Mr. Jerry Trent reports

PRINCIPAL TECHNOLOGIES ANNOUNCES LOAN FINANCING AND PRIVATE PLACEMENT AND PROVIDES UPDATE ON VIVOSTAT A/S ACQUISITION

On March 8, 2024, Principal Technologies Inc. entered into a binding commitment letter with the effect that the GreenIslands Opportunities Fund (the lender) will provide a secured loan in the principal amount of eight million euros to provide acquisition financing with respect to the cash portion of the purchase price for Vivostat AS, as further outlined in its news release dated Feb. 6, 2024, and for general working capital purposes.

The terms of the loan include:

• The secured loan shall be provided to the company by the lender on a lump sum basis.
• The interest rate of 12.00 per cent per annum on the principal amount outstanding will be payable up to and including the date that is six years after the initial advance under the loan.
• Interest will be payable quarterly and principal amount payable in 20 quarterly instalments.
• The principal amount and interest in the first year shall not be paid until the loan maturity date.
• The loan will be secured by, among other things, a pledge of all the shares acquired in Vivostat.
• Payment shall be permitted in full or in part with a 6-per-cent prepayment penalty on the prepaid amount.

The loan provides full financing for the company to close the Vivosat acquisition, and, after final adjustments, any remaining funds will be utilized by the company for working capital purposes.

"This loan, by our major shareholder, effectively underwrites our previously announced acquisition of Vivostat," commented Jerry Trent, chief executive officer of Principal Technologies. "Vivostat is the world's leading autologous sealant solution, developed by Bristol Myers Squibb at a cost of $100-million (U.S.). We are now on track to bring this solution to the thousands of hospitals and clinics in jurisdictions in which it has never been sold, including Japan, Brazil and Australia."

Vivostat is a profitable company generating 3.8 million euros in revenue in 2023.

In addition, the company has arranged a non-brokered financing of up to four million units at 25 cents for gross proceeds of up to $1-million. Each unit will consist of one common share of the company and one common share purchase warrant. Each warrant entitles the holder to purchase one additional share of the company at 30 cents for a period of two years from the date of closing. Proceeds of the private placement will be used for general working capital and corporate purposes.

In connection with the private placement, pursuant to the policies of the TSX Venture Exchange, the deemed price of the 2.5 million common shares issuable by the company as partial consideration for the acquisition of Vivostat shall be revised to the offering price.

The private placement is subject to approval of the exchange and all 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.

The lender holds 38.03 per cent of the company's issued and outstanding shares, and, as such, the loan constitutes a related party transaction as defined under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The loan is exempt from the formal valuation requirements pursuant to Subsection 5.5(b) of MI 61-101 (Issuer Not Listed on Specified Markets) and is exempt from the minority shareholder approval requirements pursuant to Subsection 5.7(f) of MI 61-101 (Loan to Issuer, No Equity or Voting Component). The material change report in relation to the related party transactions will be filed less than 21 days before the completion of the proposed loan as the company wishes to complete the corresponding acquisition of Vivostat as soon as commercially feasible.

We seek Safe Harbor.