June 30, 2017 – Mississauga, ON
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.
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.
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.
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.
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