Palcan also announces that Paul Lancaster, who has acted as the Company's Chief Financial Officer, is leaving the Company effective September 30, 2004.

The loan from the President is in the amount of $50,000, with a term of sixty days, an interest rate of 12% per annum, and is secured by certain equipment.

The loan from the director is in the amount of $150,000 with a term of sixty days, an interest rate of 12% per annum, and is secured by assets associated with metal hydride hydrogen storage.

"This bridge from the Board displays a firm conviction in Palcan, its business prospects, and our ability to raise the capital we need to succeed," said Dr. John Shen, Palcan's Chief Executive Officer. "While closure of a major financing is taking longer than we anticipated, today's announced bridge financing allows us to continue to gain traction with our business model, while longer term financing is being put in place. We have had tremendous support from those groups that have financed us in the past and we look to continued support from them and others as we strive to achieve our goals."

The Company recognizes the importance of identifying a suitable Chief Financial Officer and will address this void immediately.

About Palcan

The Company is a leading developer and manufacturer of proton exchange membrane (PEM) fuel cell systems under 5 kilowatts and metal hydride hydrogen storage products. The Company's proprietary and patent pending technologies form the core of the PalPac(TM) Power Products. A unique and integrated fuel cell power system aimed directly at low output applications where batteries and smaller internal combustion engines (ICE) are the power source. These include stationary, marine, military and portable power applications. The Company's manufacturing, research and development facilities are located in Burnaby, British Columbia and Jiaxing, China. The Company trades on the TSX Venture Exchange under the symbol "PC".

Certain matters discussed in this press release may contain forward-looking statements that may involve risk and uncertainties. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including but not limited to; product development delays, the ability to attract and retain business partners, competition from other fuel cell manufacturers, competition from existing power technologies, and the ability to provide the capital required for product development, operations and marketing. Investors are encouraged to review the Company's filings on SEDAR at www.sedar.com

The TSX Venture Exchange has neither reviewed nor approved of the contents of this news release.
 
Contacts
  
 
Palcan Power Systems Inc.
Daniel Gallagher
Corporate Communications
Toll Free: 1-866-548-8868 or 604-422-8868
Email: info@palcan.com
URL: http://www.palcan.com