Mr. Jerry Trent reports

PRINCIPAL TECHNOLOGIES ANNOUNCES DEBT SETTLEMENT TRANSACTION

Principal Technologies Inc. has entered into debt settlement agreements with certain creditors to settle an aggregate of $534,467 in outstanding debt through the issuance of an aggregate of 1,068,934 common shares of the company at a deemed value of 50 cents per debt settlement share.

Pursuant to the debt settlement transactions, the company has agreed to settle an aggregate of $118,025 owing to an arm's-length creditor for technical services provided, and $416,442 in debt owing to a non-arm's-length creditor for corporate consulting services provided.

The debt settlement shares to be issued pursuant to the debt settlement transactions will be subject to a statutory hold period of four months from the date of issuance in accordance with applicable securities legislation. The debt settlement transactions are subject to customary closing conditions and approvals, including acceptance by the TSX Venture Exchange.

Related-party participation in the debt settlement transactions

Dr. Leopold Specht, a director and an insider of the company, participated in the debt settlement transaction and will receive 798,700 debt settlement shares. The participation of Dr. Specht constitutes a related-party transaction as defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions).

The company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, on the basis that neither the fair market value of the securities to be issued to the insider, nor the consideration for such securities exceeds 25 per cent of the company's market capitalization.

The company expects that closing of the debt settlement transactions will occur within 21 days of this announcement and that it will not file a material change report in respect of the related-party transaction at least 21 days before the closing. The company deems this circumstance reasonable to complete the debt settlement transactions in an expeditious manner.

About Principal Technologies Inc.

Principal Technologies is a Canadian-based health care technologies acquisition company. The company is engaged in building a portfolio of profitable health care technology companies with a focus on those with global distribution potential, which have intellectual property capable of enhancing medical treatment quality, cost-efficiency, optimization of the patient pathway and implementation of point-of-care technologies.

We seek Safe Harbor.