Mr. Jim Fredrickson reports

LEONOVUS INTRODUCES SMART HOME CONNECT POWERED BY THE Wise NETWORK; UPDATES TO PRIVATE PLACEMENT CLOSING

LeoNovus Inc. has added high-value functionality and feature enhancements to its LeoNovus platform. LeoNovus is developing a high-performance browser-based Internet software platform with a managed system called the Wise Network that provides personalized access to all the features, content, and functionality available on the Internet without the malware, security and support issues of a PC.

The Wise Network is a key cloud component to the LeoNovus offering, providing support and upgrades, full analytics, and a multiplicity of revenue-generating services, including content, applications, targeted advertising and microtransactions. It is also a platform for third party developers. These capabilities allow for scalability and the ability to offer new programs, such as the Smart Home Connect.

"Our customers have asked us to add services and applications in the area of home management," stated Dan Willis, chief architect of LeoNovus. "The way we have designed the Wise Network allows us to add both hard and soft applications to support home management, including temperature settings, IP video surveillance, motion sensors, lighting, etc., leveraging the capabilities of the Wise Network. We can add this utilizing WiFi so that the cost to the home owner is significantly less than traditional approaches, where you need to add new wiring. We are currently working with key customers in defining their programs and are very excited to add yet another dimension to our offering."

LeoNovus will be announcing more details in the months to come.

Update to the private placement

On Feb. 21, 2012, LeoNovus announced an agreement with MGI Securities Inc. for a brokered private placement of $3-million gross proceeds based on 20 million units priced at 15 cents per unit. Each unit comprises one common share in the capital of the company and one common share purchase warrant, entitling the holder to purchase one common share for a period of three years from the closing date of the offering at an exercise price of 24 cents per common share. The company also agreed, subject to regulatory approval, to grant MGI an agent's option to increase the size of the offering by up to an additional 15 per cent of units, exercisable at any time on or before the date that is two days prior to the closing date of the offering at the same price. The offering was originally anticipated to close on or before April 23, 2012, and a notice was filed with the TSX Venture Exchange to that effect. The company is still working to complete the offering on the same terms as previously described; however, it now anticipates that the offering will close as soon as practicable and in any event not later than June 15, 2012.

The securities to be issued pursuant to the offering will be subject to a four-month-and-one-day hold period from the date of issuance. Completion of the offering is subject to regulatory approval, including acceptance and approval of the TSX Venture Exchange.

We seek Safe Harbor.