SEB ANNOUNCES CLOSING OF UNIT OFFERING

December 4, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it has closed a unit offering (the “Offering”) for aggregate gross proceeds of $1,883,900.

Proceeds were raised through the issuance of 8,970,952 units (each a “Unit”) at a price of $0.21 per Unit.  Each Unit consists of one common share of the Company (each a “Common Share”) and one-half transferable common share purchase warrant of the Company (each whole such warrant, a “Warrant”).  Each Warrant is exercisable into one Common Share of the Company at a price of $0.30 per share and has a term of 18 months from the date of issuance.

Finders that introduced subscribers to the Offering were issued Common Shares equal to 7% of the number of Units issued to such subscribers, as well as finder warrants (each a “Finder Warrant”) equal to 7% of the number of Units issued to such subscribers. Finders were issued an aggregate of 292,633 Common Shares and 292,633 Finder Warrants. Each Finder Warrant is exercisable into one Unit at $0.30 per Unit for a period of 18 months from closing.

All securities issued in connection with the Offering will be subject to a four-month hold period.  The hold periods will expire for the first tranche closing, on March 30, 2018; and for the second tranche closing, on March 31, 2018.

Proceeds of the Offering will be used for repayment of debt and general working capital purposes.

About SEB

SEB is a technology company providing Business Process Automation and Outsourcing software, solutions and services to a national and global client base. SEB has a specialty growth focus in cloud enabled SaaS processing solutions for managing employer and government sponsored health benefit plans on a BPO (Business Processing Outsourcing) business model, globally. SEB currently serves corporate and government clients across Canada and internationally. Over 80% of SEB’s revenues derive from government, insurance and health care organizations. SEB’s technology infrastructure of over 860 multi-certified technical professionals, across Canada and globally, is a critical competitive advantage in supporting the implementation and management of SEB’s benefits processing solutions into client environments. SEB’s Benefits Processing Solutions can be game changing for SEB clients.

The core expertise of SEB is automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s client acquisition model in benefits processing is “Channel Partnerships” where SEB processing solutions both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered on a SaaS platform. SEB solutions turn cost centers to profit centers for our Channel Partners.

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.

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

Forward Looking Information

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

MEDIA AND INVESTOR CONTACT:

John McKimm
President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

SaaS solutions specialist Smart Employee Benefits on cusp of earnings turnaround

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Proactive Investors – SEB Company Profile

SEB REPORTS RESULTS FOR THIRD QUARTER, 2017 and Schedules Conference Call

SEB REPORTS RESULTS FOR THIRD quarter, 2017

and Schedules Conference Call

October 30, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) has made significant progress during fiscal 2017, as follows:

  1. Aon Transaction—-The Company closed the acquisition of the Aon Hewitt Inc. (“Aon”) mid market health benefits administration business in Canada and structured a strategic sales and marketing alliance with Aon.  Aon is one of the largest benefit consulting companies in the world operating in over 100 countries.
  2. Debt Financing—SEB closed $22.5M of debt facilities with a major Canadian Bank. These financings converted short term debt issued or assumed in the course of making acquisitions to longer terms of four to five years.  This improved the Company’s working capital ratio and is expected to save over $1.5M annually in interest and financing charges.
  3. Equity Financing—The Company has closed approximately $9.1M of new equity since the beginning of November 2016, with over 70% from insiders and existing shareholders, including over 30% from the CEO and companies related to the CEO.
  4. U.S. Joint Venture—In October, the Company executed a letter of intent to enter into a joint-venture agreement with NeST Technology Ltd., a US technology company. The intent of the venture is to form a new company, owned 50% by SEB and 50% by NeST, which will provide back-office processing and administration services for Third Party Administrators and Professional Employer Organizations in the USA. Concurrent with the signing of the joint venture agreement, NeST invested $960,000 into an SEB equity financing.
  5. Cost Reductions—the Company has reduced annual costs by over $5.5M going forward, through a combination of $2M in integration programs in the Technology Division, $2M post-transition reductions in the Aon business operating infrastructure, and $1.5M in Interest and Financing costs through debt consolidation. The majority of these savings will be realized beginning fiscal 2018.

The above transactions strengthen the Company’s balance sheet and position SEB for strong growth going into the future.  The Company expects to generate in excess of $100.0M of sales for fiscal 2017 and currently has more than $500.0M of backlog, renewal and option year contracts with over 200 clients. The Company continued during the quarter to invest in its Benefits Division, with the largest investments (all costs expensed) being the transition of the Aon business, approximately $330,000 invested in the Health & Wellness platform and over $200,000 in sales and marketing initiatives for Benefits. The Company currently has over 20 white-label and joint-venture Benefits transactions in progress, representing several million plan members in Canada, the U.S.A and in the Middle East.

CONSOLIDATED RESULTS of the QUARTER        

  1. Consolidated Revenue from Continuing Operations – was $26.5M versus $24.4M the previous year. The $2.1M increase in revenue results primarily from the Benefits Division. The Technology Division was consistent with the previous year. Typically the third quarter is the weakest for the Technology Division, primarily due to summer vacations.
  2. Consolidated Gross Margin – was $7.6M for the quarter, up from $4.3M the previous year. As a percent of revenue, consolidated gross margin was 28.5% in Q3/17 versus 17.5% in Q3/16. This is due to growth of the Benefits Division. Gross margin percentage in the Technology Division also improved to 20.1% in Q3/17 versus 16.9% in Q3/16. Continued improvement is expected going forward in the gross margin of both the Benefits Division and the Technology Division.
  3. Salaries and Other Compensation –  costs were 19.5% of sales in Q3/17, versus 15.4% in Q2/17 and 8.0% in Q3/16. This cost structure increased largely due to additional employee staff in the Benefits Division and additional sales and marketing efforts in Technology Division. This cost structure is highly scalable and is expected to reduce back to previous levels as sales grow in the Benefits Division. The Technology Division has fewer employees and more contractors. Contractors costs are in cost of sales.
  4. Office and General Expenses – were 5.8% of sales in Q3/17, down from 6.2% in Q2/17 but up from 4.6% in Q3/16. This expense ratio is highly scalable and is expected to improve as sales grow and with the Aon business being fully transitioned as of August 31, 2017.
  5. Professional Fees –  were 2.0% of sales in Q3/17 up from 1.5% of sales in Q3/16 and down from 2.6% in Q2/17. These cost ratios are expected to remain in this general vicinity for the near future.
  6. Operating Income Prior to Non-Cash expenses- was $318,923 in Q3/17 versus $811,502 in Q3/16 and $749,029 for Q2/17. Operating income was reduced primarily due to the combination of extra costs required to transition the Aon business, the duplication of operating costs for the Aon business and the investment in the Health and Wellness platform, all of which was expensed.
  7. Interest and Financing Fees- were $685,820 for Q3/17 versus $693,908 for Q3/16 and $1,120,826 for Q2/17. The Bank Financing which closed April 20, 2017 has been a significant portion of this reduction.
  8. Non-cash expense –  consisting of amortization, depreciation and shared based compensation was relatively flat in both dollar amounts and as a percentage of sales. Amortization attributable to acquisitions is the largest component representing over 94% of non-cash expenses. The majority of these costs will be fully amortized by fiscal 2019.
  9. Transition Cost for Aon Transaction – were $1,735,564 in Q3/17. These costs are related to the Aon transaction and are one-time. The transition period ended as of August 31, 2017 so further costs of this nature are not expected.
  10. Transaction costs – in Q3/17 were $226,564, down from $558,153 in Q3/16 and $925,646 in Q2/17. These costs are driven by transaction activity during the quarter and are not related to the operating results.
  11. The Company reported Net Loss – of $3.8M for Q3/17 versus $1.8M for Q3/16 and $3.2M in Q2/17. Approximately $1.2M of these losses are related to non-cash expenses, primarily amortization and deprecation. The Aon one time transition costs were $1.7M. One time transaction costs (legal and accounting) associated with equity financings and other transactions were $0.2M.

 

DIVISIONAL PERFORMANCE

  1. The Technology Division revenue was $23.6M for the quarter versus $24.6M the previous quarter. The change is largely due to seasonal slowness. Operating income was $1.9M versus $1.7M the previous quarter, primarily due to gross margin improvements, which are expected to continue.
  2. The Benefits Division revenue was $3.0M for the quarter versus $2.3M the previous quarter, largely due to the Aon acquisition being in place for the full quarter. Operating results for the quarter was a loss of $0.9M versus $0.05M the previous quarter.

As part of the acquisition of the Aon benefits business, SEB agree to pay one-time Transition Fees while it built the infrastructure necessary to manage the business. The total fees for the quarter were recorded as “Transition costs” at $1.79M. The transition was completed as planned on August 31, at which point no further fees are expected.

  1. The Corporate Division reported an operating loss of $0.7M, down from a loss of $1.2M the previous quarter, the largest decrease arising from reduced professional costs related to the equity and debt financing.

THE AON TRANSACTION

The acquisition of Aon’s mid-market health benefits administration business in Canada represents 48 clients, many with globally recognized brands, with over 250,000 plan members. As a part of this transaction SEB added several complementary technology platforms and approximately 160 employees across Canada and India. The Agreement also included a strategic business relationship with Aon Hewitt where SEB’s technology solutions enable future business initiatives.

States John McKimm, President /CEO/CIO of SEB, “The Aon Transaction adds both long-term clients to SEB’s benefits administrations business, and a strategic relationship with one of the largest benefits consulting organizations in the world. A further positive is the ‘Flex Plus’ administration platform and other technology applications, which SEB believes to be one of the most comprehensive ‘Flex Systems’ in the market place. “

  1. SEB has made over $20.0M of investment during the past five years in its health benefits processing solutions. The “Flex Plus” platform enhances SEB’s Processing Solutions capabilities. SEB has enhanced the functionality of “Flex-Plus” with additional capability from its own administration solutions and believes it has one of the most comprehensive and user-friendly multi-employer flex systems in the market place.
  2. Today SEB provides fully automated processing of health benefits plans including Administration Solutions (Traditional or Flex), Adjudication, Claim Payment, Billing, Real Time Reporting, Analytics and Fraud Analytics. SEB offers Total Integrated Processing Functionality on a “White-Label joint venture” basis on a Channel Partner business model. SEB solutions, among other capability, includes custom preferred provider networks, portals custom EDI capability, PBM (pharmacy benefit management) functionality, new products portal which automates the application and underwriting process for new insurance products reducing approval terms to minutes from months, white-labelled benefit cards, integrated disability management, portal automating the case management process, health and wellness anticipated solutions, health spending account, etc. SEB benefits processing Solutions are unique in that it provides fully automated processing for “All Benefits Types, One Processing Environment- One Benefit Card”. SEB solutions allow “Convergence” of processing in a world where disaggregation is the norm. The technology solutions acquired from Aon enhance SEB’s total processing capabilities.

SEB also provides a nationally focused fully bilingual Contact Centre based in Montreal with the leading contact center software in the industry today.

An average employee benefit plan costs approximately $3,000 per employee per annum. Typical processing fees account for approximately 10% of this premium. SEB’s fully integrated processing solutions capture over 90% of these processing services. Currently SEB has over 300,000 plan members operating on one or more of its processing solutions, representing over $1Billion of premium. SEB’s “Convergence Strategy” is to transition the clients over time to “One Processing Environment”, increasing its % of the processing fees. All SEB benefits processing solutions are fully supported and managed by over 900 full time contractors and personnel across Canada and globally.

DEBT FINANCING of $22.5M

1.   The new financing arrangements with a major Canadian bank consist of an operating demand facility of up to $12.0M, a demand $5.5M term loan facility with repayment amortized over four years (the “Senior Term Facility”) and a $5.0M subordinated term loan facility (the “Junior Term Facility”). The Senior Term Facility has interest terms consistent with fully secured senior debt. The Junior Term Facility is a five year, subordinated term facility with the mezzanine arm of the bank with monthly interest only and a balloon payment at the end of the term. The Junior Term Facility has interest terms consistent with secured subordinate debt facilities.

The new credit facilities consolidate and replace the aggregate $4.8M of credit facilities that the Company’s wholly owned Technology Division subsidiaries had with the same major Canadian bank, as well as the Company’s asset-based credit facilities of $12.5M with a major international Asset Based Lender (ABL).  The new credit facilities also repay the term debt of Maplesoft Group Inc. (a wholly owned subsidiary of the Company) and repay select convertible notes at the public company level. States John McKimm President/CEO/CIO, “the new credit facilities are expected to significantly reduce interest costs and reduce SEB’s balance sheet risk.”

EQUITY FINANCING

  1. The Company has closed (in several tranches) equity financings since the beginning of November 2016 totaling $9.1M. In total 49,547,165 shares and 29,801,540 warrants were issued. Insiders and existing shareholders acquired over 70% of this equity financing.

CONFERENCE CALL DETAILS

Date/Time: Friday, November 3, 2017 at 11:30 AM ET.

Canada & USA Toll Free Dial In: 1-800-319-4610

Toronto Toll Dial In: 1-416-915-3239

Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call. 

Webcast Link: access at http://services.choruscall.ca/links/seb20171103.html

Conference Call Replay

Canada & USA Toll Free: 1-855-669-9658
Outside Canada & USA Call: 1-604-674-8052
Code: 1832 followed by the # sign

Replay Duration: Available for one week until end of day November 10, 2017.

About SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on offering SaaS and BPO solutions in the Health Benefits Sector to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments. Benefits Processing is a high-growth specialty practice area.

The core expertise of both divisions is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships.

For further information about SEB, please visit www.seb-inc.com.

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.

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACT:

John McKimm
President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

SEB CLOSES A $2,000,000 SHARE OFFERING

October 11, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it has closed a $2,000,000 common share equity offering (the “Offering”).

Aggregate proceeds of $2,000,000 were raised through the issuance of 12,500,000 common shares of the Company (each a “Common Share”) at a price of $0.16 per Common Share.

Finders that introduced subscribers to the Offering were issued Common Shares equal to 7% of the number of Common Shares issued to such subscribers, as well as finder warrants equal to 7% of the number of Common Shares issued to such subscribers. Finders were issued 411,250 Common Shares and finder warrants. Each finder warrant is exercisable into one Common Share of the Company at $0.20 per Common Share for a period of 18 months from closing.

All securities issued in connection with the Offering will be subject to a four-month hold period. The hold periods will expire as follows: for the first tranche, expiry on February 4, 2018; for the second tranche, expiry on February 7, 2018; and for the third tranche, expiry on February 11, 2018.

Further to the Company’s press release on October 2, 2017, NeST Group, through a controlled Investment Company, has completed an equity investment of $960,000 for 6,000,000 Common Shares as part of the Offering.

States John McKimm, President/CEO/CIO of SEB, “SEB has made substantial progress in the past 12 months and is well positioned for growth going forward:

  • Sales¬ – Are anticipated to exceed $110M for fiscal 2017, up approximately 15% from fiscal 2016.
  • Equity Financing - Approximately $9.2M has been raised in the past year, over 80% subscribed for by existing shareholders, insiders and strategic partners.
  • Debt Financing - Short term debt was consolidated and termed out in April 2017 with a $22.5M financing from a major Canadian bank, resulting in interest savings of over $1.5M per annum.
  • Backlog, Evergreen and Option Year Contracts - Are in excess of $500.0M with approximately $440M in Technology-Non Benefits (“TNB”) and over $60.0M in Technology-Benefits Processing (“TBP”).
  • Annuity Revenue – Over 90% of SEB revenues are from annuity client relationships.
  • Benefits Business Unit - Over 300,000 plan members are managed on one or more of SEB’s five core health benefit processing solutions. The Aon transaction, which closed in April 2017, added over 250,000 plan members to SEB’s benefits processing, added technology and an infrastructure of approximately 160 people in Montreal, Toronto and India. Since closing, SEB has added five new national clients and multiple “Channel Partner” relationships with consulting and sales organizations and insurers across Canada, including Aon.
  • Cost Savings - Cash expenses and cost structure have been reduced by over $5.5M (including interest charges) with the majority of these savings being fully realized in fiscal 2018.
  • Positive EBITDA - Fiscal 2016 was the first year of positive EBITDA, after adjustments for one-time costs. Significant growth of EBITDA is forecasted for fiscal 2017 and beyond, resulting from cost savings and organic growth initiatives. Both TNB and TBP business units are now expected to be cash flow positive. TNB is a stable business with a healthy growth profile and TBP is expected to be cash flow positive for the first time in the 4th Quarter, Fiscal 2017. Previous years’ EBITDA have been negative due to SEB’s heavy investment in its benefits processing solutions and infrastructure. TBP is the focus of future growth with profit margins typical of a SaaS business model. Gross margins in TBP are expected to be in excess of 70%. Profitability scales quickly once the fixed cost structure is covered.
  • NeST Joint Venture – SEB has signed a Joint Venture (“JV”) with NeST to develop the USA marketplace as a back-office service provider to TPAs (Third Party Administrators) and PEOs (Professional Employer Organizations). Pursuant to this JV, SEB will receive a license fee of US$2.25M, paid over time from the JV and NeST will provide the working capital for growth. SEB will service the JV, largely from Canada and India. The JV will be focused on sales and marketing. SEB has invested tens of millions of dollars in software and infrastructure for Benefits Processing and this JV will expedite the returns on this investment.

 

Going forward, SEB has a strong base from which to execute a growth strategy in both Canada and the U.S. The equity and debt financing has improved the strength of the balance sheet. The TBP “Channel Partner” strategy is driving strong organic growth. The TNB has a stable history of profitability and growth. The JV with NeST funds the growth in the USA. SEB is forecasting no major capital expenditure programs and its infrastructure is very scalable. Additionally, SEB anticipates being largely free of term debt by 2019 with a healthy growing cash flow profile.”

About SEB 
Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating business units: Technology Non-Benefits (“TNB”) and Benefits Processing (“BP”). The TNB currently serves corporate and government clients across Canada and internationally. The BP focuses on offering SaaS and BPO solutions in the Benefits Processing Sector to corporate and government clients, globally. The BP business operates as a client of the TNB. The TNB is a critical competitive advantage in supporting the implementation and management of SEB’s benefits processing solutions into client environments. BP is a high-growth specialty practice area where SEB solutions can be game changing for the client.

The core expertise of both business units is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s business model in the BP is “Channel Partnerships” where SEB processing solutions enable business process efficiencies which both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered in a SaaS environment.

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.

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

Forward Looking Information 
The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

MEDIA AND INVESTOR CONTACT:
John McKimm
President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

SEB SIGNS JV WITH USA TECHNOLOGY PARTNER

October 2, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) has executed a Letter of Agreement (“LOA”) with NeST Technology Corp. (“NeST”) based in Virginia, USA.  As part of the agreement NeST has also agreed to invest in SEB.

NeST Technologies, part of the US$200M NeST Group, is a global enterprise specializing in providing software, services and solutions to customers from diverse verticals like Aerospace, Banking, Financial Services, Insurance, Healthcare, Utilities and Manufacturing. Further information can be found at www.nestgroup.net and www.nesttech.com .

NeST, like SEB, has multiple partnerships and certifications for various technology platforms, including Microsoft, Oracle, open source and legacy (mainframe).

NeST and SEB have recognized that there are synergies beyond the benefits processing business of the JV that the parties are committed to explore to further enhance market opportunity and shareholder value.

Pursuant to this LOA, SEB and NeST have agreed to the following:

  • 1.     JOINT VENTURE (“JV”) TO DEVELOP BENEFITS PROCESSING BUSINESS IN USA

✓   SEB and Nest will incorporate a new company (“JV Company”) in the USA. The JV Company will be owned 50% by NeST and 50% by SEB.

✓   SEB will license it’s benefit processing solutions to the JV company, providing an exclusive license for Third Party Administrators (TPA’s) and Professional Employer Organizations (PEO’s) and a non-exclusive license for other US market segments.

✓   SEB will receive a license fee of $US2,250,000 of which it will capitalize $US250,000 for 50% equity in the new venture: the balance of $2,000,000 is to be paid over time from the cash flow of the JV Company.

✓   NeST will commit capital of up to US$2.25M of which it will capitalize $US250,000 and $2.0M will be advanced as shareholder loans to fund operations. The loans will be repaid over time from the cash flow of the JV Company. The terms of the shareholder loans are being finalized.

✓   The JV will deploy the same “Channel Partners” strategy in its client acquisition business model as SEB does in Canada.

  • 2.     EQUITY INVESTMENT IN SEB

✓   NeST will make an equity investment in SEB of CDN$960,000 at $0.16 per share for a total of 6,000,000 shares.

✓   The NeST investment is part of a larger SEB equity offering of up to $2,000,000 at $0.16 per share for a total of 12,500,000 shares.

✓   All securities issued in connection with this $2,000,000 offering will be subject to a four month hold period. It is expected that the offering will close in the next week.

States Dr. Javed Hassan, Chairman and owner of NeST Group, “The NeST Group has a long history of supplying software, solutions and services to the health care and insurance industry in the US and globally.  We have been in discussions with SEB for a number of months and are pleased to have reached agreement to bring SEB’s platform and proven solutions to the US where we see significant opportunities and a fast track business model for quickly becoming a significant technology back office processing partner in the multi-billion dollar PEO and TPA market. This is a sector where SEB solutions can add substantial value in both cost reduction, through enhanced automation of business processes, and new revenue opportunities. In addition, we see significant synergies between our companies and look forward to working together with John McKimm and his management team in this JV and exploring further opportunities”.

 

States John McKimm, President/CEO/CIO of SEB, “We are pleased to partner with Dr. Hassan and The NeST Group, both in the USA “Joint Venture” and in Dr. Hassan’s interest in becoming a material shareholder of SEB. Dr. Hassan and his executive team in the U.S. and globally have an envious record of success on a global basis. NeST and SEB have engaged a President/CEO for the USA Joint Venture and are moving ahead to launch the JV in early October, 2017. SEB Benefits Processing Solutions have applicability beyond Canada, both in the USA marketplace and globally. Dr. Hassan has been a visionary in building and implementing leading technology solutions in his professional life, as a senior executive of several of the world’s largest technology companies and as Chairman/Founder of The NeST Group, (in 1998). The NeST Group is a conglomerate of over 25 companies globally with over 4,000 employees. We are privileged to have Dr. Hassan and The NeST Group as our “strategic go to market” partner in the USA. Additionally, there are multiple other synergies between NeST and SEB, which should prove very positive for both entities”.

 

About SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating business units: Technology Non-Benefits (“TNB”) and Benefits Processing (“BP”). The TNB currently serves corporate and government clients across Canada and internationally. The BP focuses on offering SaaS and BPO solutions in the Benefits Processing Sector to corporate and government clients, globally. The BP business operates as a client of the TNB. The TNB is a critical competitive advantage in supporting the implementation and management of SEB’s benefits processing solutions into client environments. BP is a high-growth specialty practice area where SEB solutions can be game changing for the client. Today, over 300,000 employees of SEB clients are being managed on one or more of SEB’s five benefits processing platforms.

The core expertise of both business units is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s business model in the BP is “Channel Partnerships” where SEB processing solutions enable business process efficiencies which both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered as SaaS environment.

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.

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

Forward Looking Information

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, including statements regarding the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

MEDIA AND INVESTOR CONTACT:

John McKimm
President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

Smart Employee Benefits, a SaaS technology company poised for major growth

Click here to read more.

SEB REPORTS RESULTS FOR SECOND QUARTER, 2017 Corporate Update and Schedules Conference Call

July 31, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) has made significant progress during the first six months of fiscal 2017. States John McKimm, President/CEO/CIO of SEB, “The Company is currently tracking sales in the $110.0M range and has in excess of $500.0M of backlog, renewal and option year contracts with over 200 active clients. The Benefits Processing book of business has grown significantly. Benefits Processing sales are now tracking in excess of $12.0M up from $1.8M in fiscal 2016. The below transactions, which closed during the second quarter, have strengthened the Company’s balance sheet and positioned SEB for strong growth in the remainder of fiscal 2017 and into fiscal 2018.”

 Key transactions closed include the following:

Aon Transaction—-The Company closed the acquisition of the Aon Hewitt Inc. (“Aon”) mid market health benefits administration business in Canada and structured a strategic sales and marketing alliance with Aon.  Aon is one of the largest benefit consulting companies in the world operating in over 100 countries. This transaction added 48 corporate clients and over 250,000 plan members plus technology which broadened SEB’s benefits processing capabilities.

Debt Financing—SEB closed $22.5M of debt facilities with a major Canadian Bank. These financings convert short term debt issued or assumed in the course of acquisitions to longer terms of four to five years.  This improves the Company’s working capital ratio and is expected to save over $1.5M annually in interest and financing charges.

Equity Financing—The Company closed approximately $7.2M of new equity since November, 2016 of which the President/CEO/CIO and companies related subscribed for over 40%. This equity was used to reduce debt and increase working capital.

CONSOLIDATED RESULTS OF THE QUARTER ENDING MAY 31, 2017 (“Q2/17”)

The Company’s detailed financial results can be found at www.sedar.com. An analysis of these results includes:

  • 1.     Consolidated Revenue from Continuing Operations – was $26.9M versus $25.1M the previous year and $23.1M in Q1/17. Consolidated revenue grew 16.1% in Q2/17 over Q1/17. Technology Non-Benefits revenue grew 8.5% in Q2/17 over Q1/17. Benefits Processing revenue grew to $2.252M from $0.454M in Q1/17. Benefits Processing Revenue, on a monthly run rate, is now in excess of $12.0M annualized. Consolidated annual sales are tracking in excess of $110.0M.
  • 2.     Consolidated Gross Margin – was $7.3M for the quarter, up from $4.7M the previous year and $3.7M in Q1/17. As a percent of revenue, consolidated gross margin was 27.0% in Q2/17 versus 16.1% in Q1/17 and 18.8% in Q2/16. This is due to growth in both Benefits Processing and Technology Non-Benefits margins. Gross margin percentages in Technology Non-Benefits was 21.0% in Q2/17 versus 15.3% in Q1/17. Continued sustainable gross margin growth is expected in subsequent quarters. Today, over 46% of every gross margin dollar goes to EBITDA, up from 29% in fiscal 2015.
  • 3.     Salaries and Other Compensation –  costs were 15.1% of sales in Q2/17, versus 8.9% in Q1/17 and 9.6% in Q2/16. This cost structure increased largely due to additional staff in the Benefits Processing business and additional sales and marketing efforts in Technology Non-Benefits. This cost structure is highly scalable. It will not increase materially in either business unit as sales grow. The Technology Non-Benefits costs have fewer employees and more contractors. Contractors’ costs are recorded in cost of sales. Benefits Processing is primarily employees with very few contractors. Employee costs are recorded below Gross Margin.
  • 4.     Office and General Expenses – were 6.2% of sales in Q2/17, up from 4.9% in Q1/17 and 4.5% in Q2/16. The increase is due to additional real estate costs tied to the Aon transaction. We now have additional office space in Montreal, Toronto and India. This expense is highly scalable. It will not increase materially as sales grow.
  • 5.     Professional Fees –  were 1.8% of sales in Q2/17 up from 0.8% of sales in Q2/16 and 2.0% in Q1/17. The increase in costs is one time and largely tied to costs associated with the new bank financing, the equity issues and the Aon transaction. We are expecting a reduction of over $600,000 in these costs the second half.
  • 6.     Operating Income Prior to Non-Cash expenses- was $749,029 in Q2/17 versus $994,427 in Q2/16 and $59,453 for Q1/17. Operating income was impacted primarily due to the one time professional costs (noted above), the increase in compensation, office and general costs tied to Aon transaction.
  • 7.     Interest and Financing Fees- were $648,839 for Q2/17 versus $693,417 for Q2/16 and $502,087 in Q1/17. The Bank Financing which closed April 30, 2017 will reduce these charges by over $350,000 per quarter going forward.
  • 8.     Non-cash Expense –  consisting of amortization, depreciation and share based compensation was relatively flat in both dollar amounts and as a percentage of sales. Amortization attributable to acquisitions is the largest component representing over 85% of non-cash expenses. The majority of these costs will be fully amortized by fiscal 2019 and no longer have an impact on net income. Currently, they affect net income by over $5.0M per annum.
  • 9.     Transition Costs for Aon Transaction – were $0.98M in Q2/17. These costs are related to the Aon transaction and are one time. Transition costs will continue to be recorded in the third quarter ending August 31, 2017. These costs are non-recurring and will be totally expensed by the end of Q3/17 (August 31). The transition cost budget for the Aon transaction is $1.84M. We expect actuals to be within 5% of budget.
  • 10.  Transaction Costs – in Q2/17 were $925,646 up from $295,967 in Q2/16. Over 85% of these costs are tied to the equity financing, the Bank financing and closing the Aon transaction and are one time.
  • 11.  The Company Reported Net Loss– of $3.2M for Q2/17 versus $2.2M for Q1/17 and $1.25M in Q2/16. Approximately $1.34M of these losses are related to non-cash expenses, primarily amortization and deprecation. The Aon one time transition costs for Q2/17 were $0.98M. One time transaction costs (legal and accounting) associated with equity financings, the major bank debt financing and the Aon transaction were $925,646.

These costs accounted for the majority of the loss. Financial performance in the second half of fiscal 2017 is expected to significantly improve due to the permanent reductions of $2.0M of cost structure on Technology Non-Benefits, the completion of the $1.84M of the one-time Aon transition costs, the reduction of $1.5M, annually, in interest charges, the reduction in professional fees of at least $600,000 in the second half of fiscal 2017 and the continued growth of gross margin and revenue.

DIVISIONAL PERFORMANCE – STEADY IMPROVEMENT

  • 1.     The Technology Division revenue was $24.6M for the quarter versus $22.7M the previous quarter. The change is largely due to seasonal improvements offset by weakness in the Western Canada market. Operating income was $1.7M versus $0.9M the previous quarter.
  • 2.     The Benefits Division revenue was $2.3M for the quarter versus $0.5M the previous quarter, largely due to the Aon acquisition. Operating results for the quarter was a loss of $0.05M versus a loss of $0.5M the previous quarter.  The Aon transition is forecast to be significantly profitable by September, 2017 once the transition is complete. As part of the acquisition of the Aon benefits business, SEB agreed to pay one-time Transition Fees while it built the infrastructure necessary to manage the business. The total fees for the months of April and May were recorded as “Transition costs” at $0.98M. The Canadian transition was completed as planned on June 30. The transition for the India operations is expected to be completed on August 31, at which point no further fees are expected. The costs savings, post transition, is expected to exceed $1.5M per annum.
  • 3.     The Corporate Division reported an operating loss of $.98M, up from a loss of $0.4M the previous quarter; the largest items being increased one time professional costs related to the equity and debt financing and closing the Aon transaction.
  • 4.     Permanent cost savings in the Technology Non-Benefits is in the $2.0M per annum range over the past 15 months. Interest cost savings are in excess of $1.5M per annum due to the bank financing and the equity raises. The majority of these savings will be evident in financial results going forward. Additionally, the full transition of Aon business to the SEB infrastructure will generate in excess of another $1.5M of permanent cost savings. Over half of these cost savings resulted as of July 1, 2017. The remainder will be completed by August 31, 2017.

THE AON TRANSACTION POSTIONS SEB AS A MATERIAL PROVIDER OF BENEFITS PROCESSING SOLUTIONS

The acquisition of Aon’s mid-market health benefits administration business in Canada represents 48 clients, many with globally recognized brands, with over 250,000 plan members. As a part of this transaction SEB added several complementary technology platforms and approximately 160 employees across Canada and India. The Agreement also included a strategic business relationship with Aon Hewitt where SEB’s technology solutions enable future business development initiatives.

States John McKimm, President /CEO/CIO of SEB, “The Aon Transaction adds not only long term client relationships to SEB’s Benefits Processing business, it also adds a strategic relationship with one of the largest benefits consulting organizations in the world. A further positive is the “Flex-Plus” administration platform and other technology applications, SEB believes “Flex-Plus” to be the most comprehensive, user friendly and easily customizable “Flex Systems” in the market place today.”

“SEB has made over $20.0M of investment during the past five years in its health benefits processing solutions. The “Flex-Plus” platform and other solutions acquired from Aon, materially, enhance SEB’s processing solutions capabilities. SEB has added to the functionality of “Flex-Plus” with additional capability from its own administration solutions.”

Today SEB provides fully automated processing of health benefits plans including Administration Solutions (Traditional or Flex), Adjudication, Claims Payment, Billing, Real Time Reporting, Analytics and Fraud Analytics. SEB offers Total Integrated Processing Functionality on a “White-Label Joint Venture” basis per a Channel Partner business model. SEB solutions, among other capability, includes custom preferred provider networks, custom EDI capability, PBM (pharmacy benefit management) functionality, a new products on-line portal solution which automates the application and underwriting process for new insurance products reducing approval terms to minutes from months, white-label benefit cards, an integrated disability management portal automating the case management process, health & wellness automated solutions, health spending accounts, etc. SEB also provides a nationally focused fully bilingual Contact Centre based in Montreal with the leading contact center software in the industry today. This is very scalable infrastructure. SEB benefits processing solutions are unique in that they provide fully automated processing for “All Benefits Types in One Processing Environment on One Benefit Card”.

SEB solutions allow “Convergence” of benefits processing including “Single Sign On”, in a world where disaggregation is the norm. An average employee benefit plan costs approximately $3000 per employee per annum. Processing fees account for approximately 10% of these premiums. SEB’s fully integrated processing solutions provide over 90% of these processing services in “One Processing Environment”. Currently, SEB has over 300,000 plan members operating on one or more of its processing solutions. SEB’s objective is “Convergence”; to transition clients over time to “One Processing Environment”. This “Convergence” strategy significantly improves services to clients, allows clients real time information to make better cost decisions, allows real time fraud identification and analytics; essentially providing “One Processing Environment for All Benefit Types”. All SEB benefits processing solutions are fully supported and managed by over 900 full time employees and contractors across Canada and globally. The utilization of SEB’s fully integrated platform targets revenue in Canada in excess of $250.00 per plan member per annum. These are costs most clients are already spending among multiple processing environments. The “Convergence” resulting from SEB’s integrated processing environment is both highly cost effective and enhances functionality and value add for the client without increasing costs.

DEBT FINANCING OF $22.5M

The new financing arrangements with a major Canadian Bank consist of an operating demand facility of up to $12.0M, a loan $5.5M (now $5.1M outstanding) term loan facility with repayment amortized over four years (the “Senior Term Facility”) and a $5.0M subordinated term loan facility (the “Junior Term Facility”). The Senior Term Facility has interest terms consistent with fully secured senior debt. The Junior Term Facility is a five year, subordinated term facility with the mezzanine arm of the bank. It has monthly interest only and a balloon payment at the end of the term. The Junior Term Facility has interest terms consistent with secured subordinate debt facilities.

The new credit facilities consolidate and replace the aggregate $4.8M of credit facilities that the Company’s wholly owned Technology Division subsidiaries had with the same major Canadian bank, as well as the Company’s asset-based credit facilities of $12.5M with a major international Asset Based Lender (ABL).  The new credit facilities also repay short term acquisition debt at the subsidiary level and select short term notes at the public company level. States John McKimm President/CEO/CIO of SEB, “the new credit facilities reduce the Company’s interest charges by over $1.5M per annum and significantly improves debt service ratios which in the Technology Non-Benefits business is over 2.0 times with an adjusted EBITDA/Debt ratio of less than 3.0 times both ratios which contributed to the ability to secure senior bank financing.”

EQUITY FINANCING

The Company has closed (in several tranches) equity financings since November, 2016 totaling $7.2M. In total 37,528,165 shares and 26,691,540 warrants were issued. Most recently the Company announces, as part of the $7.2M equity raise, that it has closed today, $240,100 of new equity comprising 1,500,625 shares issued at $0.16 per share. Agents were paid 91,000 Finders’ Shares and 91,000 Brokers’ Warrants. The brokers’ warrants have a 24-month term and are exercisable at $0.20 per share during the term.

CONFERENCE CALL DETAILS

Date/Time: Wednesday, August 2nd at 11:30AM ET.

Canada & USA Toll Free Dial In: 1-800-319-4610

Toronto Toll Dial In: 1-416-915-3239

Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call. 

Webcast Link: access at http://services.choruscall.ca/links/seb20170802.html

Canada & USA Toll Free: 1-855-669-9658
Outside Canada & USA Call: 1-604-674-8052
Code: 1613 followed by the # sign

Replay Duration: Available for one week until end of day August 9, 2017.

About SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating business units: Technology Non-Benefits (“TNB”) and Benefits Processing (“BP”). The TNB currently serves corporate and government clients across Canada and internationally. The BP focuses on offering SaaS and BPO solutions in the Benefits Processing Sector to corporate and government clients globally. The BP business operates as a client of the TNB. The TNB is a critical competitive advantage in supporting the implementation and management of SEB’s benefits processing solutions into client environments. BP is a high-growth specialty practice area where SEB solutions can be game changing for the client.

The core expertise of both business units is data processing. Emphasis is on automating business processes utilizing SEB proprietary software solutions combined with solutions of third parties through joint ventures and partnerships. SEB’s business model in the BP is “Channel Partnerships” where SEB processing solutions enable business process efficiencies which both improve cost structures and enable new revenue models for Channel Partners and clients. All SEB solutions are cloud enabled and can be delivered as SaaS environment.

For further information about SEB, please visit www.seb-inc.com.

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.

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACT:

John McKimm
President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

 

NEW EQUITY FINANCING CLOSED FOR $969,200 – CORPORATE UPDATE

June 30, 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE: SEB) is pleased to provide the following corporate update.

Total Equity Raised
SEB has closed a total of $6,979,508 in equity over the past 8 months. Of this amount, $6,060,308 was a Unit Offering of one share and one warrant, where the warrant is exercisable at $0.30, for a period of 18 months. A share offering at $0.16 accounted for $919,200 of the remainder. This offering was a common share only.

Insiders were the largest subscribers for the equity, of which the CEO and entities related to the CEO, subscribed for over 40%.

Equity Unit Offering
SEB has closed the final tranche of its unit offering (the “Unit Offering”). Proceeds of $50,000 were closed on this final tranche. A total of 250,000 units (each a “Unit”) were issued at a price of $0.20 per Unit. Each Unit consisted of one common share of the Company and one transferable common share purchase warrant of the Company (a “Warrant”). Each Warrant was exercisable into one common share of the Company at a price of $0.30 per share and had a term of 18 months from the date of issuance.

Equity Share Only Offering
SEB has also closed $919,200 of its equity offering at $0.16 per share (the “Equity Offering”).

Aggregate proceeds of $919,200 have been raised in the Equity Offering for 5,745,000 common shares. Directors of the Company subscribed for $71,200 for a total of 445,000 common shares.

Finders that introduced subscribers to the Equity Share Offering were issued common shares equal to 7% of the number of common shares issued to such subscribers, as well as finder warrants equal to 7% of the number of common shares issued to such subscribers. Finders were issued 231,000 common shares and finder warrants. Each finder warrant is exercisable into one common share of the Company at $0.20 per common share for a period of 18 months from closing.

All securities issued in connection with the Unit Offering and the Share only Offering will be subject to a four-month hold periods.

Proceeds raised will be used for repayment of debt and working capital purposes.

Changes in the Board of Directors
The Company is pleased to announce that at its annual shareholder meeting held on May 30, 2017 two new directors were elected to the Board and one Board member moved to the Advisory Board.

Philip Armstrong
Mr. Armstrong founded and directed Altamira Investment Services Inc., which became one of Canada’s largest independent mutual fund providers until it was acquired by the National Bank in 2002. He founded and directed Jovian Capital, which focused on the establishment and

acquisition of companies dedicated to wealth management services, including Leon Frazer & Associates Inc., T.E. Investment Counsel Inc. and Rice Financial Group Inc., among others. Jovian was sold to Industrial Alliance Insurance and Financial Services Inc. of Quebec City in 2013, and at that time held a combined $14 billion in AUM and assets under administration.

Michael Pesner
Mr. Pesner is a CPA, CA and is President of Hermitage Canada Finance Inc., a Corporation that specializes in financial advisory services. Previously, Mr. Pesner was a Senior Partner in Financial Advisory Services at the Montreal offices of KMPG, prior to which he was National Executive, Corporate Recovery Partner at KMPG’s predecessor firm Thorne Ernst & Whinney. Mr. Pesner also serves on the Board of Directors of Quest Rare Minerals Ltd. and Le Château Inc.

Walter Simone
Mr. Simone is a founding shareholder of SEB and has been on the board since inception. He has now moved from the public Board of Directors to the Advisory Board, where he will be able to help the Company under a different setting. The Company thanks Mr. Simone for his contributions on the public Board and looks forward to his help as a member of the Advisory Board.

Issuance of Warrants on Acquisition of Payment Obligation
The Company has acquired an obligation to repay one of the creditors of Maplesoft Consulting Inc. (“Maplesoft”), an indirect subsidiary of the Company. An obligation to repay approximately $1,800,000 was acquired by the Company and cancelled by paying approximately $430,000 in cash and issuing a promissory note in the principal amount of $1,370,835 repayable in two years and bearing an interest rate of 10% per annum calculated and payable monthly (the “Promissory Note”).

In connection with this transaction, the creditor released its security over Maplesoft; and SEB issued 342,700 common share purchase warrants to such creditor with a term expiring on April 7, 2019 and exercisable at $0.30 each.

About SEB

Smart Employee Benefits Inc. is a technology solutions company. It’s core expertise is outsourcing and automating mission-critical business processes. Benefits processing and insurance solutions currently approximately 20% of sales, are a major growth focus of the company. Pursuant to multi-year annuity contracts, SEB provides proprietary software solutions and services, combined with solutions of third parties, through joint ventures and partnerships. All software and solutions are cloud-enabled and provided in a SaaS architecture. The company has over 900 people across Canada, the Middle East and India, with over $500 million of backlog, evergreen and option year contracts. Sales are tracking in excess of $100 million.

Joint ventures and channel partnerships together with RFP wins will be the dominant influences in driving future growth. Acquisitions have expedited past growth, but will be secondary going forward.

For further information about SEB, please visit www.seb-inc.com.

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, including statements regarding

the Company’s areas of focus, other than statements of historical facts, which address the Company’s expectations, should be considered as forward-looking statements and therefore subject to various risks and uncertainties. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”, “hope” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

Such forward-looking statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company’s control, actual results may differ materially from the expectations expressed in the forward-looking statements. Investors are cautioned not to put undue reliance on forward-looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, other than as required by applicable law.

Neither the 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.

MEDIA AND INVESTOR CONTACTS:

John McKimm President/CEO/CIO
Office (888) 939-8885 x 354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

SEB FAIT L’ACQUISITION DES ACTIVITÉS D’ADMINISTRATION DES PRESTATIONS DE SANTÉ ET DE BIEN-ÊTRE SUR LE MARCHÉ INTERMÉDIAIRE D’AON HEWITT AU CANADA

Le 3 avril 2017 – Mississauga, Ontario – Smart Employee Benefits Inc. (« SEB » ou la « Société ») (Bourse de croissance TSX : SEB) est un fournisseur de premier plan de logiciels, de solutions et de services qui assurent la gestion des infrastructures et des systèmes essentiels à la mission d’entreprises et d’administrations publiques. SEB est heureuse d’annoncer l’entente conclue avec Aon Hewitt Inc. (« Aon Hewitt ») le 31 mars 2017 en vue d’acquérir les activités d’administration des prestations de santé et de bien-être sur le marché intermédiaire d’Aon Hewitt au Canada (les « activités d’administration »). L’opération prévoit également une entente d’alliance stratégique avec Aon. Les activités d’administration regroupent 48 clients, dont bon nombre de marques connues à l’échelle mondiale, ce qui représente plus de 250 000 participants dans tout le Canada. Dans le cadre de l’opération, SEB acquiert plusieurs plates-formes technologiques complémentaires et ajoute environ 150 employés répartis partout au Canada et en Inde.

« Il s’agit d’une opération de référence pour l’expansion des activités de traitement des prestations de SEB », a déclaré M. John McKimm, président et chef de la direction. L’opération permet également d’instaurer une relation stratégique avec l’une des principales entreprises de services-conseils en avantages sociaux du monde. « Nous estimons que l’expertise technologique de SEB apportera une importante valeur ajoutée aux clients des activités d’administration au Canada. Nous nous réjouissons à la perspective de nouer une relation d’affaires stratégique avec Aon Hewitt pour des initiatives commerciales futures. »

Selon M. Mohamad El Chayah, président de SEB Administrative Services Inc. : « Cette opération cadre avec notre objectif de promouvoir une croissance notable au sein de SEB Administrative Services Inc. avec des produits, des technologies et des services novateurs permettant l’automatisation des processus opérationnels des clients et l’amélioration de leurs résultats opérationnels. SEB a considérablement investi au cours des cinq dernières années dans les solutions d’automatisation des processus opérationnels axées sur le traitement des prestations de santé. La solution Benefits Exchange Platform de SEB englobe l’administration, l’évaluation, le paiement des réclamations, la facturation, l’établissement de rapports en temps réel, la détection des fraudes en temps réel et l’analyse en temps réel pleinement intégrés pour tous les types de prestations en un seul environnement. Les solutions de traitement des prestations de SEB comprennent également une plate-forme de santé et de bien-être riche en contenu qui est entièrement automatisée, des solutions de gestion des documents, des solutions autonomes d’analyse et de détection des fraudes ainsi que des solutions d’administration et de tarification automatisant la demande, la tarification et l’administration de nouveaux produits d’assurance. Cette opération avec Aon Hewitt constitue l’une des multiples opérations que SEB exécutera en 2017 dans le secteur du traitement des prestations de santé. »

L’opération a pris effet le vendredi 31 mars 2017. Les modalités financières n’ont pas été dévoilées.

À propos de SEB

L’infrastructure globale de SEB compte deux unités d’exploitation : la technologie et les avantages sociaux. La division de la technologie sert actuellement des entreprises et des administrations publiques au Canada et ailleurs dans le monde. La division des avantages sociaux offre des solutions SaaS et IPA dans le secteur des prestations de santé à entreprises et des administrations publiques. La division des avantages sociaux est exploitée comme un client de la division de la technologie. La division de la technologie constitue un atout concurrentiel capital dans l’appui à la mise en œuvre de solutions de traitement des prestations dans l’environnement des clients. Le traitement des prestations est un domaine de spécialisation à forte croissance pour SEB.

L’expertise principale des deux divisions est l’automatisation et la gestion des processus opérationnels au moyen des solutions logicielles exclusives de SEB, combinées avec des solutions de tiers par l’entremise de coentreprises ou de partenariats.

Les acquisitions, les coentreprises et les gains découlant de demandes de propositions continueront de dynamiser la croissance des divisions de la technologie et des avantages sociaux.

Énoncés prospectifs

Le présent communiqué est diffusé à titre d’information seulement. Les énoncés figurant dans le présent communiqué pourraient contenir de l’information « prospective » sur les perspectives commerciales à venir de l’entreprise. Ces énoncés, bien qu’ils soient formulés de bonne foi et soient considérés comme fondés sur des éléments raisonnables, comportent des risques et des impondérables pouvant faire en sorte que les résultats diffèrent sensiblement de ceux qui sont exprimés ou sous-entendus dans ces énoncés prospectifs. Les investisseurs devraient consulter un conseiller professionnel avant de prendre toute décision de placement.

Pour en savoir plus sur SEB, veuillez consulter www.seb-inc.com.

La Bourse de croissance TSX et son fournisseur de services de réglementation (au sens donné à ce terme dans les politiques de la Bourse de croissance TSX) n’acceptent aucune responsabilité quant à l’exactitude ou à la pertinence du présent communiqué.

RELATION AVEC LES MÉDIAS ET AVEC LES INVESTISSEURS :

John McKimm
Président/chef de la direction/chef des placements
Bureau : 888-939-8885, poste 354
Cell. : 416-460-2817
John [dot] mckimm [at] seb-inc [dot] com

Smart Employee Benefits Schedules 2016 Year End Results Conference Call

MISSISSAUGA, ONTARIO- April 3, 2017 - Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSX VENTURE: SEB), will hold its 2016 Year End Results Conference Call & Webcast on Tuesday, April 4th at 9:30 a.m. (Eastern Time) to discuss results and current business initiatives.

Conference Call Details:

Canada & USA Toll Free Dial In: 1-800-319-4610

Toronto Toll Dial In: 1-416-915-3239

Callers should dial in 5-10 minutes prior to the scheduled start time and simply ask to join the call. 

Conference Call Replay Numbers:

Canada & USA Toll Free: 1-855-669-9658
Outside Canada & USA Call: 1-604-674-8052
Replay Access Code: 1306 followed by the # sign

Replay Duration: Available for one week, or until end of day, April 11, 2017.

ABOUT SEB

Smart Employee Benefits Inc.’s global infrastructure is comprised of two operating Divisions: Technology and Benefits. The Technology Division currently serves corporate and government clients across Canada and internationally. The Benefits Division focuses on SAAS and BPO solutions in the Health Sector and delivers its offerings to corporate and government clientele. The Benefits Division operates as a client of the Technology Division. The Technology Division is a critical competitive advantage in supporting the implementation of SEB’s benefits processing solutions into client environments.

For further information about SEB, please visit www.seb-inc.com.

Neither the 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.

MEDIA AND INVESTOR CONTACT:
John McKimm
President/CEO
(888) 939-8885 x 354
(416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com