Strategem Consolidates Stock and Announces Private Placement

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VANCOUVER, BRITISH COLUMBIA – December 13, 2002 – Strategem Capital Corporation (the “Company” or “Strategem”) (TSX-VEN: SCX) announced today that it will proceed with the five for one (5:1) share consolidation approved at its Annual General Meeting held on September 19, 2002. The Company expects the consolidation to be effective at the opening of trading on Monday, December 30, 2002. The Company will not be changing its name in connection with the consolidation.

The Company also announced a private placement financing of 400,000 Units for gross proceeds of $100,000, subject to regulatory approval. Each Unit consists of one postconsolidation common share and one common share purchase warrant. Each warrant is exercisable into one post-consolidation common share for two years at $0.25 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.

“Strategem Capital continues to actively source and evaluate investment opportunities at attractive valuations,” stated Kenneth W. Morgan, President and CEO of Strategem. “The purpose of the private placement and share consolidation is to meet the net tangible asset requirements for investment issuers on the TSX Venture Exchange and to enhance the capital structure for potential acquisitions and/or financings.”

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


“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.