Acquisition of Securities of Strategem Capital Corporation

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Kenneth W. Morgan and the Pryce Family Trust No. 1
Suite 236, 2906 West Broadway
Vancouver, BC V6K 2G8

News Release

August 18, 2006

In accordance with the requirements of Section 111 of the Securities Act (British Columbia), and Section 176 of the Securities Act (Alberta), Kenneth W. Morgan (“Morgan”) and the Pryce Family Trust No. 1 (“Pryce Trust”) announce that on June 23, 2006, Morgan acquired direct ownership of 147,500 common shares of Strategem Capital Corporation (the “Company”) by way of the exercise of Company options. Together, Morgan and The Pryce Trust own a total of 544,523 common shares of the Company. This represents 11.8% of the issued and outstanding common shares of the Company as at August 14, 2006 (based upon 4,605,185 common shares being issued and outstanding). The shares were acquired for investment purposes. Mr. Morgan and the Pryce Trust have no present intention of acquiring more shares of the Company, aside from possible exercise of warrants and stock options.

The Company is a reporting company whose shares are posted and listed for trading on the TSX Venture Exchange under the trading symbol “SGE”.

“Kenneth W. Morgan”

“Kenneth W. Morgan”