Mr. Jerry Trent reports

PRINCIPAL TECHNOLOGIES CLOSES SECOND TRANCHE AND ANNOUNCES UPSIZE OF OVERSUBSCRIBED PRIVATE PLACEMENT

Principal Technologies Inc. has closed the second tranche (tranche 2) of its previously announced non-brokered private placement. Under tranche 2 of the offering, the company issued 6,823,333 common shares at 15 cents per share for gross proceeds of $1,023,500. The total raised under the offering to date is $1,373,975.

The company also announces that it has increased the size of the offering, as previously described in the company's news releases dated Oct. 6, 2023, and Nov. 21, 2023. The company now intends to issue up to 10.7 million shares at a price of 15 cents per share for total gross proceeds of approximately $1.6-million subject to final approval from the TSX Venture Exchange. The company first announced the offering for up to six million common shares of the company for aggregate gross proceeds of up to $900,000.

The company has received approval from the TSX-V for an extension and intends to close a third and final tranche of the offering on or before Jan. 17, 2024. The company has now received additional offers to participate in the third tranche of the offering.

"We are exceptionally grateful for the support of both our existing and new shareholders to allow us to close this oversubscribed private placement," commented Jerry Trent, chief executive officer of the company. "We are now entering a new and exciting phase of our development as we advance discussions for our first major European health care acquisition. Our pipeline has never been stronger as we search for profitable, unique targets. We look forward to updating the market in due course."

Finders' fees in connection with the offering, include two components, namely cash finders' fees and finders' warrants. The cash finders' fee shall be equal to 8 per cent of the amount provided to the company pursuant to a financing or investment agreement entered into between the company and a designated investor for financing or an investment in exchange for securities or other equity in the company. The finders' warrants shall be equal to 8 per cent of the number of securities received by the designated investor. Each non-transferable finder's warrant entitles the holder to purchase one common share of the company for a period of 24 months from the date of issuance at a price of 20 cents per share. In connection with the closing of tranche 2, cash finders' fees of $33,720 were paid in cash and a total of 224,800 finders' warrants are issuable.

The company intends to use the net proceeds of the offering for working capital in order to secure a major asset and for general corporate purposes.

All securities issued pursuant to the offering, and any shares that may be issuable on exercise of any such securities will be subject to a statutory hold period expiring four months and one day from the date of issuance of such securities.

We seek Safe Harbor.