TORONTO, ONTARIO -- (Marketwire) -- 01/09/13 -- Smart Employee Benefits Inc. ("SEB") (TSX VENTURE: SEB), is a technology company providing software, solutions and services specializing in managing group benefit solutions and healthcare claims processing environments for corporate, government and non-profit clients. SEB has signed a Memorandum of Agreement with the SOMOS Group of Companies ("SOMOS") whereby SOMOS will be acquired by SEB (the "Transaction"). Completion of the Transaction is subject to regulatory approval.
SOMOS shareholders, as part of the Transaction price terms, will receive $325,000 in cash, 2,500,000 SEB shares ("Shares") at a valuation of $0.30 per share and 1,000,000 SEB Share Purchase Warrants ("Warrants"). The Shares will be escrowed over a period of 30 months released in various amounts at 6 month intervals. The Warrants will have a term of 60 months and an escalating exercise price per common share of SEB every 12 months of $0.45, $0.55, $0.65, $0.70, and $0.75. In addition, the purchase price will also be satisfied by SEB issuing to the SOMOS shareholders a five year convertible note in the aggregate principal amount of $400,000 (the "Convertible Note"). The Convertible Note shall bear interest at a rate of 3% per annum. Interest shall be paid quarterly and principal may be repaid annually in equal installments. The Convertible Note shall be convertible into common shares of SEB at an escalating conversion price of $0.45, $0.55, $0.65, $0.70 and $0.75 per common share of SEB from years one through five, respectively. SOMOS shareholders will also participate in outstanding SRED credits of SOMOS to a maximum of $287,000 as such credits are paid/remitted to SOMOS or for its benefit.
As a condition of the Transaction, the existing CEO/President and major shareholder of SOMOS, Alan Boyce, along with Adam Jasek, COO, shall remain as the executive management team of SOMOS with long term management contracts.
SOMOS is an Ottawa-based Management Consulting, services and training company in business since 1991. SOMOS offers management solutions, professional services, training and project management solutions to corporate and government clients in technology, aerospace and defense, and government, both federal and provincial. SOMOS has extensive vendor arrangements with corporate and government clients. SOMOS has enjoyed significant, profitable growth in the past few years where sales are now exceeding $7.0 million annually with a substantial pipeline of annuity business and business prospects.
States Alan Boyce, CEO of SOMOS, "SOMOS has a strong base of business with Ottawa clients, including the federal government. We have solid client relationships and have enjoyed healthy growth to date. Over the past year we have been fortunate to have Adam Jasek join us in the role of Chief Operating Officer, and during this period SOMOS' prospects have developed exponentially. To take advantage of these prospects we need a strong partner that brings both capital and expertise.
We have had a personal and business relationship with John McKimm for many years and have been impressed with John's vision and his ability to expedite growth. With SEB and John as our partners, SOMOS' growth strategy moves beyond organic initiatives to include acquisitions.
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