SOURCE: Cygnus eTransactions Group, Inc.

February 13, 2007 08:45 ET

CEO's Letter to Shareholders

ORLANDO, FL -- (MARKET WIRE) -- February 13, 2007 -- Cygnus eTransactions Group, Inc. (PINKSHEETS: CYGT)

Dear Shareholders,

As promised in the letter to shareholders dated July 24, 2006, I am pleased to provide another update to supplement the quarterly public filings that will be available at and at other financial websites.


We have continued to grow our share of recreation and entertainment ticketing markets and sign new agreements. Announcements will be forthcoming over the next few weeks about these new customers. The contract with Six Flags has been of great value to us, and along with other customers, including Cedar Fair Entertainment and Hershey Entertainment and Resorts, has enabled us to finish 2006 with three very strong quarters.

In the payment processing side of the business, we have continued to add new agreements for stand-alone payment processing with several companies and we will be putting additional focus on this area beginning in the second quarter this year. Today, and in the future, this segment of our business will continue to increase revenues for the Company.


The first thing I want to talk about is our upcoming move to a new location. On Thursday, February 15th, we will move to 850 Concourse Parkway South, Suite 150, Maitland, FL 32751. This move will enable us to save over $100,000 annually. We have continued to reduce other operational costs over the last six months and have more initiatives that will bring us even better margins beginning in the second quarter.


We will be introducing new ticketing products and releasing exciting upgrades to current products over the next few months that should enable us to significantly expand our current markets and open several new ones. We will be rolling out powerful enhancements to our Point-of-sale ticketing system for the 2007 season that will give our customers even more flexibility, ease of use, and for the first time in the industry, the ability to manage all of their sales and financial reporting on a single enterprise-wide system. Our e-commerce products continue to lead the market and the enhancements to the e-commerce platform should ensure we remain the leader in this sector.


The Company will be releasing 2006 year-end financials in the next sixty days and they promise to be significantly better than any year in our history. The reduction in our cost of sales and operating costs, coupled with the increase in revenues, allowed us to post a large profit during the last nine months of 2006. Those trends will continue into 2007, and we should post a large profit for the year and into the future.

The Company has continued to look for investment capital to move forward on several initiatives, but we have not yet found an investment partner that fits well with our growth strategy.


The Company has scheduled the financial audit to begin in late March, and expect that it will be finished by the end of the second quarter. While our stock has not performed as well as it should, the Company has positioned itself for the future and is capitalizing on the positive changes we have made to ensure long-term profitability. We believe that the financial market will begin waking up to this fact and that there is no reason we should not experience a very positive movement in the stock this year and beyond. We believe that we will be releasing the restrictions for those shareholders with restricted stock sometime in the second quarter. We hope that you will hold those shares as we continue to strive for long-term appreciation of the price.

I look forward to updating with significant developments via press releases in the near future and throughout the year and, as always, please visit regularly for the latest news.

J. Richard Crowley
Chief Executive Officer
Forward-Looking Statements

Some of the statements contained in this news release constitute forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including changes in general economic, political and business conditions, actions of current and potential competitors, ability to attract new and retain existing customers, and other factors could cause actual results to differ materially from the Company's expectations and these forward-looking statements.

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