Mr. John McKimm reports

SEB ANNOUNCES $3.5 MILLION FINANCING

Smart Employee Benefits Inc. has arranged two private placement financings that will raise an aggregate total of up to $3.5-million, subject to regulatory approval. The proceeds of these financings will be used primarily for acquisitions and working capital.

Terms:

• $1-million equity units will be issued at 50 cents per unit, and consist of one SEB common share and one SEB common share purchase warrant exercisable for a period of 36 months at 60 cents per share for year one and year two, and 75 cents per share for year three. The president/chief executive officer of SEB, through a personal holding company, will subscribe for $500,000 of the equity units;
• $2.5-million senior one-year term debt at 8 per cent per annum, interest calculated and accrued monthly in arrears, paid quarterly. Warrants will be issued to acquire SEB common shares on the basis of one warrant for every $1.25 of principal of debt issued. The warrants will have a term of 36 months, and be exercisable at 60 cents per SEB share for the first 12 months and 75 cents per SEB share for the subsequent 24 months. A total of two million warrants will be issued. The debt may be repaid in whole or in part at any time, without penalty.

Management comments

States John McKimm, president/CEO of SEB: "This financing is targeted to fund acquisitions. The debt financing and a portion of the equity financing is being provided from an investor who has identified SEB as a long-term strategic partner for multiple business initiatives in Canada, the [United States], the United Arab Emirates and India. SEB's technology solutions and expertise provide the core underlying infrastructure for these business initiatives, including a [third party acess] infrastructure in the Middle East and the delivery of pharmaceuticals through unique delivery channels including a vending machine pharmacist footprint. These vending machines would be located in medical centres, universities, colleges, grocery stores, high-traffic office buildings [and others], and would deliver standard packages of the top 40 most prescribed drugs. The SEB software solutions provide the underlying integrated administration and adjudication platform connected through a portal environment (a unique expertise of SEB) directly to medical professionals. Similar pharma technology delivery infrastructure has gained significant traction in the U.S. marketplace, allowing patients to pick up their prescriptions (particularly maintenance drugs) at convenient locations and after hours. Discussions are in process to implement these solutions with the largest grocery chain and pharmacy chain in the UAE. SEB is also in discussions with universities and colleges in the Canadian market to implement this unique solution. This strategic investor has extensive global relationships, and views the SEB software solutions and technology expertise as a significant competitive advantage in expediting these business initiatives. SEB has been working with this investor for some time, and the business opportunities introduced allows SEB to offer very unique solutions to the marketplace."

We seek Safe Harbor.