SelectCore Ltd.
TSX VENTURE : SCG

SelectCore Ltd.

March 30, 2010 16:51 ET

SelectCore Completes US$5,000,000 Financing With Comvest Capital

TORONTO, ONTARIO--(Marketwire - March 30, 2010) - SelectCore Ltd. (TSX VENTURE:SCG) (the "Company") announced today that it has entered into a debt financing arrangement for up to US$5,000,000 with Comvest Capital II, L.P. ("Comvest").

The financing consists of a revolving line of credit of up to US$2,500,000 and a US$2,500,000 term loan. Both facilities mature in 36 months. The revolving credit line bears an interest rate equal to the greater of prime plus 3% or 9% per annum while the term loan bears an interest rate of 12.5% per annum. At Comvest's option, it may convert up to US$1,000,000 of the term loan into common shares ("Common Shares") of the Company at a price of CDN$0.20 per share. The applicable Canadian-US dollar exchange rate in effect on the date of Comvest's applicable conversion notice will be used to determine the actual number of Common Shares to be issued in respect of such conversion. The financing is secured by a first lien on the Company's assets and those of its subsidiaries.

In connection with the financing, the Company has issued Comvest 4,000,000 bonus Common Shares (the "Bonus Shares") and paid Comvest closing/bonus cash fees of an aggregate of US$390,000. In addition, Comvest has acquired 5,809,523 outstanding Common Shares (the "Purchased Shares" and together with the Bonus Shares, the "Comvest Shares") currently held by the existing lender to the Company. The Bonus Shares and any Common Shares issuable upon conversion of the term note will be subject to a hold period ending July 30, 2010.

Among the other terms of the loan facility, Comvest has the option to require the Company, subject to compliance with applicable Canadian and/or United States securities laws, to repurchase any or all of the Comvest Shares at a price of CDN$0.14 per share (the "Repurchase Price"). However, if the Company is unable, pursuant to applicable Canadian and/or United States securities laws, to repurchase the Comvest Shares, Comvest may sell such shares to one or more purchasers (each a "Third Party Sale"). In the event that the sale price for the Comvest Shares received pursuant to a Third Party Sale (the "Third Party Sale Price") is less than the Repurchase Price, the Company shall pay Comvest an amount equal to the difference between the Repurchase Price and the Third Party Sale Price. Comvest may exercise this right on the maturity date of the revolving credit line (March 31, 2013) or such earlier time as the obligations under the loan agreement are prepaid or required to be prepaid.

In addition, the loan agreement with Comvest requires that the Company obtain Comvest's consent in order to issue any equity securities (or any rights or securities exercisable, convertible or exchangeable for any such equity securities) at a price less than CDN$0.10 per Common Share (other than pursuant to certain previously issued securities or rights) while any obligations to Comvest are outstanding pursuant to the loan agreement.

The net proceeds of the financing will be used to retire the Company's existing US$2,500,000 debt facility early and pay off certain accounts payable and otherwise for working capital and other general corporate purposes.

Keith McKenzie, CEO of SelectCore commented, "We are very pleased to have partnered with Comvest and feel we have chosen the right partner to help finance the Company's growth."

About SelectCore:

SelectCore provides prepaid telecom, prepaid financial and transaction-based POSA (point of sale activation) solutions utilizing its own network infrastructure and proprietary technology. SelectCore connects its customers with prepaid products and services through its nation-wide distribution channel of thousands of retail convenience and grocery store locations. Profit 100 ranked SelectCore as one of Canada's fastest-growing companies in 2006 and again in 2007.

About ComVest:

The ComVest Group is a leading private investment firm focused on providing debt and equity solutions to lower middle-market companies with enterprise values of less than US$350 million. Since 1988, The ComVest Group has invested more than US$2 billion of capital in over 200 public and private companies worldwide.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the Company's debt financing arrangement with Comvest and the Company's future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "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", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks related to market and financing conditions as well as risks associated with the prepaid telecom, prepaid financial and transaction-based point of sale activation industries, changes in project parameters as plans continue to be refined as well as those risk factors discussed in the Company's management's discussion and analysis for the period ended September 30, 2009, available on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information contained herein, except in accordance with applicable securities laws.

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

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