Private Placement

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NEWS RELEASE FOR:
STRATEGEM CAPITAL CORPORATION.

CONTACT:
Ken Morgan
1-604-692-0073
Email: info@strategemcapital.com or visit
www.strategemcapital.com

VANCOUVER, BRITISH COLUMBIA – July 27, 2005 – Strategem Capital Corporation (“Strategem” or the “Company”) (TSX-V: SGE) announced today that is has arranged a private placement financing of 360,000 Units for gross proceeds of $129,600, subject to regulatory approval. Each Unit consists of one common share and one common share purchase warrant. Each warrant is exercisable into one common share for two years at $0.40 per share. The common shares and the shares resulting from the exercise of the warrants will be subject to a four month hold period. The proceeds of the private placement will be used for working capital.

The private placement that was announced on June 3, 2005 and June 10, 2005 has been cancelled.

About Strategem Capital

Strategem Capital Corporation is a publicly-traded merchant bank focused on the development of emerging companies with growth potential. The Company invests in
debt and/or equity positions in these companies.

This release and prior releases are available on the Company’s Internet web site located at www.strategemcapital.com.

BY ORDER OF THE BOARD OF DIRECTORS

“Kenneth W. Morgan”
Kenneth W. Morgan, CA, CPA
President, CEO and Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.