

Olivier Giner, CFO
Email: ir@carebook.com
Telephone: (450) 977-0709

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

This release includes forward-looking information and forward-looking statements within the meaning of Canadian securities laws regarding Carebook, its subsidiaries and their business. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. The forward-looking information in this release include, but is not limited to, statements with respect to the intended use of proceeds from the Transaction and the expected closing date of the Transaction. Such statements are based on the current expectations of the management of Carebook and are based on assumptions and subject to risks and uncertainties. Although the management of Carebook believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and undue reliance should not be placed on such forward-looking statements. The forward-looking statements reflect the Company's current views with respect to future events based on currently available information and are inherently subject to risks and uncertainties. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including the Company's inability to obtain approval from the Exchange or to meet the other conditions for completion of the Transaction, economic factors, management's ability to manage and to operate the business of Carebook, management's ability to successfully integrate the Company's completed acquisitions and to realize the synergies of such acquisitions, management's ability to successfully complete product studies, the equity markets generally and risks associated with growth and competition, management's ability to achieve profitability for the Company, as well as the risk factors identified in the Company's management's discussion and analysis for the year ended December 31, 2021 and described under the heading "Item 21 – Risk Factors" in the Listing Application of the Company dated September 28, 2020, each of which can be found on SEDAR under the Company's profile at www.sedar.com. Although Carebook has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Carebook does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

SOURCE Carebook Technologies Inc.

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