LeoNovus Announces Non-Brokered Private Placement of Units

SUNNYVALE, Calif., Jan. 17, 2014 /CNW/ - LeoNovus® Inc. ("LeoNovus" or the "Company") (TSXV: LTV), a leading Internet and distributed cloud provider with its SMART Media® Platform and distributed Cloud Services announced today that it intends to complete a non- brokered private placement of up to CDN$2,300,000 in gross proceeds (the "Offering") based on the sale of up to 9,700,000 units (the "Units") priced at CDN$0.23 per Unit. Each Unit is expected to be comprised of one (1) common share in the capital of the Company (the "Common Share") and one (1) Common Share purchase warrant (the "Warrants") entitling the holder to purchase one (1) Common Share for a period of two (2) years from the closing date of the Offering (the "Warrant Expiry Date") at an exercise price of CDN $0.40 per Common Share, provided that if after four months and one day following the closing date, the weighted average trading price of a Common Share on the principal market on which such shares trade is equal to or exceeds $0.65 for 10 consecutive trading days (the 10^th such trading date being the "Eligible Acceleration Date"), the Warrant Expiry Date shall be changed to the date which is 30 calendar days following the date a formal notice is issued by the Company announcing the reduced warrant term, provided such notice is sent to all warrant holders no more than five business days following the Eligible Acceleration Date. In connection with the Offering, the Company has agreed to pay a cash finder's fee to an arm's length party in the amount of $37,260. The securities issued pursuant to the Offering are subject to a four (4) month and one (1) day hold period from the date of issuance. The Offering is anticipated to close on or about January 20, 2014. The Company expects to use the proceeds from the Offering to fuel its growth in the hospitality market as well as other new market areas. Completion of the Offering is subject to regulatory approval, including acceptance and approval of the TSX Venture Exchange.

The Company anticipates that an insider of the Company may purchase up to 41.24% of the Offering (if the Offering is fully subscribed). In its consideration and approval of the Offering and the potential subscriptions by insiders, the Company's board of directors (the "Board") took note of the fact that subscriptions to the Offering by insiders are related party transactions, as defined in securities regulations[1] and that it is in the best interests of the Company to conclude the Offering expeditiously. The Board determined that the subscriptions by insiders are exempt from formal valuation and minority approval requirements.[2]

LeoNovus is developing a high performance browser-based Internet software platform with a remotely managed system in the cloud as the point of presence to service just-in-time services for the HDTV, hospitality and healthcare markets including its SMART Networks that lowers cost while delivering new revenue sources via its geo-dispersed distributed network. This innovative offering delivers geo-dispersed distributed Cloud Services at the Edges including storage and extremely efficient compute cycles that leverage dark core resources for super computer processing capabilities.

About LeoNovus Inc. (www.LeoNovus.com)

LeoNovus® is a publically traded company on the TSX Venture Exchange in Toronto with offices in Sunnyvale, CA. and Ottawa, Ontario. The Company has launched an innovative high performance browser-based SMART MEDIA PLATFORM with a remotely managed cloud system that provides HDTVs and other connected devices with unprecedented access to features, content, and functionality over the web without the cost, overhead and support of a PC. This approach delivers an extremely flexible just-in-time service model to multiple markets including residential, hospitality and health care. In parallel, LeoNovus utilizes its proprietary Dark Core™ technology with a unique ability to "light up" idle dark processors in hardware systems for purposes of building Intelligent Networks. This allows the Company to offer geo-dispersed cloud services for new revenue streams while reducing costs and increasing performance via distributed networks. ­­­­

The securities offered in the Offering have not been and will not be registered under the U.S. Securities Act as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, sale or solicitation would be unlawful.

LeoNovus shares have traded on the TSX Venture Exchange since June 10, 2009. Further information about LeoNovus can be found in its filings with Canadian securities regulators, which filings are available at http://www.sedar.com

Neither 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.

Certain information included in this press release is forward-looking and may involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with LeoNovus' growth, the state of the financial markets, regulatory risks and other factors. Forward-looking statements included or incorporated by reference in this press release includes statements with respect to proposed terms of, and the intended use of proceeds of, the Offering. There can be no assurance that any statements of forward-looking information contained in this release will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Unless otherwise required by applicable securities laws, LeoNovus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on any statements of forward-looking information that speak only as of the date of this release. More detailed information about potential factors that could affect LeoNovus' financial and business results is included in public documents LeoNovus files from time to time with Canadian securities regulatory authorities and which are available at www.sedar.com.

[1] Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101")

[2] Under sections 5.5(a) and 5.7(a) of MI 61-101

SOURCE: LeoNovus Inc.

LeoNovus™ Inc., [email protected], or Gordon Campbell, CEO, Telephone, [phone], or Fax, [phone], [email protected]

http://www.leonovus.com