Mr. Jerry Trent reports

PRINCIPAL TECHNOLOGIES ANNOUNCES PRIVATE PLACEMENT

Principal Technologies Inc. has arranged a non-brokered private placement to raise gross proceeds of up to $900,000, in accordance with the policies of the TSX Venture Exchange, through the issuance of up to six million common shares at a price of 15 cents per share.

The company intends to use the net proceeds of the private placement for working capital in order to secure a major asset and general corporate purposes. The company may pay a finder's fee in connection with the private placement to eligible finders, in accordance with the policies of the exchange and applicable securities laws, consisting of: (i) a cash commission of up to 8 per cent of the gross proceeds of the private placement; and (ii) a number of common share purchase warrants equal to up to 8 per cent of the number of shares sold pursuant to the private placement. Each finder's warrant will entitle the holder thereof to acquire one share at a price of 20 cents for a period of 24 months from the date of issuance.

The private placement is subject to approval of the exchange, and all shares and securities of the company issued pursuant to the private placement will be subject to a four-month hold period from the date of issuance. The private placement will not result in the creation of a new control person of the company.

We seek Safe Harbor.