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SEB Reports Financial Results for the 14 Month Period Ending November 30, 2012

TORONTO, ONTARIO — (Marketwire) — 03/28/13 — Smart Employee Benefits Inc. (“SEB” or “Company”) (TSX VENTURE: SEB), today reported its financial results for the fourteen month period ending November 30, 2012.

On July 11, 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 (“Convertible Financing”) 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/CIO 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.-

The financial results represent the transition period of the Company, from a reporting perspective. The Company has elected to use November 30 as its year-end for financial reporting purposes, being the year-end of WKA, whereas SES had a year end of September 30. As a result, the financial results cover the period from October 1, 2011 to November 30, 2012. The Company will henceforth issue annual and interim statements based on using November 30 as its year-end.

John McKimm, President, CEO and CIO of SEB stated “For the past 20 months, SEB has been positioning itself as a technology company with its major focus being 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 $23 billion annually. SEB is building an organization made up of three pillars; Health Care Solutions & Services, Software Solutions and Services and Professional Services, whereby the latter two pillars are complementary to and supportive of the Health Care pillar.

“The initial growth plan for 2013 is acquisition with the objective of reaching consolidated profitability quickly and establishing a solid base of business and clients from which to launch organic growth initiatives. In the past 60 days, SEB has closed two acquisitions and announced a third. These transactions bring both a solid profitable client base and expanded technology operations and infrastructure in both Toronto and Ottawa. These are major centres of growth targeted by SEB.”

SEB has spent the past 20 months automating the administration, payment processing and reporting environment around an already-proven adjudication environment. SEB has a development team in Canada and also uses offshore resources to continue to enhance the automation and integration.

SEB is a licensed third party administrator (“TPA”) and broker. Its business model is to create client referral opportunities through acquisition of and investment in other TPAs, brokers and consultants. The opportunity for SEB is to increase the capture of revenue by providing fully integrated services and solutions, currently being outsourced by most TPAs and Insurers to third parties.

Since November 30, 2012, SEB has announced the closing of Logitek Technology Ltd. and the SOMOS Group and two financings, a convertible note issue of $554,000 and an equity issue of $1,106,000. Both of the acquired companies have a history of profitability and combined revenues of the two companies exceeded $11 million in 2011.

For the 14 month period ending November 30, 2012, SEB recorded a loss of $4,221,765, which included non-cash costs of $1,750,317, made up of a Listing Adjustment related to the closing of the RTO of $841,238, a Stock-based compensation cost of $318,768 for options and warrants issued during the quarter, accretion of non-cash interest and bonus shares totaling $437,652 related to the Convertible Financing, and amortization of $66,495. Of the other costs the largest was Salaries and other compensation costs of $1,286,887 (the largest portion of which was related to software development and maintenance); the next was Professional Fees of $570,763, much of which was related to the costs of closing of the RTO and financings and acquisitions.

The consolidated financial statements and related MD&A for the period ended November 30, 2012, can be found on SEDAR at under the profile of Smart Employee Benefits Inc.

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.

Smart Employee Benefits Inc.
John McKimm
Chief Executive Officer
(416) 460-2817

Smart Employee Benefits Inc.
Shelly Frank
VP Marketing
(416) 637-3486

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