Preo Software Inc.

Preo Software Inc.

October 19, 2010 07:00 ET

Preo Software Inc.: Private Placement of Debentures- $2,000,000 Investor Relations Engagement

CALGARY, ALBERTA--(Marketwire - Oct. 19, 2010) - PREO SOFTWARE INC. (the "Corporation" or "Preo") (TSX VENTURE:PKM). The Corporation is pleased to announce that it has entered into an agreement with Notre- Dame Capital Inc. ("Notre-Dame") to raise up to $2,000,000 from a private placement of debentures on a best efforts basis. The debentures will be for a term of 2 years, will bear interest at a rate of 10% per annum payable on a quarterly basis and the outstanding principal may at the option of the holders be converted into common shares at a conversion price of $0.40 per share. The debentures shall be automatically converted into common shares at a conversion price of $0.40 in the event that the common shares trade at not less than $0.60 for a minimum of 30 consecutive trading days on the facilities of the TSX Venture Exchange.

In connection with the private placement, the Corporation will pay Notre-Dame a cash commission of 8% and will issue warrants representing 8% of the number of shares issuable assuming conversion of all of the debentures issued under the private placement. Each warrant will entitle Notre-Dame with the right to purchase a common share for $0.40 for a period of 2 years from closing of the private placement.

The net proceeds from the private placement will be used for general working capital purposes. The debentures and the common shares issuable thereunder will be subject to a 4 month hold period under applicable securities laws. The issuance of debentures is subject to approval of the TSX Venture Exchange.

"The recent addition of Supplies Network, following on multi-year agreements signed with Xerox and Toshiba America Business Solutions is clear indication that our channel distribution program is gaining significant momentum" said Preo's CEO, Gary McCone. "This financing will solidify our ability to support these important relationships while being able to aggressively pursue new opportunities."

Investor Relations Engagement

The Corporation also announces that it has entered into an investor relations agreement with Octobaan IR Capital Inc. ("Octobaan") of Ottawa. Octobaan will be responsible for a variety of investor relations activities, including development of the Corporation's communications strategy with its shareholders and other stake-holders, dissemination of corporate information packages, presentations to and communications with brokers, analysts and investors. Under the terms of the engagement expiring on January 31, 2011, Octobaan will be paid a fee of $6,000 per month and will also acquire options to purchase 100,000 shares at an exercise price of $0.40 per share with such options expiring 2 years from the date of issue. The terms of the investor relations agreement is subject to approval of the TSX Venture Exchange and all applicable securities laws.

About Preo™ Software

Preo Software Inc. is the market leader in providing Print Knowledge Management Systems (PKMS) to enterprises and select OEM's around the world. Printelligence™, the company's award winning SaaS (Software as a Service) offering, empowers users to optimize their print assets and reduce print volumes yielding significant cost savings and a smaller environmental footprint. Preo customers have achieved significant cost reductions through the deployment of Printelligence's patented PKMS Rules Engine, which allows managers to monitor, advise and/or control the print function in their organization.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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