Proposed Subscription of 7,500,000 New Ordinary Shares

at 2.0 p per share to raise £150,000

1 November, 2006

Stilo International plc ("Stilo" or the "Company"), the AIM listed software and services company, today announces a proposed issue of 7,500,000 new ordinary shares (the "Subscription Shares") raising £150,000 before expenses.

The Subscription is subject to approval by shareholders at an extraordinary general meeting to be held on 11.30am on 27 November 2006. If approved it is expected that the Subscription Shares will be admitted to trading on AIM on 28 November 2006.

Background to and reasons for the Subscription

The Company announced on 31 July 2006 the acquisition of the business and certain assets of Proceed Engineering Solutions Limited and Proceed Holdings Limited ("Proceed") by its subsidiary Stilo Technology Limited. Stilo confirmed at the time of the interim results announcement on 6 September 2006 that trading showed continuing improvement over 2005 and that the Proceed acquisition had got off to a very encouraging start.

The board is pleased to confirm that progress continues at Proceed and across the Company. As also stated in the interim announcement, the board continues to invest further in the business, and to explore further acquisition opportunities. While Stilo has sufficient financial resources to achieve this planned growth, the board has identified opportunities to accelerate growth through additional investment.

In response to support from Chief Executive Les Burnham and certain other investors, the board is undertaking the Subscription to provide further working capital in order to help fund existing and potential future development. Mr Burnham will be subscribing for 3,000,000 Subscription shares for a total consideration of £60,000.

Details of the Subscription

The Company is proposing to raise £135,000 (net of expenses), by way of a Subscription for 7,500,000 new ordinary shares at 2.0 pence per new ordinary share. The Subscription Shares represent 7.48 per cent. of the issued share capital of the Company as enlarged by the Subscription.

Following the Subscription Les Burnham will have a beneficial interest in 3,000,000 ordinary shares, representing 2.99 per cent. of the then issued share capital of the Company.

Following the Subscription the Company's issued share capital will comprise 100,228,470 ordinary shares.

Further details of the background to and reasons for the Subscription are set out in a circular which is to be posted today the full text of which is set out in the Company's website www.stilo.com. Further copies of the circular are available from the Company at Regus House, Windmill Hill Business Park, Whitehill Way, Swindon SN5 6QR.

Enquiries:

Les Burnham, Chief Executive, Stilo International plc 01793 441444

Russell Cook, Charles Stanley Securities 020 7149 6000

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