TORONTO, ONTARIO -- (Marketwire) -- 03/05/13 -- 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 announced a Memorandum of Agreement with the SOMOS Group of Companies ("SOMOS") on January 9, 2013 whereby SOMOS was to be acquired by SEB (the "Transaction"). SEB has received TSX Venture Exchange approval for the Transaction and has now closed the Transaction.
SOMOS shareholders, as part of the Transaction price terms, received $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 also included 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 bears 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. The parties have also agreed to adjust the purchase price upwards by a portion of outstanding SRED credits collected by SOMOS, post closing, to a maximum increase in the purchase price of $287,000, as such credits are paid/remitted to SOMOS or for its benefit.
As a condition of the transaction, Alan Boyce, the major shareholder of SOMOS, will remain as CEO and Adam Jasek will assume the responsibilities as President/COO; and both shall remain as part of the executive management team of SOMOS, under 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 clients in technology, aerospace and defense, and governments, 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.
Alan Boyce, CEO of SOMOS, stated, "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 and, with this transaction, assume the role of President/Chief Operating Officer. SOMOS' growth prospects have developed exponentially over the past year and to take advantage of these prospects we need a strong partner that brings both capital and expertise.
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