Mr. John McKimm reports

SEB SIGNS JV WITH USA TECHNOLOGY PARTNER

Smart Employee Benefits Inc. has executed a letter of agreement with NeST Technology Corp. based in Virginia, United States. As part of the agreement NeST has also agreed to invest in Smart Employee.

NeST Technologies, part of the $200-million (U.S.) NeST Group, is a global enterprise specializing in providing software, services and solutions to customers from diverse verticals like aerospace, banking, financial services, insurance, health care, utilities and manufacturing.

NeST, like Smart Employee, has multiple partnerships and certifications for various technology platforms, including Microsoft, Oracle, open source and legacy (mainframe).

NeST and Smart Employee have recognized that there are synergies beyond the benefits-processing business of the joint venture that the parties are committed to explore to further enhance market opportunity and shareholder value. Pursuant to this letter of agreement, Smart Employee and NeST have agreed to the following:

1. Joint venture to develop benefits processing business in USA Smart Employee and Nest will incorporate a new company in the USA. The JV company will be owned 50 per cent by NeST and 50 per cent by Smart Employee. Smart Employee will license its benefit processing solutions to the JV company, providing an exclusive licence for third party administrators and professional employer organizations and a non-exclusive licence for other U.S. market segments. Smart Employee will receive a license fee of $2.25-million (U.S.) of which it will capitalize $250,000 (U.S.) for 50 per cent equity in the new venture: the balance of $2-million (U.S.) is to be paid over time from the cash flow of the JV company. NeST will commit capital of up to $2.25-million (U.S.) of which it will capitalize $250,000 (U.S.) and $2-million (U.S.) will be advanced as shareholder loans to finance operations. The loans will be repaid over time from the cash flow of the JV company. The terms of the shareholder loans are being finalized. The JV will deploy the same channel partners strategy in its client acquisition business model as Smart Employee does in Canada.
2. Equity investment in Smart Employee. NeST will make an equity investment in Smart Employee of $960,000 (Canadian) at 16 cents per share for a total of six million shares. The NeST investment is part of a larger Smart Employee equity offering of up to $2-million at 16 cents per share for a total of 12.5 million shares. All securities issued in connection with this $2-million offering will be subject to a four-month hold period. It is expected that the offering will close in the next week.

Stated Dr. Javed Hassan, chairman and owner of NeST Group: "The NeST Group has a long history of supplying software, solutions and services to the health care and insurance industry in the U.S. and globally. We have been in discussions with Smart Employee for a number of months and are pleased to have reached agreement to bring Smart Employee's platform and proven solutions to the U.S. where we see significant opportunities and a fast-track business model for quickly becoming a significant technology back office processing partner in the multi-billion-dollar PEO and TPA market. This is a sector where Smart Employee solutions can add substantial value in both cost reduction, through enhanced automation of business processes, and new revenue opportunities. In addition, we see significant synergies between our companies and look forward to working together with John McKimm and his management team in this JV and exploring further opportunities."

Stated John McKimm, president, chief executive officer and chief information officer of Smart Employee: "We are pleased to partner with Dr. Hassan and The NeST Group, both in the USA joint venture and in Dr. Hassan's interest in becoming a material shareholder of Smart Employee. Dr. Hassan and his executive team in the U.S. and globally have an envious record of success on a global basis. NeST and Smart Employee have engaged a president/chief executive officer for the USA joint venture and are moving ahead to launch the JV in early October, 2017. Smart Employee benefits processing solutions have applicability beyond Canada, both in the USA marketplace and globally. Dr. Hassan has been a visionary in building and implementing leading technology solutions in his professional life, as a senior executive of several of the world's largest technology companies and as chairman/founder of The NeST Group in 1998. The NeST Group is a conglomerate of over 25 companies globally with over 4,000 employees. We are privileged to have Dr. Hassan and the NeST Group as our strategic go to market partner in the USA Additionally, there are multiple other synergies between NeST and Smart Employee, which should prove very positive for both entities."

About Smart Employee Benefits Inc.

Smart Employee's global infrastructure comprises two operating business units: technology non-benefits and benefits processing. The TNB currently serves corporate and government clients across Canada and internationally. The BP focuses on offering software as a service and BPO solutions in the benefits processing sector to corporate and government clients, globally. The BP business operates as a client of the TNB.

We seek Safe Harbor.