Mr. Jerry Trent reports

PRINCIPAL TECHNOLOGIES ANNOUNCES GRANT OF STOCK OPTIONS AND NEW FIXED OPTION PLAN

Subject to regulatory approval, Principal Technologies Inc. has granted incentive stock options to certain directors, officers and consultants of the company to acquire an aggregate of one million common shares in the capital of the company at an exercise price of 12 cents in accordance with its 10-per-cent rolling incentive stock option plan. The options granted to various directors, officers and consultants vest immediately and are exercisable for a 10-year term, expiring July 11, 2033. The 200,000 options granted to Jason Frame, an investor relations consultant, will vest 25 per cent each quarter over a 12-month period and are exercisable for a 10-year term, expiring July 11, 2033. The options are subject to the terms and conditions of the option plan and the policies of the TSX Venture Exchange.

The company's board of directors has adopted a 10-per-cent fixed stock option plan. The fixed plan is subject to approval by the exchange and is in addition to the company's current option plan.

Under the fixed plan, the company may grant options to acquire up to an aggregate of approximately 2,287,546 common shares of the company, representing 10 per cent of the issued and outstanding common shares of the company as at the date of the fixed plan, subject to the terms and conditions prescribed by the exchange and applicable securities laws. Subject to confirmation from the exchange, the maximum number of options that may be issued pursuant to the fixed plan is 2,287,546.

The company has granted 2,125,000 conditional stock options under the fixed plan to an officer of the company at an exercise price of 12 cents per share. The conditional options vest immediately and are exercisable for a 10-year term expiring July 10, 2033. Conditional options granted under the fixed plan may not be exercised until exchange approval has been received.

We seek Safe Harbor.