Cygnal Technologies Corporation Announces Debt Financing



    MARKHAM, ON, June 1 /CNW/ - Cygnal Technologies Corporation ("Cygnal" or
the "Company") (TSX: CYN), a leading Canadian provider of network
communication solutions, today announced the completion of a US$2.0 million
debt financing.
    The Company entered into a financing arrangement with Laurus Master Fund,
Ltd. for US$2.0 million secured by the assets of the Company's Network
Solutions business. The security agreement provides for the issuance of a
secured note bearing interest at 2.0% above US prime, convertible into common
shares of the Company, and the issuance of warrants to purchase up to 527,362
common shares of the Company. The secured note matures May 31, 2010, and is
convertible into common shares of the Company at a conversion price of CDN
$0.56. The warrants have a term of five years and are exercisable at an
exercise price of CDN $0.73 per share.
    The net proceeds from the financings will be used for general corporate
purposes.

    About Cygnal

    Cygnal Technologies Corporation is a leading Canadian provider of network
communication solutions including the design, integration, installation,
maintenance and management of wired and wireless communication networks. The
Company offers a full range of technologies and solutions for service
providers and enterprise customers. Cygnal has expertise in voice, video and
data solutions over traditional and next generation converged technologies.
    Cygnal is headquartered in Markham, Ontario and supports end-user
customers and business partners through 12 offices across Canada, including
Vancouver, Edmonton, Calgary, Winnipeg, London, Burlington, Toronto, Ottawa,
Montreal, Quebec City and Halifax. Cygnal common shares are listed on the
Toronto Stock Exchange under the symbol CYN.

    This news release contains forward-looking statements. Often, but not
always, forward looking statements can be identified by the use of words such
as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or state
that certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance, events or achievements of Cygnal to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Examples of such statements
include, but are not limited to: factors relating to trends in the
communications equipment and services industry, including (1) Cygnal's ability
to maintain and grow its revenues; (2) the opportunity for greater competition
to build network infrastructure; (3) the trend toward building next generation
core networks; (4) outsourcing by businesses of the design, build and
maintenance of their network infrastructure; and (5) an increased demand for
private broadband networks. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the
forward-looking statements contained in this news release. Such
forward-looking statements are based on a number of assumptions which may
prove to be incorrect, including, but not limited to: Cygnal's ability to meet
its obligations under its debt facilities; full implementation of Cygnal's
cost reduction plan; Cygnal's ability to compete and to adapt to technological
development; the continuation of the Company's relationships with its
suppliers; Cygnal's ability to recruit and retain qualified personnel; the
continuation of positive economic and market conditions, and the ability of
provisions in service agreements to limit exposure to potential claims. While
Cygnal anticipates that subsequent events and developments may cause its views
to change, Cygnal specifically disclaims any obligation to update these
forward-looking statements. These forward-looking statements should not be
relied upon as representing Cygnal's views as of any date subsequent to the
date of this news release.
    Although Cygnal has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. These factors are not intended
to represent a complete list of the factors that could affect Cygnal.

    %SEDAR: 00000748E




For further information:

For further information: James Shannon, Vice-President & CFO, Cygnal
Technologies Corporation, (905) 944-6572, jshannon@cygnal.ca; Jeff Codispodi,
Investor Relations, The Equicom Group Inc., (416) 815-0700 ext. 261,
jcodispodi@equicomgroup.com

Organization Profile

CYGNAL TECHNOLOGIES CORPORATION

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