Mr. John McKimm reports

SEB CLOSES $22.5 MILLION CREDIT FACILITIES WITH A MAJOR CANADIAN BANK

Smart Employee Benefits Inc. has closed its new credit facilities with a major Canadian bank in the amount of $22.5-million. The credit facilities were obtained by Smart Employee Benefits' technology division. Smart Employee Benefits' benefits division has no debt beyond normal accounts payable.

The new financing arrangements consist of an operating demand facility of up to $12-million, a demand $5.5-million term loan facility with repayment amortized over four years and a $5-million subordinated term loan facility. The junior term facility is a $5-million, five-year, subordinated term facility with the mezzanine arm of the bank with monthly interest only and a balloon payment at the end of the term. The senior term facilities have interest terms consistent with fully secured senior debt. The junior term facility has interest terms consistent with secured subordinate debt facilities.

Each of the senior operating facility, senior term facility and junior term facility is secured by a first charge over all the assets of the borrower and the material subsidiaries of the corporation; contains positive, negative and financial covenants; and includes other usual and customary terms and conditions. The corporation and the material subsidiaries of the corporation, in both the technology division and the benefits division, have provided guarantees in support of these new credit facilities.

The new credit facilities consolidate and replace the aggregate $4,751,000 of credit facilities that the corporation's wholly owned technology division subsidiaries had with the same Canadian bank, as well as the corporation's asset-based credit facilities of $12.5-million with a major international asset-based lender (ABL). The new credit facilities also repay the term debt of Maplesoft Group Inc. (a wholly owned subsidiary of the corporation) and repay select convertible notes at the public company level.

John McKimm, president, chief executive officer and chief investment officer of Smart Employee Benefits, stated: "The acquisition of Maplesoft Group Inc. left Smart Employee Benefits' technology division with significant short-term, very-high-interest-rate debt. These new credit facilities consolidate this short-term debt, extending the term to four to five years and generate interest cash savings of over $130,000 per month, or in excess of $1.5-million annually. The new facilities are tied to the technology division business. The technology division, in fiscal 2016, generated sales of approximately $96-million with an adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] in the $7.5-million range. The technology division has over $450-million of contracts made up of backlog, renewals and option years. The debt service of these facilities is expected to require approximately 35 per cent of the technology division operating cash flow. Significant growth in the technology division is expected in revenue and EBITDA growth in fiscal 2017."

Mr. McKimm further stated: "Smart Employee Benefits as a consolidated entity has made significant progress since Nov. 30, 2015, as follows:

1. "Balance sheet -- Smart Employee Benefits' consolidated debt facilities are primarily Schedule I bank facilities or funding provided by insiders; the company has repaid over $6-million of debt in fiscal 2016;
2. "New equity capital -- Smart Employee Benefits has closed, in the past several months, $5.73-million of new equity funding, the majority being made available by insiders with the president/CEO/CIO representing over one-third of this funding; further equity up to $1-million is expected to close prior to the end of April, 2017, primarily from existing shareholders;
3. "Benefits division acquisition -- the company recently acquired the Canadian mid-market benefits administration business of Aon Hewitt Inc., representing 48 clients and over 250,000 plan members across Canada; this acquisition also included several complementary technology platforms and approximately 150 employees in Canada and India; the transaction created a strategic business relationship with Aon Hewitt on future business initiatives; this transaction positions Smart Employee Benefits as one of the larger benefit administration businesses in Canada and provides the platform for significant organic growth in the benefits division as clients are introduced to Smart Employee Benefits' more extensive health benefits processing solutions;
4. "Technology division backlog, renewal contracts and option years -- has grown to over $450-million where the majority of the contracts are multiyear agreements;
5. "Consolidated revenue -- grew in fiscal 2016 from $42.6-million in fiscal 2015 to $97.2-million with double-digit organic growth forecast for fiscal 2017;
6. "Benefits division backlog and renewal contracts -- is estimated to exceed $50-million over the next four years and growing;
7. "Cash flow positive -- Smart Employee Benefits' technology division has a reached position of positive sustainable and growing cash flow; the benefits division, after five years of investing heavily in software, is expected to reach a position of sustainable positive cash flow in fiscal 2017;
8. "Significant enhancement in Smart Employee Benefits' health benefits and HR [human resource] processing solutions -- Smart Employee Benefits' benefits exchange platform has been significantly enhanced in the past year; the Aon Hewitt transaction has added key functionality; a licence transaction with FICO has also added important analytics and fraud identification capability; the platform includes modules in administration (including a leading flex-plan platform deployed with over 150,000 plan members), an adjudication platform, claims payment processing, real-time reporting, fraud identification and analytics, a new insurance products enrolment platform that reduces the application and approval process to minutes from months, disability document management solutions with analytics that automate disability case management processes, a fully digital, interactive health and wellness platform with multiple apps, including drug adherence, interfaces with wearables et cetera, PBM (pharmacy benefit management) custom solutions for the delivery of drugs, EDI [electronic data interchange] solutions for automating claims processing for various benefit categories that are largely manual in the industry today, and custom preferred provider networks capability; these solutions can operate stand alone or as one fully integrated environment on [the] One Benefit Card; the platform supports disaggregation of benefit types among insurers; it supports the creation of pools that allow better pricing for many benefit categories; the solutions are Web or cloud enabled; all solutions will be cloud enabled within the next several months; all solutions can be deployed globally in multilingual and multicurrency environments; the acquisition of the Aon Hewitt mid-market administration business in Canada provides the opportunity for significant organic revenue growth as clients are introduced to Smart Employee Benefits' fully integrated benefits exchange environment; the majority of the clients already utilize Aon Hewitt's Flex-Plus platform which is now being enhanced and integrated into Smart Employee Benefits' administration and adjudication solutions; Smart Employee Benefits also acquired a total HRO (human resources outsourcing) platform for managing comprehensive HR and employee programs; this platform is also being enhanced; the combination of Smart Employee Benefits and Aon Hewitt solutions creates a unique integrated technology environment for taking Smart Employee Benefits' back office health benefits administration and adjudication solutions to a full PEO (professional employer organization) business model in Canada and the United States; the full implementation of Smart Employee Benefits solutions within a benefit plan environment generates annual processing revenue between $300 to $600 per plan member; the implementation of the full PEO business model can more than double this revenue per plan member.

"The technology division is a strong growing business with significant organic sales and EBITDA growth. The benefits division is expected to enjoy positive cash flow in fiscal 2017. The recent equity financing, combined with this $22.5-million new credit facilities, significantly strengthens the balance sheet. Smart Employee Benefits' integrated technology solutions are among the most comprehensive in the industry for managing health benefit, HR and employee programs.

"Smart Employee Benefits is well positioned for strong growth in both revenue and cash flow in fiscal 2017."

About Smart Employee Benefits Inc.

Smart Employee Benefits' global infrastructure comprises two operating divisions: technology and benefits.

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

We seek Safe Harbor.