SEB Reports Results for First Quarter 2020 Conference Call Scheduled Wednesday June 17, at 11:00 A.M.

June 15, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) today reports its financial results for the first quarter of 2020.

States John McKimm, President/CEO/CIO of Smart Employee Benefits Inc.:

“Adjusted EBITDA and EBITDA improved significantly for the first quarter, 2020 over the comparable period the previous year.  The gross margin percentage quarter over quarter declined 1.2%. Operating costs reduction initiatives led to the year over year improvement of over $1.089M in cost structure, which is expected to be over $4.0M annually.

EBITDA improved by $0.937M in the first quarter to a negative $0.072M from a negative $1.009M.  Adjusted EBITDA for the year improved by $0.870M to a negative $0.056M from a negative $0.926M. The improvement is the result of cost reduction initiatives across the company.

SEB has made significant investments in both the Technology and Benefits Divisions since the Company’s inception.  Building the infrastructure, while a time consuming and costly process, has created significant contract backlog with blue chip and government clientele and strong strategic partnerships in both divisions.  As a result, the Technology Division (“TD”) currently experienced a positive $0.524M of EBITDA in the quarter versus $0.492M the previous year. The Benefits Division (“BD”) experienced a positive $0.03M versus a negative $1.032M the previous year.

From January 2020 to April 2020, the company has won over $20.0M of net new contracts.  This represents a win rate of approximately 50% of opportunities bid, well above industry averages and the company’s previous track record.  Submitted proposals and bids outstanding for net new business total approximately $74.0M with decisions pending in the near future.  Additionally, the Company has signed agreements per its “Channel Partner White Label TPA” initiatives, to add approximately 150,000 new plan members to its benefits processing business.  The Benefits Division has under contract over 96% of its 2020 budget and is expected to be cash flow positive in 2020.  The signed new business to date, in 2020, is materially ahead of our business development budget.  The Technology Division has historically been cash flow positive and net new business wins remain strong. Signed contracts (backlog, evergreen, option years), based on a 5-year time frame are valued at over $400M.

COVID-19 has led to demand for our BD solutions, including our “online medical care partnerships”.  In our TD, a portion of our revenues are at risk near term, primarily those related to the project driven portion of the business and the delay of government renewals of existing contracts and the onboarding of new contracts. Budget allocations have not changed, but the expenditures have been delayed.  The remaining business is largely multi-year managed services driven contracts for mission critical infrastructure and systems.  On a consolidated level the company applied for COVID-19 government relief which offset the profitability loss from the decline in revenue in the TD.  The remaining business has experienced stable and growing revenue and is not eligible.

The sales pipeline is the strongest it has ever been.  At a 50% win rate in the past four months this win rate is well above our historical 30% to 35%.  The cost savings initiatives taken over the past several years should be fully experienced in 2020.  We are anticipating improved consolidated financial performance in 2020 fiscal year vs. 2019, particularly in the BD.”

Quarterly Statements of Comprehensive Income (Loss)

 

Dec 1, 2019
to Feb 29, 2020

Sep 1, 2019
to Nov 30, 2019

June 1, 2019 to Aug 31, 2019

Mar 1, 2019
to May 31, 2019

Dec 1, 2018
to Feb 28, 2019

Sep 1, 2018
to Nov 30, 2018 (Note 1)

June 1, 2018
to Aug 31, 2018 (Note 1)

Mar 1, 2018       to May 31, 2018 (Note 1)

Revenue

$16,520,977

$17,326,306

$16,974,918

$17,675,478

$16,506,330

$18,559,118

$17,990,986

$20,019,485

 

 

 

 

Cost of revenues

11,198,629

11,689,312

11,403,091

12,224,037

10,989,649

12,803,253

12,272,162

14,061,863

Gross Margin

5,322,348

5,636,994

5,571,827

5,451,441

5,516,681

5,755,865

5,718,823

5,957,622

Gross Margin as a % of Revenue

32.2%

32.5%

32.8%

30.8%

33.4%

31.0%

31.8%

29.8%

 

 

 

 

Salaries and other compensation costs

3,805,798

3,520,013

4,008,953

4,427,102

4,486,090

4,886,028

4,363,734

3,868,546

Professional fees

169,443

303,312

111,674

315,072

137,112

580,742

60,214

553,123

Office and general

1,403,431

1,946,928

1,275,940

1,235,608

1,819,528

1,723,510

1,159,385

1,269,466

Adjusted EBITDA

(56,324)

(133,259)

175,261

(526,341)

(926,049)

(1,434,415)

135,490

266,487

       
Investment income

 -

(181,424)

(34,077)

 -

 -

 -

 -

 -

Gain on sale of assets

 -

(153,461)

(1,894,514)

 -

 -

 -

 -

 -

Write down of assets

 -

 -

 -

 -

 -

6,671,890

 -

 -

Transition and decommissioning costs

 -

 -

 -

 -

 -

 -

 -

161,750

Change in fair value of contingent consideration

 -

(36,094)

 -

 -

 -

(480,374)

 -

 -

Share- based compensation

15,576

11,903

35,675

63,151

76,158

(171,152)

216,998

425,270

Transaction costs

 -

(117,856)

136,021

50,000

6,437

 -

 -

 -

EBITDA

(71,900)

343,673

1,932,158

(639,493)

(1,008,644)

(7,454,779)

(81,508)

(320,533)

       
Interest and financing costs

725,580

783,599

994,527

608,487

531,528

(400,582)

618,939

878,706

Income tax expense (recovery)

(3,928)

(141,521)

(451,128)

(556)

556

(1,267,024)

(42,983)

22,706

Depreciation and amortization

633,171

744,460

623,321

1,120,003

655,231

768,493

777,520

757,185

Deprecation charge

161,077

 -

 -

 -

 -

 -

 -

 -

Net income (loss) from continuing operations

(1,587,800)

(1,042,865)

765,438

(2,367,426)

(2,195,959)

(6,555,666)

(1,434,984)

(1,979,130)

       
Income (Loss) from assets held for sale, net of tax

 -

 -

(93,799)

35,890

(312,776)

(1,432,309)

128,204

(312,934)

Net comprehensive income (loss)

$(1,587,800)

$(1,042,865)

$671,639

$(2,331,536)

$(2,508,735)

$(7,987,974)

$(1,306,780)

$(2,292,064)

 

 

 

 

Attributed to non-controlling interest

(241,535)

(50,105)

(50,776)

(184,035)

155,922

(136,312)

167,478

(8,158)

Attributed to common shareholders

(1,346,265)

(992,760)

722,415

(2,147,501)

(2,664,657)

(7,851,662)

(1,474,258)

(2,283,910)

Total

$(1,587,800)

$(1,042,865)

$671,639

$(2,331,536)

$(2,508,735)

$(7,987,974)

$(1,306,780)

$(2,292,068)

Note 1 – Historic quarters have been restated to reflect the operations of Paradigm Consulting Group as income from discontinued operations

Segmented Results for the fiscal years ended February 29, 2020 and 2019… 

Smart Employee Benefits Inc.

 

 

 

Segmented Income Statement Detail for the quarter ended February 29, 2020 (in C$)

Technology

Benefits

Corporate

Inter-company Sales/COS

Total Continuing Operations

Discontinued operations

Total Company

Revenue

 $13,603,083

 $3,338,835

 $                -  

 $(420,942)

 $16,520,977

 $                  -  

 $16,520,977

Cost of revenues

 

 

 

 

 

 

 

Cost of revenues

11,495,798

123,773

 -

(420,942)

11,198,629

 -

11,198,629

Gross margin

2,107,285

3,215,063

 - 

 - 

5,322,348

 - 

5,322,348

 

Expenses

Salaries and other compensation costs

1,138,985

2,410,565

256,248

 -

3,805,798

 -

3,805,798

Office and general

433,310

769,448

200,674

 -

1,403,431

 -

1,403,431

Professional fees

10,719

5,031

153,692

 -

169,443

 -

169,443

 

1,583,014

3,185,044

610,614

 -

5,378,672

5,378,672

 

Adjusted EBITDA

524,271

30,019

(610,614)

 - 

(56,324)

 - 

(56,324)

Share-based compensation

 -

 -

15,576

 -

15,576

 -

15,576

EBITDA

524,271

30,019

(626,190)

 - 

(71,900)

 - 

(71,900)

 

Amortization of intangible assets

3,035

76,520

500,564

 -

580,119

 -

580,119

Depreciation

27,546

24,679

827

 -

53,052

 -

53,052

Depreciation of right-of-use assets

58,512

 -

102,565

 -

161,077

161,077

Interest and financing costs

263,397

73,340

388,842

 -

725,580

 -

725,580

Income tax expense

8,512

 -

(12,440)

 -

(3,928)

 -

(3,928)

 

Net income (loss)

 $163,268

 $(144,520)

 $(1,606,548)

 $             –

 $(1,587,800)

 $                 –

 $(1,587,800)

…Segmented Results for the fiscal years ended February 29, 2020 and 2019 

Smart Employee Benefits Inc.

 

 

 

Segmented Income Statement Detail for the quarter ended February 28, 2019 (in C$)

Technology

Benefits

Corporate

Inter-company Sales/COS

Total Continuing Operations

Discontinued operations

Total Company

Revenue

 $14,067,434

 $3,005,821

 $                -  

 $(566,925)

 $16,506,330

 $5,604,238

 $22,110,568

Cost of revenues

 

 

 

 

 

 

 

Cost of revenues

11,309,164

152,522

 -

(472,038)

10,989,649

4,497,148

15,486,797

Gross margin

2,758,269

2,853,299

 - 

(94,887)

5,516,681

1,107,090

6,623,771

 

Expenses

Salaries and other compensation costs

1,384,146

2,882,842

313,989

(94,887)

4,486,090

512,459

4,998,549

Office and general

813,049

987,523

18,957

 -

1,819,528

450,833

2,270,361

Professional fees

69,402

15,933

51,777

 -

137,112

53,850

190,962

 

2,266,596

3,886,298

384,723

(94,887)

6,442,730

1,017,143

7,459,873

 

Adjusted EBITDA

491,673

(1,032,999)

(384,723)

 - 

(926,049)

89,947

(836,102)

Transaction costs

 -

 -

6,437

 -

6,437

91,641

98,078

Share-based compensation

 -

 -

76,158

 -

76,158

 -

76,158

EBITDA

491,673

(1,032,999)

(467,319)

 - 

(1,008,645)

(1,694)

(1,010,338)

Amortization of intangible assets

52,497

64,463

480,611

 -

597,572

 -

597,572

Depreciation

30,258

26,575

827

 -

57,659

 -

57,659

Interest and financing costs

328,365

9,625

193,539

 -

531,528

251,082

782,611

Income tax expense

556

 -

 -

 -

556

60,000

60,556

 

Net income (loss)  $79,997  $(1,133,662)  $(1,142,295)  $             –  $(2,195,959)  $(312,776)  $(2,508,735)

Comparative Consolidated Results for First Quarter 2020 and 2019 

 

For the Quarter Ended

 

Feb 29, 2020

Feb 28, 2019

Revenue

$  16,520,977

$  16,506,330

Cost of revenues

11,198,629

10,989,649

Gross Margin

5,322,348

5,516,681

Gross Margin as a % of Revenue

32.2%

33.4%

Operating costs

5,209,229

6,305,618

Professional fees

169,443

137,112

Adjusted EBITDA

(56,324)

(926,049)

Share based compensation

15,576

76,158

Transaction costs

 -

6,437

EBITDA

$ (71,900)

$ (1,008,644)

Net loss from continuing operations (Note 1)

$ (1,587,800)

$ (2,195,959)

Note 1 - During Fiscal 2018, an LOI was signed with Golden Opportunities Fund to sell Paradigm, leading to a change in financial presentation.  In compliance with IFRS, the results of Paradigm and its associated assets/liabilities have been disclosed as assets held for sale in the financial statements.  During Fiscal 2019, the transaction was completed.

Reconciliation of Consolidated Net income (loss) to EBITDA 

For the Quarter Ended

 

Feb 29, 2020

Feb 28, 2019

Net loss from continuing operations

$ (1,587,800)

$ (2,195,959)

Interest and financing costs

725,580

531,528

Income tax expense(recovery)

(3,928)

556

Depreciation and amortization

633,171

655,231

Deprecation charge

161,077

 -

EBITDA

(71,900)

(1,008,644)

Share- based compensation

15,575

76,158

Transaction costs

 -

6,437

Adjusted EBITDA

$ (56,325)

$ (926,049)

Revenue

During the first quarter, 2020 consolidated revenues from continuing operations was a $16.521M compared to $16.506M in the prior year. In the TD, revenues decreased by $0.464M, while the BD’s revenues increased by $0.333M.  The differential is due to intercompany revenue elimination difference of $0.146M resulting from consolidation.  Most of the revenue reduction in the TD is due to non-recurring project revenue. This project revenue has transitioned to managed services revenue, smaller in amounts, but higher in profit margin.  The Company is focused on the higher margin business within the Benefits Division.

Gross Margins and Gross Margin %

The Company generated $5.322M in gross margin during the first quarter February 29, 2020 vs. $5.517M the previous year. Gross Margin % (“GM %”) for continuing operations was 32.2% in 2020 compared to 33.4% in 2019. TD gross margins were 15.5% vs. 19.6% the previous year, largely due to one-time revenue. BD gross margins improved by $0.362M and 1.4% of sales.

Operational Costs:

  • Salaries and Other Compensation - salaries decreased by $0.680M during the quarter over the comparable period the prior year.  The reduction is a result of the cost reduction initiatives.  The cost reduction was across the company.  Additional savings are targeted for 2020, as the full impact of 2019 cost saving initiatives flow through for the complete 2020 year.
  • Office and General Costs­ – Normalized office and general costs decreased by $0.416M quarter over quarter. This cost reduction was across all divisions and expected to prevail throughout 2020.
  • Professional Fees – Professional fees increased by $0.032M, quarter over quarter.  Professional fees vary with the amount of financing or acquisition/disposition activity during the period. Given the major transactions in process, these fees will increase in 2020 as transactions close. 

Non-Cash Expenses:

Non-Cash expenses include amortization, depreciation and share-based (options) compensation increased $0.078M over the quarter ended February 29, 2020 compared to the previous year.  The largest component is amortization of intangible assets (mostly related to acquisition). These costs are expected to be largely amortized by the end of Fiscal 2020. 

Interest and Financing Costs and Interest Accretion:

Interest and financing costs increased approximately $0.194M during the first quarter compared to prior year with approximately $0.726M being expensed in the first quarter.  The increase is due largely to refinancing costs during the year and is expected to decline as short-term financing is converted to longer term financing in the third quarter. 

KEY DEVELOPMENTS DURING AND SUBSEQUENT TO THE YEAR

Update on Scotia Capital Strategic Review Process

Scotia Capital Inc. was engaged in March 2019 to assist the Company in identifying and negotiating a transaction with a strategic investment partner.  The SEB Board and Management believes this process will provide the optimal immediate value for shareholders, be operationally strategic to SEB, and provide the working capital to expedite the many growth opportunities.  The Company is currently in the final stages of the refinancing process with negotiations at advanced levels on 5-year convertible notes of $20M and operating credit facilities in the $10.0M range.

Business Development to Date

Relationships have been consolidated and grown with multiple new consulting partners.  The Company’s Channel Partner strategy has gained strong traction with more than a dozen active negotiations with Channel Partner opportunities including brokerage organizations, MGAs, TPAs, insurers, unions, and corporate entities.  Several LOIs and LOAs have been executed with revenue growth expected in 2020 and beyond from the Channel Partner business initiatives.  Channel Partner “white label TPA” agreements have been recently signed with organizations representing approximately 150,000 plan members. The Company has gained significant traction with its online medical care partnership with EQ Care, recently adding clients representing over 100,000 plan members. In addition, the company is launching “FlexPlus – Worksafe”, a fully integrated module for collecting, aggregating, and analyzing and managing workforce data to manage the complexities of returning workforce to the workplace.

The Company’s RFP sales pipeline is the largest it has ever been, in both corporate and government opportunities.

In the TD the Company won or renewed in 2019 over $90.0M of new multi-year contracts and added over $20.0M of contracts value in the first quarter 2020.  Total contract value for both TD and BD including backlog, option years and evergreen remains strong.

Cost Reduction and Integration

In the first quarter, the Company reduced its cost structure by over $1.089M, with the full annualized amount expected to be reflected in Fiscal 2020 and beyond.  Technology infrastructure represents more than half of the savings.  This amount brings total cost reductions to in excess of $4.0M per annum since Fiscal 2017, over 60% attributed to technology infrastructure.  The Company is targeting additional cost realignment and reduction in Fiscal 2020 as new technology systems improve efficiencies.

States John McKimm, President/CEO/CIO of Smart Employee Benefits Inc.:

“SEB has been in an investment mode since its inception in both the TD and more significantly in the BD. The TD, historically, has strong profitability.  The BD has required significant investment, the majority of which has been expensed.  This has penalized cash flow, net earnings, and EBITDA.  Going forward, the capital expenditures are minimal, the cost structure from acquisitions and integrations has been largely realigned and both the TD and BD are anticipated to show strong growth and positive cash flow in 2020.  The contract values including backlog, option years and evergreen remain strong, with the Company continually renewing or winning sufficient new business to replace annual revenues.  The Company has established strong traction in multiple new business initiatives and is well positioned to win new business going forward.  The RFP win rates in the first quarter have been over 50% of submitted bids and proposals, well above the industry average and the company’s past experience in the 30%-35% range.”

CONFERENCE CALL DETAILS

Date/Time: Wednesday June 17, at 11:00 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/sebIR20200617.html

Conference Call Replay Numbers:

Canada & USA Toll Free: 1-855-669-9658
Code: 4749 followed by the # sign

Replay Duration: Available for one week until end of day Wednesday June 24, 2020.

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 650 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 and managing 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.

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 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

 

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.

SEB ANNOUNCES POSTPONEMENT IN TIMING OF ANNUAL MEETING OF SHAREHOLDERS AND FILING OF EXECUTIVE COMPENSATION DISCLOSURE AND Q1 FINANCIAL STATEMENTS

May 28, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that the challenges posed by COVID-19 have resulted in a continuing delay in the finalization and filing of the Company’s interim financial statements for the quarter ended February 29, 2020 and the related management’s discussion and analysis (collectively the “First Quarter Filings”), as required by Part 4 and Part 5 of National Instrument 51-102: Continuous Disclosure Obligations.

This news release is being issued in accordance with the blanket relief of a 45-day extension, provided by Canadian Securities Administrators and Ontario Instrument 51-502: Temporary Exemption from Certain Corporate Finance Requirements, for periodic filings normally required to be made by issuers during the period from March 23, 2020 to June 1, 2020.

The Company’s board of directors and its management confirm that they are continuing to work expeditiously to meet the Company’s obligations relating to the filing of the First Quarter Filings.  At this time, the Company anticipates being able to complete the First Quarter Filings by June 15, 2020.

There have not been any material business developments since the date of the last news release dated April 28, 2020 that was filed regarding the financial reports of the Company, other than as set out below.

The Company has completed and filed its audited annual financial statements and related management’s discussion and analysis for the year ended November 30, 2019.

In addition, after careful consideration and in accordance with applicable corporate and securities laws and stock exchange rules, the Company has determined to reschedule its 2020 annual meeting of shareholders to be held after May 31, 2020 on a date to be determined. The Company will therefore rely on the blanket relief granted by the Canadian Securities Administrators and Ontario Instrument 51-504: Temporary Exemption from Certain Requirements to File or Send Securityholder Materials. This allows the Company to include its executive compensation disclosure required under Part 9 of National Instrument 51-102: Continuous Disclosure Obligations in its management information circular for the aforementioned meeting of shareholders as it normally would have done in previous years.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB PROVIDES FURTHER UPDATE ON STRATEGIC FINANCING TRANSACTION

May 22, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it is continuing to work on completing the Company’s $20,000,000 private placement financing, which is being provided by a large strategic investor.  The proceeds of the financing will be used to repay term indebtedness of the Company.  The financing was initially announced by press release dated November 5, 2019 and most recently by press release dated April 22, 2020.

The completion of the strategic financing transaction has been delayed due to challenges and delays related to the COVID-19 pandemic, but the Company still expects to close the financing transaction coincident with the completion of an operating credit facility, which negotiations are in process.

The TSX Venture Exchange (the “Exchange”) has conditionally approved this strategic financing transaction, but completion of the transaction remains subject to final Exchange approval and consent from the Company’s shareholders.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

All figures are in Canadian dollars unless otherwise stated. 

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB Reports Results for Fiscal Year 2019 Conference Call Scheduled Tuesday, May 19, 2020 at 11:00 A.M.

May 14, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) today reports its financial results for the fourth quarter and fiscal year ending November 30, 2019.

States John McKimm, President/CEO/CIO of Smart Employee Benefits Inc.:

“Adjusted EBITDA and EBITDA improved for the fourth quarter and fiscal year ended November 30, 2019 over comparable periods the previous year.  The 2.0% increase in gross margin percentage for the year combined with operating costs reduction initiatives, led to the year over year improvement.  The divestiture of the operating assets of Paradigm Consulting Group Inc. (“Paradigm”) resulted in a positive EBITDA of $1.9M for the third quarter in continuing operations.  The cash flow generated from the Paradigm transaction facilitated a $6.7M reduction in bank debt and the elimination of $3.0M of convertible preferred shares, from November 30, 2018.

Adjusted EBITDA improved by $1.301M in the fourth quarter to a negative $133,259 from a negative $1.434M.  EBITDA for the year improved by $8.567M to a positive $627,691 from a negative $7.939M, a portion of which was due to the gain from the sale of the company’s 75% shareholding in a subsidiary.  Both the third and fourth quarters of fiscal 2019 recorded positive EBITDA.  Adjusted EBITDA was also positive for the third quarter and, excluding the allowance for bad debts of approximately $133,000, would have been marginally positive in the fourth quarter.

SEB has made significant investments in both the Technology and Benefits Divisions since the Company’s inception.  Building the infrastructure, while a time consuming and costly process, has created significant contract backlog with blue chip and government clientele and strong strategic partnerships in both divisions.  As a result, the Technology Division (“TD”) currently delivers strong operating results, and the Benefits Division (“BD”) is anticipated to follow suit in Fiscal 2020.

From January 2020 to April 2020, the company has won over $20.0M of net new contracts.  This represents a win rate of approximately 50% of opportunities bid.  Submitted proposals and bids outstanding for net new business total approximately $74.0M with decisions pending in the near future.  Additionally, the Company has signed agreements per its “Channel Partner White Label TPA” initiatives, to add approximately 150,000 new plan members to its benefits processing business.  The Benefits Division has under contract over 96% of its 2020 budget and is expected to be cash flow positive in 2020.  The signed new business to date, in 2020, is materially ahead of our business development budget.  The Technology Division has historically been cash flow positive and net new business wins remain strong. Signed contracts (backlog, evergreen, option years), based on a 5-year time frame are valued at over $400M.

COVID-19 has led to demand for our BD solutions, including our “online medical care partnerships”.  In our TD, approximately 10% of our revenues are at risk, primarily those related to the project driven portion of the business.  The remaining business is largely multi-year managed services driven contracts for mission critical infrastructure and systems.  On a consolidated level the company applied for approximately $400K of COVID-19 government relief, the majority of the relief for one subsidiary representing approximately 6% of total revenues.  The remaining business has experienced stable and growing revenue and is not eligible.

The sales pipeline is the strongest it has ever been.  At a 50% win rate in the past four months this win rate is well above our historical 30% to 35%.  The cost savings initiatives taken over the past several years should be fully experienced in 2020.  We are anticipating strong financial performance in 2020 fiscal year, particularly in the BD.” 

Quarterly Statements of Comprehensive Income (Loss) 2019 

 

Sep 1, 2019
to Nov 30, 2019

June 1, 2019
to Aug 31, 2019

Mar 1, 2019
to May 31, 2019

Dec 1, 2018
to Feb 28, 2019

Revenue

$ 17,326,306

$ 16,974,918

$ 17,675,478

$ 16,506,330

Cost of revenues

11,689,312

11,403,091

12,224,037

10,989,649

Gross Margin

5,636,994

5,571,827

5,451,441

5,516,681

Gross Margin as a % of Revenue

32.5%

32.8%

30.8%

33.4%

Salaries and other compensation costs

3,520,015

4,008,953

4,427,102

4,486,090

Professional fees

303,311

111,674

315,072

137,112

Office and general

1,946,927

1,275,940

1,235,608

1,819,528

Adjusted EBITDA

(133,259)

175,261

(526,341)

(926,049)

Investment income

(181,424)

(34,077)

 -

 -

Gain on sale of assets

(153,461)

(1,894,514)

 -

 -

Write down of assets

 -

 -

 -

 -

Transition and decommissioning costs

 -

 -

 -

 -

Change in fair value of contingent consideration

(36,094)

 -

 -

 -

Share-based compensation

11,904

35,675

63,151

76,158

Transaction costs

(117,856)

136,021

50,000

6,437

EBITDA

343,672

1,932,158

(639,493)

(1,008,644)

Interest and financing costs

783,596

994,527

608,487

531,528

Income tax expense( recovery)

(141,522)

(451,128)

(556)

556

Depreciation and amortization

744,462

623,321

1,120,003

655,231

Net income (loss) from continuing operations

(1,042,864)

765,438

(2,367,426)

(2,195,959)

Income (Loss) from assets held for sale, net of tax

 -

(93,799)

35,890

(312,776)

Net comprehensive income (loss)

$ (1,042,864)

$  671,639

$ (2,331,536)

$ (2,508,735)

Attributed to non-controlling interest

(50,105)

(50,776)

(184,035)

155,922

Attributed to common shareholders

(992,759)

722,415

(2,147,501)

(2,664,657)

Total

$ (1,042,864)

$  671,639

$ (2,331,536)

$ (2,508,735)

 

Quarterly Statements of Comprehensive Income (Loss) 2018

 

Sep 1, 2018
to Nov 30, 2018 (Note 1)

June 1, 2018
to Aug 31, 2018 (Note 1)

Mar 1, 2018       to May 31, 2018 (Note 1)

Dec 1, 2017
to Feb 28, 2018 (Note 1)

Revenue

$ 18,559,118

$ 17,990,986

$ 20,019,485

$ 20,509,710

 

 

 

 

Cost of revenues

12,803,253

12,272,162

14,061,863

14,537,910

Gross Margin

5,755,865

5,718,823

5,957,622

5,971,800

Gross Margin as a % of Revenue

31.0%

31.8%

29.8%

29.1%

 

 

 

 

Salaries and other compensation costs

4,886,028

4,363,734

3,868,546

4,166,263

Professional fees

580,742

60,214

553,123

200,048

Office and general

1,723,510

1,159,385

1,269,466

1,588,170

Adjusted EBITDA

(1,434,415)

135,490

266,487

17,319

       
Investment income

 -

 -

 -

 -

Gain on sale of assets

 -

 -

 -

 -

Write down of assets

6,671,890

 -

 -

 -

Transition and decommissioning costs

 -

 -

161,750

 -

Change in fair value of contingent consideration

(480,374)

 -

 -

 -

Share-based compensation

(171,152)

216,998

425,270

99,652

Transaction costs

 -

 -

 -

 -

EBITDA

(7,454,779)

(81,508)

(320,533)

(82,333)

       
Interest and financing costs

(400,582)

618,939

878,706

575,239

Income tax expense( recovery)

(1,267,024)

(42,983)

22,706

1,764

Depreciation and amortization

768,493

777,520

757,185

796,246

Net income (loss) from continuing operations

(6,555,666)

(1,434,984)

(1,979,130)

(1,455,581)

       
Income (Loss) from assets held for sale, net of tax

(1,432,309)

128,204

(312,934)

(94,844)

Net comprehensive income (loss)

$ (7,987,974)

$ (1,306,780)

$ (2,292,064)

$ (1,550,426)

 

 

 

 

Attributed to non-controlling interest

(136,312)

167,478

(8,158)

50,546

Attributed to common shareholders

(7,851,662)

(1,474,258)

(2,283,910)

(1,600,972)

Total

$ (7,987,974)

$ (1,306,780)

$ (2,292,068)

$ (1,550,426)

Note 1 – Historic quarters have been restated to reflect the operations of Paradigm Consulting Group as income from discontinued operations

 

Comparative Results for fiscal year 2019 and 2018 

 

Year ended November 30

 

2019

2018

Revenue

$  68,483,032

$  77,079,295

Cost of revenues

46,306,089

53,675,187

Gross Margin

22,176,943

23,404,108

Gross Margin as a % of Revenue

32.4%

30.4%

Operating costs

22,720,163

23,025,101

Professional fees

867,170

1,394,127

Adjusted EBITDA

(1,410,390)

(1,015,120)

Transition and decommissioning costs

 -

161,750

Investment income

(215,501)

 -

Gain on sale of portion of business

(2,047,975)

 -

Share-based compensation

186,887

570,768

Transaction costs

74,602

 -

Change in fair value of contingent liability

(36,094)

(480,374)

Write down of assets

 - 

6,671,890

EBITDA

$  627,691

$ (7,939,154)

Net loss from continuing operations (Note 1)

$ (4,840,811)

$ (11,425,363)

Note 1 - During Fiscal 2018, an LOI was signed with Golden Opportunities Fund to sell Paradigm, leading to a change in financial presentation.  In compliance with IFRS, the results of Paradigm and its associated assets/liabilities have been disclosed as assets held for sale in the financial statements.  During Fiscal 2019, the transaction was completed.

 

Reconciliation of Net income (loss) to EBITDA

Fiscal year ended

 

30-Nov-19

30-Nov-18

Net loss from continuing operations

$ (4,840,811)

$ (11,425,363)

Interest and financing costs

2,918,137

1,672,302

Income tax expense recovery

(592,650)

(1,285,537)

Depreciation and amortization

3,143,014

3,099,444

EBITDA

627,691

(7,939,154)

Transition and decommissioning costs

 -

161,750

Investment income

(215,501)

 -

Gain on sale of assets

(2,047,975)

 -

Write- down of assets

 -

6,671,890

Change in fair value of contingent consideration

(36,094)

(480,374)

Share- based compensation

186,888

570,768

Transaction costs

74,602

 -

Adjusted EBITDA

$ (1,410,390)

$ (1,015,120)

 

Revenue

During Fiscal 2019, consolidated revenues from continuing operations decreased compared to prior year by $8.6M.  In the TD, revenues decreased by $8.1M, while the BD’s revenues decreased by $677K.  The differential is intercompany revenue which is eliminated on consolidation.  In the TD, the revenue decrease is partially a result of technical resources being used internally to build-out and integrate systems to support the BD.  Additionally, most of the revenue reduction in the TD is due to non-recurring project revenue with three clients.  This project revenue has transitioned to managed services revenue, smaller in amounts, but higher in profit margin.  The Company is focused on the higher margin business within the Benefits Division and considers the decrease in TD’s revenues as an investment in the future.

Gross Margins and Gross Margin %

The Company generated $22.2M in gross margin during the year ended November 30, 2019 vs. $23.4M in fiscal 2018.  Consolidated gross margin from continuing operations declined year over year by approximately $848K in the TD and $510K in the BD.  Gross Margin % (“GM %”) for continuing operations was 32.4% in 2019 compared to 30.4% in 2018.  Improved margins resulted in both the TD and BD.  Continued delivery of higher margins is expected throughout 2020.

Operational Costs:

  • Salaries and Other Compensation - salaries decreased by $843K during the year over the comparable period the prior year.  The reduction is a result of the cost reduction initiatives.  The largest reduction was in corporate and TD with the BD relatively flat, year over year.  Additional savings are targeted for 2020, as the full impact of 2019 reductions flow through for the complete year.
  • Office and General Costs­ – Normalized office and general costs would have decreased by $611K year over year, except for a one-time cost recovery related to Paradigm totaling of $1.149M over the comparable period in 2018.
  • Professional Fees – Professional fees decreased by $527K year over year.  Professional fees vary with the amount of financing or acquisition/disposition activity during the period. 

Non-Cash Expenses:

Non-Cash expenses include amortization, depreciation and share-based (options) compensation decreased $0.34M over the year ended November 30, 2019 compared to prior year.  The largest component is amortization of intangible assets (mostly related to acquisition), which was $2.9M YTD.  These costs are expected to be largely amortized by the end of Fiscal 2020. 

Interest and Financing Costs and Interest Accretion:

Interest and financing costs increased approximately $1.25M compared to prior year with approximately $2.9M being expensed in Fiscal 2019.  The increase is due largely to refinancing costs during the year and is expected to decline as short-term financing is converted to longer term financing.

KEY DEVELOPMENTS DURING AND SUBSEQUENT TO THE YEAR

Update on Scotia Capital Strategic Review Process

Scotia Capital Inc. was engaged in March 2019 to assist the Company in identifying and negotiating a transaction with a strategic investment partner.  The SEB Board and Management believes this process will provide the optimal immediate value for shareholders, be operationally strategic to SEB, and provide the working capital to expedite the many growth opportunities.  The Company is currently in the advanced stages of the refinancing process with negotiations at advanced levels on 5-year convertible notes of $20M and operating credit facilities in the $12.0M range. 

Sale of Paradigm Consulting Group Inc.

On July 3, 2019, the Company divested the operating assets of Paradigm to a Limited Partnership of which the combination of Golden Opportunities Fund Inc. (“Golden”) and Paradigm’s senior management own 75% and the Company owns 25%.  The purchase price included a cash amount of $4.5M, cancellation of $3.0M of Paradigm preferred shares owned by Golden, which were convertible into SEB common shares, and a working capital and pre-closing earnings adjustment.  In exchange for Golden relinquishing the convertibility and earnings bonus features of the preferred shares, the Company issued to Golden 1,000,000 warrants to acquire SEB shares at an exercise price of $0.30 per share for a period of four years following close of the transaction.

Paradigm was originally acquired in 2015 to facilitate a local footprint in Saskatchewan and Manitoba for multiple RFP bids, which Management believes can be achieved with a 25% equity interest.  The proceeds from the sale have been used to reduce SEB’s debt and contribute to working capital.

Chief Financial Officer Changes

Robert Prentice, CPA, CA, a founder of SEB and the Chief Financial Officer (“CFO”) retired in the third quarter and resigned from the Company.  The Company would like to thank Robert for his contributions to the Company over the past eight years and wish him all the best in his future endeavors.

The Company appointed Tim Beaulieu, CPA, CA, as CFO and Corporate Secretary in the public company.  Tim has a long history with the Company, as CFO of both Technology Division entities and Benefits Division entities, representing over 80% of consolidated Company revenues.

Business Development to date

During Fiscal 2019, the Company has made substantial progress on new business development.  In the BD, the Company has added more than 17,000 new plan members in 2019 from new and existing clients, representing annual revenue in excess of $1.0M, with multi-year contracts.  In addition, the Company has renewed 10 existing clients representing over 38,000 plan members.  This brings the Company’s total renewals since acquiring the Aon book of business to 35 of 48 clients representing over 180,000 plan members.  The remaining clients are either evergreen (ongoing) or come up for renewal in 2020 and beyond. The company anticipates high renewal rates.

Relationships have been consolidated and grown with multiple new consulting partners.  The Company’s Channel Partner strategy has gained strong traction with more than a dozen active negotiations with Channel Partner opportunities including brokerage organizations, MGAs, TPAs, insurers, unions and corporate entities.  Several LOIs and LOAs have been executed with revenue growth expected in 2020 and beyond from the Channel Partner business initiatives.  Channel Partner “white label TPA” agreements have been recently signed with organizations representing approximately 150,000 plan members.

The Company’s RFP sales pipeline is the largest it has ever been, in both corporate and government opportunities.

In the TD the Company won or renewed in 2019 over $90.0M of new multi-year contracts.  Total contract value for both TD and BD including backlog, option years and evergreen remains strong.

Cost Reduction and Integration

In Fiscal 2019, the Company reduced its cost structure by over $1.33M per annum, with the full amount being reflected in Fiscal 2020 and beyond.  Technology infrastructure represents more than half of the savings.  This amount brings total cost reductions to in excess of $4.0M per annum since Fiscal 2017, over 60% attributed to technology infrastructure.  The Company is targeting additional cost realignment and reduction in Fiscal 2020 as new technology systems improve efficiencies.

States John McKimm, President/CEO/CIO of Smart Employee Benefits Inc.:

“SEB has been in an investment mode since its inception in both the TD and more significantly in the BD. The TD, historically, has strong profitability.  The BD has required significant investment, the majority of which has been expensed.  This has penalized cash flow, net earnings and EBITDA.  Going forward, the capital expenditures are minimal, the cost structure from acquisitions and integrations has been largely realigned and both the TD and BD are anticipated to show strong growth and positive cash flow in 2020.  The contract values including backlog, option years and evergreen remain strong, with the Company continually renewing or winning sufficient new business to replace annual revenues.  The Company has established strong traction in multiple new business initiatives and is well positioned to win new business going forward.  As articulated previously, win rates in the past 4 months have been over 50% of submitted bids and proposals.”

CONFERENCE CALL DETAILS

Date/Time: Tuesday, May 19 at 11:00 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/sebIR20200519.html

Conference Call Replay Numbers:

Canada & USA Toll Free: 1-855-669-9658
Code: 3841 followed by the # sign

Replay Duration: Available for one week until end of day Tuesday, May 26, 2020.

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 650 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 and managing 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.

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 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

 

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.

SEB PROVIDES UPDATE TO POSTPONEMENT IN FILING OF FINANCIAL STATEMENTS

April 28, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that the challenges posed by COVID-19 have resulted in a continuing delay in the finalization and filing of: (i) the Company’s audited annual financial statements for the fiscal year ended November 30, 2019 and the related management’s discussion and analysis (collectively, the “Annual Filings”); and (ii) the Company’s interim financial statements for the quarter ended February 29, 2020 and the related management’s discussion and analysis (collectively the “First Quarter Filings”), all as required by Part 4 and Part 5 of National Instrument 51-102: Continuous Disclosure Obligations.

This news release is being issued in accordance with the blanket relief of a 45-day extension, provided by Canadian Securities Administrators and Ontario Instrument 51-502: Temporary Exemption from Certain Corporate Finance Requirements, for periodic filings normally required to be made by issuers during the period from March 23, 2020 to June 1, 2020.

The Company’s board of directors and its management confirm that they are continuing to work expeditiously to meet the Company’s obligations relating to the filing of the Annual Filings and the First Quarter Filings.  At this time, the Company anticipates being able to complete the Annual Filings by May 13, 2020 and the First Quarter Filings by May 29, 2020.

There have not been any material business developments since the date of the last news release dated March 27, 2020 that was filed regarding the financial reports of the Company.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB UPDATE ON STRATEGIC FINANCING TRANSACTION

April 22, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it is continuing to work on completing the Company’s $20,000,000 private placement financing, which is being provided by a large strategic investor.  The financing was initially announced by the Company’s press release on November 5, 2019 and most recently by press release on March 23, 2020.  The strategic financing transaction is expected to close coincident with the completion of an operating credit facility, which negotiations are in process.

The TSX Venture Exchange (“TSXV”) has conditionally approved this strategic financing transaction, but completion of the transaction remains subject to final approval from the TSXV and consent from the Company’s shareholders.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

All figures are in Canadian dollars unless otherwise stated. 

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB ANNOUNCES POSTPONEMENT IN FILING OF FINANCIAL STATEMENTS

March 27, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it will not be in a position to file its audited annual financial statements for the fiscal year ended November 30, 2019 and the related management’s discussion and analysis, as required by Part 4 and Part 5 of National Instrument 51-102: Continuous Disclosure Obligations (collectively, the “Annual Filings”) by the filing deadline of March 30, 2020.

This news release is being issued in accordance with the blanket relief of a 45-day extension, provided by Canadian Securities Administrators and Ontario Instrument 51-502: Temporary Exemption from Certain Corporate Finance Requirements, for periodic filings normally required to be made by issuers during the period from March 23, 2020 to June 1, 2020.

In response to recent proclamations from Canadian health authorities and the challenges resulting from the COVID-19 pandemic, the Company has taken the necessary precautions to protect the health and safety of its employees and the public. Accordingly, a significant portion of the Company’s staff as well as its auditor’s staff have been working from home, and travel for in-person meetings has been curtailed. While working remotely, the coordination of tasks and work product has been more difficult, the completion of audit procedures due to limited access to paper-based supporting evidence has been delayed, and the entire audit process has been slowed.  Furthermore, since the Company’s various suppliers and clients have also been working remotely, their responses to standard audit inquiries have slowed, including responses from significant Company clients.

The challenges posed by COVID-19 have resulted in a delay in the finalization and filing of the Annual Filings.  However, the Company’s board of directors and its management confirm that they are working expeditiously to meet the Company’s obligations relating to the filing of the Annual Filings.  At this time, the Company anticipates being able to complete the Annual Filings by April 29, 2020.

There have not been any material business developments since the date of the last interim financial reports of the Company that were filed.

The Company confirms that its management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207: Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions, such that they are in a black-out period until the end of the second trading day after the Annual Filings have been disclosed by way of a news release.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB UPDATE ON STRATEGIC FINANCING TRANSACTION

March 23, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it is continuing to work on completing the Company’s $20,000,000 private placement financing, which is being provided by a large strategic investor. The financing was previously announced by press release dated November 5, 2019, December 9, 2019, January 8, 2020 and February 7, 2020. The strategic financing transaction is expected to close coincident with the completion of an operating credit facility, which negotiations are in process.

The TSX Venture Exchange (“TSXV”) has conditionally approved this strategic financing transaction, but completion of the transaction remains subject to final approval from the TSXV and consent from the Company’s shareholders.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACTS:
John McKimm
President/CEO/CIO
Office (888) 939-8885 x 2354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com

SEB UPDATE ON STRATEGIC FINANCING TRANSACTION

February 7, 2020 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that it is continuing to work on completing the Company’s $20,000,000 private placement financing, which is being provided by a large strategic investor.  The proceeds of the financing will be used to repay term indebtedness of the Company.  The financing was previously announced by press release dated November 5, 2019, December 9, 2019 and January 8, 2020.  The strategic financing transaction is expected to close coincident with the completion of an operating credit facility, which negotiations are in process.

Completion of this strategic financing transaction remains subject to approval from the TSX Venture Exchange and consent from the Company’s shareholders.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

All figures are in Canadian dollars unless otherwise stated. 

MEDIA AND INVESTOR CONTACTS:

John McKimm

President/CEO/CIO

Office (888) 939-8885 x 2354

Cell (416) 460-2817

john [dot] mckimm [at] seb-inc [dot] com

SEB ANNOUNCES EXTENSION OF STRATEGIC PRIVATE PLACEMENT

December 9, 2019 – Mississauga, ON: Smart Employee Benefits Inc. (“SEB” or the “Company”) (TSXV: SEB) announces that the TSX Venture Exchange (“TSXV”) has granted an extension with respect to the duration of the Company’s $20,000,000 strategic private placement financing, which financing was previously announced by press release dated November 5, 2019.  The outside date upon which final acceptance of the private placement may be granted by the TSXV has been extended to January 8, 2020.

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 650 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 and managing 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.

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

Neither TSX Venture Exchange Inc. 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.

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”, “target” 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.

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

All figures are in Canadian dollars unless otherwise stated.

MEDIA AND INVESTOR CONTACTS:

John McKimm
President/CEO/CIO
Office (888) 939-8885 x 2354
Cell (416) 460-2817
john [dot] mckimm [at] seb-inc [dot] com