PKM Preo Software Inc.

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.

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