Alyn Corp. Announces It has Concluded $6 Million in Funding and Provides Business Update.

IRVINE, Calif.--(BUSINESS WIRE)--March 31, 1999--Alyn Corp. (Nasdaq:ALYN), an advanced metal matrix technology company, Wednesday announced it has completed $6 million in capital funding.

The net proceeds to the company of approximately $5.6 million will be used for working capital.

"We are pleased that we have raised the funding that will help us execute our plans for 1999," stated Steven S. Price, president and CEO of Alyn, "although, as with any early-stage technology business, there is still much to be done. We continue to make progress in generating sales and raising production levels and now have the additional financial resources required to accelerate our sales and marketing efforts."

Alyn acted on its own behalf in completing the funding, which consisted of three separate components. New Jersey-based Seaside Partners purchased $1.5 million of Series A Preferred Stock in January 1999; Amro International, of Zurich, Switzerland, and its associated investment partners purchased $1.5 million of Series B Preferred Stock in March 1999; and Talisman Capital, of Little Rock, Ark., provided $3 million in the form of exchangeable debt also in March 1999.

Each of the securities is exchangeable into shares of common stock following holding periods of up to one year. The exchange rates vary from set prices of $3.57 to $4 per share, depending upon the investor, unless upon any exchange date following the holding period, the market price is less than the set price.

In such event, the exchange price varies from market price to 85% of market price, depending upon the investor and the actual holding period. Prior to exchange, the instruments carry interest or dividend rates of 3% to 6%, depending upon the instrument.

"The quality of our new financial partners was an important consideration in choosing the sources of our additional capital," stated Richard L. Little, Alyn's chief financial officer.

"We were seeking investors with long-term perspectives who could also provide assistance beyond capital. Two of our investment partners have already introduced sources of potential new business. We were also pleased with the structure of the investments, particularly given the stage of Alyn's growth."

Price reported that the company is continuing to ramp-up production to meet the company's backlog of orders. As of March 26, 1999, the company had a backlog of booked, but unshipped, orders totaling approximately $4 million, for delivery in the second and third calendar quarters.

This compares with a backlog of approximately $2 million at Dec. 31, 1998. The backlog continues to grow, even while shipments are increasing. Approximately $1.5 million of the current backlog is for orders placed by Van Roon Partners, the company's sales and distribution partner for Europe since December 1998.

The company has completed customer acceptance of, and has shipped, its first large-scale production of neutron absorbing material used for building storage casks for spent nuclear reactor fuel rods. The storage of spent fuel rods represents an extremely large and rapidly growing domestic and international market for Alyn.

The company has begun production of MacGregor Golf's new line of Tourney(R) Boralyn(R) putters, although only the initial customer shipment for production approval is expected in the first quarter. Late start-up on this product is due to delays in the receipt of required weights for the clubs, which have only recently begun to arrive.

The company expects large-scale production to begin in the second quarter, as the customer's indications of market demand for the new, high-tech putters rise. The ultimate sales volume will be determined by retail "sell-through" and the company's ability to produce the required quantities on a timely basis. Alyn's production of the Carbite Polar Balanced(R) Boralyn putter is scheduled for early in the second quarter.

The company has also completed shipments of its initial production orders for several aerospace hard-alloy aluminum applications, including helicopter ejection seat rails, missile launch gantries and skid rails for cargo containers for commercial aircraft. These orders are expected to be pre-cursors to transition from hard-alloy aluminum to Boralyn.

Alyn provides engineered solutions through metal matrix technology to meet the needs of its customers in consumer and industrial markets. Alyn is a vertically integrated company offering advanced metal matrix composites, customer-driven engineering solutions and strategically developed manufacturing processes.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are fluctuations in quarterly operating results, limited historical revenues and prior losses, the company's limited manufacturing history, market acceptance of the company's products in commercial quantities, the need for future capital, rapid technological change and new product development, competition and other factors detailed in the company's filings with the Securities and Exchange Commission, including its filings on Form 10-K for the year ended Dec. 31, 1997; its registration statement on Form S-3/A, filed with the Commission on July 15, 1998; and its filing on Form 10Q for the quarter ended Sept. 30, 1998.