DEMO Democrasoft Holdings Inc (CE)

FOR IMMEDIATE RELEASE: 3-11-2013

 For Further Information: Mark Kithcart: mkithcart@democrasoft.com or
call 888-993-8683 x706

Democrasoft to Transfer Assets to Private Company

New Entity Will Be Wholly-Owned
Subsidiary of Democrasoft Holdings, Inc.

Santa Rosa, March 11, 2013— Democrasoft,
Inc. (OTC: DEMO) announced today that effective March 8, 2013, all of its
assets and liabilities were transferred into one of its two wholly-owned
subsidiaries, Collaborize, Inc. This new private company expects to issue new
securities, as appropriate, to interested investors.  Reflecting its status as a holding company,
Democrasoft will be renamed Democrasoft Holdings, Inc., and the subsidiary (the
operating company) will do business as Democrasoft.

The public company
(currently Democrasoft, Inc.) will initially be the sole shareholder of the
operating company. It will engage in no other activities for the foreseeable
future, except as it may benefit from the operations of its private subsidiary.
The financial results of the two companies will be consolidated, as required by
the accounting rules, and both companies will cease publicly distributing
financial or other information.

According to
Democrasoft Chairman & CEO Richard Lang, “We are responding to a
long-standing fund-raising obstacle, as well as the advice of potential and
existing investors who are reluctant to invest in a company whose stock is
thinly traded on the public “pink sheets,” where our market valuation and
liquidity have typically been disconnected from the true value that we believe
is inherent in our company and its current and potential opportunities.”

“By operating in the
form of a private company, we can offer new investors a greatly simplified investment
vehicle with only one existing shareholder, our holding company. Meanwhile, we
plan to preserve the eventual liquidity that may be available to our
shareholders through our public vehicle, upon the success of our private
subsidiary” said Lang.

-30-

For more information or to schedule an interview with Democrasoft senior
management, please contact Mark Kithcart at: mkithcart@democrasoft.com or call 888-993-8683 x 706.

About
Democrasoft

Democrasoft is an innovation and licensing company
with a history of pioneering technology. It is the creator of the Collaborize
platform and Collaborize Classroom (www.CollaborizeClassroom.com), the
multi-award-winning blended-learning platform for grades K-20. It is also the
creator of patented and award-winning WeJIT (http://www.mywejit.com), a new model
for self-contained, topic-based online collaboration that stretches across
various platforms and communities. Democrasoft is dedicated to facilitating a
vision of online “social networking with purpose.” For more information, please
visit www.Democrasoft.com.

Certain
statements in this press release constitute "forward-looking statements.''
All statements other than statements of historical facts included in this press
release, including those regarding our future financial position and results,
business strategy, plans and objectives of management for restructuring, fund
raising and future operations are forward-looking statements.

Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements,
or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding our present and future business strategies and the environment in
which we will operate in the future. Factors that could cause our actual
results, performance or achievements to differ materially from those in the
forward-looking statements include, among others, changes in the political,
economic or regulatory conditions in the markets in which we operate, material
disruptions in the education and publishing industries and other factors.

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