Mr. Jake Kalpakian reports

37 CAPITAL ARRANGES FINANCINGS AND SETTLES DEBT

37 Capital Inc. intends to raise funds for gross proceeds of up to $700,000 by the issuance of up to 10 million units of the company at a price of seven cents per unit. Each unit will consist of one common share of the company and one share purchase warrant to acquire one common share of the company at a price of 10 cents per share for a period of three years. If, any time after six months from the issuance date, in the event that the company's shares trade on the Canadian Securities Exchange at 35 cents per share or above for a period of 10 consecutive trading days, a forced exercise provision will come into effect for the warrants issued in connection with this financing.

In addition, the company intends to conduct a convertible debenture financing to raise up to $450,000 in gross proceeds (up to five million units). The debentures will pay interest at the rate of 10 per cent per annum and will mature 36 months from the date of issuance. The debentures shall be convertible at the conversion price of nine cents per unit at the conversion price of nine cents per unit. Each unit shall consist of one common share and one share purchase warrant exercisable at the price of 15 cents per share until the maturity date. If, any time after six months from the issuance date, in the event that the company's shares trade on the CSE at 35 cents per share or above for a period of 10 consecutive trading days, a forced exercise provision will come into effect for the warrants issued in connection with this financing.

Finders' fees may be payable in respect to the above proposed transactions and certain insiders may participate in the financings. The funds raised from the financings will be used toward general working capital.

Furthermore, the company will enter into a debt settlement agreement with a creditor, an arm's-length party, for the total amount of $122,668.40, whereby the creditor has agreed to accept common shares in the capital of the company as full and final settlement of outstanding amount owing plus accrued interest to the creditor. The company shall issue to the creditor 1,362,982 common shares in the capital of the company at a deemed price of nine cents per share.

All securities that may be issued in connection with the above transactions will be subject to a four-month-and-one-day hold period and other applicable restrictions under securities laws.

We seek Safe Harbor.