Preo Software Inc.
TSX VENTURE : PKM

Preo Software Inc.

March 05, 2012 18:47 ET

Preo Software Inc. Announces Proposed $300,000 Private Placement Financing

CALGARY, ALBERTA--(Marketwire - March 5, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

PREO SOFTWARE INC. (the "Corporation") (TSX VENTURE:PKM). The Corporation announces that it has entered into an engagement agreement with HOME Investment Management Inc. ("HOME"), an Exempt Market Dealer and Portfolio Manager, to complete a private placement financing to secure $300,000 from the issuance of units ("Units") of the Corporation. Each Unit will consist of $1.00 principal amount secured, subordinated convertible debenture ("Debenture") and one (1) share purchase warrant ("Warrant") of the Corporation.

The Debentures will bear interest at a rate of 15% per annum, payable quarterly by the issuance of common shares ("Common Shares") of the Corporation on the basis that for each $0.15 interest that is due and payable, one (1) Common Share will be issued. The Debentures will mature twenty-four (24) months from the date of issuance, subject to the rights of the holders to convert the outstanding principal into Common Shares at $0.15 at any time prior to maturity. In the event that the volume weighted average trading price of not less than 10,000 Common Share is not less than $0.25 for a period of 30 consecutive trading days, the Debentures will automatically convert into Common Shares at $0.15. The Debentures will be secured by a general security agreement against all present and after-acquired property of the Corporation. Each Warrant will entitle the holders of the Debentures with the right to purchase one (1) Common Share at an exercise price of $0.15 for a period of twenty-four (24) months.

The Corporation will pay HOME a cash commission representing 8% of the principal amount under the Debentures and will issue 60,000 agent's warrants (the "Agent's Warrants"), with the terms of the Agent's Warrants to be identical to the Warrants.

The Debentures and Warrants underlying the Units, and the Common Shares issuable pursuant to the terms of the Debentures and the Warrants (as well as the Agent's Warrants) will be subject to a four (4) month hold period in accordance with applicable securities laws. The private placement is subject to receipt of final approval of the TSX Venture Exchange.

The net proceeds of the private placement will be used by the Corporation for general working capital purposes.

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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