Smart Employee Benefits Inc.

TSX VENTURE : SEB


Smart Employee Benefits Inc.

November 29, 2012 16:01 ET

SEB Reports Financial Results for the Period Ending September 30, 2012

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2012) - Smart Employee Benefits Inc. ("SEB" or "Company") (TSX VENTURE:SEB), today reported its financial results for the three month and twelve month interim periods ending September 30, 2012.

During the quarter ending September 30, 2012, the Company completed a reverse take-over transaction ("RTO"), whereby Whiteknight Acquisitions Inc. ("WKA"), a TSXV-listed Capital Pool Corporation, acquired 100% of Smart Employee Solutions Inc. ("SES"), by issuing 30,000,010 common shares. This transaction constituted a Qualifying Transaction under Policy 2.4 of the TSX Venture Exchange. Concurrent with the closing of the RTO, the Company converted $1,305,000 of SES convertible promissory notes to 6,093,000 common shares and 1,305,000 share-purchase warrants. Also concurrent with the closing of the RTO, the Company closed a financing through Canaccord Genuity Corp. which raised $1,947,500 in gross proceeds for which the Company issued 6,491,667 common shares and 6,491,667 share-purchase warrants ("Concurrent Financing"). As part of the transaction, the Company issued 649,167 broker warrants and incurred $217,325 of transaction costs. Insiders, including the President/CEO and the CFO/COO directly and through their investment corporations subscribed for $717,500 of the Concurrent Financing.

Subsequent to the closing of the RTO, WKA, the continuing issuer on the TSXV, changed its name to 'Smart Employee Benefits Inc.'

John McKimm, President, CEO and CIO of SEB stated, "For the past 18 months, SEB has been positioning its technology platform for a major launch in the employee group benefits and health claims processing market place. Industry statistics describe the Canadian group benefits industry as a $33 billion market opportunity and other health claims processing at over $20 billion annually. The SEB technology platform is a fully integrated administration/adjudication/payment processing/reporting technology environment capable of automating adjudication and reporting at the employee/detailed benefit level. SEB is a licensed third party administrator ("TPA") directly connected to over 4,000 dentists and every major drug chain in Canada. SEB issues its own group benefit card which can be white-labeled or co-branded. The SEB business model is to create client referral opportunities through acquisition of and investment in other TPA's, brokers and consultants. The opportunity for SEB is to increase the capture of revenue by providing a complete slate of services and solutions currently being outsourced by most TPA's and insurers to third parties. SEB has spent the past 18 months automating the administration, payment processing and reporting environment around an already-proven adjudication environment. SEB has a development team in Canada and offshore that continues to enhance the automation and integration. This quarter brought about significant changes for the Company, moving the Company to the next stage in its business evolution and positioning it to execute its growth plans through acquisitions and joint-ventures. With the closing of the Concurrent Financing, the Company eliminated its debt and is positioned for an active acquisition/investment growth plan."

In a news release dated September 18, 2012, the Company announced its first acquisition, Logitek Technology Ltd. This acquisition is expected to close shortly. The acquisition is expected to contribute positively to profitability and technology and business infrastructure. The news release provides full details of the planned acquisition.

For the 3 month period ending September 30, 2012, SEB recorded a loss of $1,642,879, which included non-cash costs of $1,144,737, (made up of a Listing adjustment related to the closing of the RTO of $856,238, a Stock-based compensation cost of $274,250 for options and warrants issued during the quarter, and amortization of $14,249) and $142,785 of Professional fees, mostly related to the closing of the RTO and Concurrent Financing and debt conversion.

The unaudited interim financial statements and related MD&A can be found on SEDAR at www.sedar.com under the profile of Smart Employee Benefits Inc.

This Press Release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this Press Release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the results of the Company's Annual General and Special Meeting, the economy generally; consumer interest in the services and products of the resulting issuer; competition; and anticipated and unanticipated costs. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company may specifically disclaim any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this Press Release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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.

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