SEB Reports Results for Second Quarter, 2016 and Schedules Conference Call - Seite 2

Operating Expenses Metric (salaries and other compensation, professional fees and office and general):

1. Salaries and other compensation- were 9.6% and 10.0% of sales for the first quarter and the half year, up from 8.0% and 9.5% for the same period the previous year. This is largely due to the addition of staff in the Benefits Division as the Company positions for growth in this segment. Longer term, management believes that this ratio will shrink to the 7% range.
2. Professional fees- were $201 thousand in the quarter versus $417 thousand for the same period the previous year. Costs for the half year were $651 thousand, up $116 thousand from the previous year.
3. Office and general- were 4.5% and 4.7% of sales for the first quarter and the half year, an improvement from 7.9% and 7.6% for the same periods the previous year.
4. Total Operating Expenses- were 14.9% and 16.1% of sales for the quarter and the half year, respectively. This is an improvement from 19.0% and 19.2% the previous year. Management expects operating expenses as a percent of sales to continue to improve significantly as sales grows. This element of the SEB cost structure is very scalable.

Operating Income before non-cash costs, interest and one time professional fees- was $1.0 million for the quarter versus $0.6 million in the previous year. The half year was $1.2 million versus $1.1 million in the previous year. The comparative figures includes Banyan's results. The quarter ended May 31, 2016 has been the strongest positive quarter since the inception of the Company.

Adjusted EBITDA from Continuing Operations- was $1.1 million for the quarter, up from $0.2 million in the previous year. The half year comparison is $1.1 million, up from $0.6 million.

Loss from Continuing Operations- was $1.1 million for the quarter and $3.5 million for the half year. This compares to $1.8 million and $2.6 million for the same previous year. Significant contributors to the loss are non-cash items (e.g. share based compensation, amortization, depreciation and interest accretion).

Technology Division- the Technology Division recorded strong performance for the first half of fiscal, 2016. Revenue was $47.8 million with an EBITDA of $3.2 million. Backlog and renewals remain strong.

Benefits Division- the deconsolidation of Banyan significantly reduced the revenue from this Division. This Division remains a major growth focus for the Company in 2016 and beyond. The Company has significant growth opportunities in the second half of 2016.