Smart Employee Benefits Inc. (“SEB”) (TSX VENTURE:SEB) is pleased to announce it has completed a private placement offering of $1,025,000 of units (the “Units”); with each Unit consisting of (i) a $1.00 principal amount convertible secured subordinated promissory note of SEB (the “Notes”) and (ii) one common share purchase warrant of SEB (the “Warrants”).

The Notes: The Notes have a three year term maturing on the third anniversary of the date of closing (the “Maturity Date”). The Notes bear interest at an annual rate of 9.75%, with interest calculated and paid monthly in arrears. The principal amount of the Notes, to the extent not previously converted or repaid, will, on the Maturity Date, be repayable in its entirety. The Notes are convertible into the common shares of SEB at any time at $0.50 per share in year 1, $0.60 per share in year 2 and $0.75 per share in year 3. The Notes are prepayable by SEB without penalty or bonus on provision of 30 days written notice; provided that during such 30 day period, noteholders shall be entitled to exercise their conversion rights prior to any repayment. The Notes will be secured by registration of a general security agreement against SEB’s assets; but subordinated to a revolving credit facility of up to $3.5 million.

The Warrants: Each Warrant shall be exercisable at any time for a period of 12 months from the date of closing at an exercise price of $0.50 for 1 common share of SEB.

The financing is a non brokered financing of which SEB expects all subscriptions will be received from two insiders of SEB, namely Ron Barbaro and Keith Harris, both directors of SEB. Mr. Barbaro also holds the position of SEB’s Chairman. All securities issued in connection with the private placement are subject to a four month hold period from the date of closing as well as additional hold or escrow periods as may be applicable to insiders of SEB.

Proceeds from the private placement will be used for acquisitions and working capital requirements. The private placement is subject to regulatory approval.