BasicGov Systems, Inc.
TSX VENTURE : BSG

BasicGov Systems, Inc.

September 29, 2010 19:21 ET

BasicGov Announces Sale of Assets & Name Change

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 29, 2010) - BasicGov Systems, Inc. (TSX VENTURE:BSG) ("BasicGov" or the "Company") announces that, pursuant to the terms of a Business Assets Purchase and Sale Agreement (the "Sale Agreement") dated August 16, 2010 among the Company, 0887901 B.C. Ltd. ("Purchaser") and Pender Growth Fund (VCC) Inc. ("Pender"), it has sold all of its assets, other than cash, to the Purchaser for consideration of approximately $900,000, subject to adjustments for changes in specific working capital balances between July 1, 2010 and September 29, 2010 (the "Closing Date"). The consideration paid exceeds the value of the Company's BasicGov Software-as-a-Service ("SaaS") business estimated by a business valuator to be between $810,000 and $850,000 as of July 15, 2010.

The consideration paid on the Closing Date for the Company's SaaS business assets was a combination of $750,000 in cash and the assumption of certain liabilities of the Company. The actual amount of cash payable and the value of the assumed liabilities will be calculated within 15 days of the Closing Date and adjustments will be made for additional sales of subscriptions of the Company's BasicGov service and increases or decreases in liabilities assumed by the Purchaser between the date of the Sale Agreement and the Closing Date. The adjustments to the amount paid in cash will such that the Company will have $100,000 in working capital as of the Closing Date but immediately after the share redemption and repayment of advances under the loan facility described below. The Company will use this working capital to fund its expenses as a publicly listed shell company and to seek a new business that has the potential to attract greater support from the public market.

The completion of the Sale Transaction triggered redemption rights under the Company's outstanding 250,000 Series 1 Preference Shares that were held by Pender. As a result, such shares were redeemed by the Company at the time of the Sale Transaction. The Company also repaid all working capital loans made by Pender to the Company. A portion of the cash proceeds of the Sale Transaction was used to redeem the Preference Shares and repay the loans.

The Company's name was one of the assets acquired by the Purchaser, therefore, effective at market opening on September 30, 2010, the name of the Company will have changed to "Pedro Resources Ltd." and its stock symbol will be "PED".

At this time the Company is not completing a change of business, as that term is used under policies of the TSX Venture Exchange, and the Company has not yet identified a new business to be acquired by the Company.

Forward-Looking Statements

This news release contains forward-looking statements. Actual events or results may differ materially from those described in the forward-looking statements due to a number of risks and uncertainties, including the liabilities of the Company being greater than expected and the risk that the Company is unable to complete a transaction involving an acquisition of a new business or assets and potential downturns in economic conditions generally. Forward-looking statements are based upon management's estimates, beliefs and opinions. The Company assumes no obligation to update forward-looking statements, other than as required by applicable law.

On behalf of the Board of Directors
BASICGOV SYSTEMS, INC.

"David Roberts"

David Roberts, Director

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.

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