LynuxWorks Reports Positive cash flow and Sequential Quarterly Growth

LynuxWorks raises $4 million in bridge funding

SAN JOSÉ, Calif.—June 3, 2002—LynuxWorks™, the technology leader in the embedded software solutions market, today reported sequential quarter-over-quarter revenue growth for Q3 fiscal year 2002 and Q4 fiscal year 2002 (ending April 30, 2002). The company attributed the growth to increased activity in the military/aerospace markets and a solid business model. LynuxWorks also reported that recent restructuring and revenue growth has enabled the company to become cash-flow positive. The company also announced it has raised $4 million in bridge funding and is in negotiations with venture companies for additional funding. The additional funds will be used to take advantage of upcoming opportunities in various vertical market segments.

"Contrary to the negative stories we've been hearing about companies offering embedded Linux®, I feel we're managing our way successfully through the economic downturn. We attribute our financial stability to the strong momentum of embedded Linux combined with our strategy of diversifying revenue streams from the compatible suite of LynxOS® and BlueCat® Linux embedded operating systems combined with our commercial grade tools and world-class service offerings," said Inder Singh, CEO and chairman for LynuxWorks. "We are confident that our current financial health, funding and our ongoing innovation, will position us for continued growth projected for the industry."

About LynuxWorks

LynuxWorks, the technology leader in the embedded software market, provides complete solutions that incorporate operating systems, software development products and services for the world's most successful communications, aerospace/defence, and consumer products companies. Established in 1988, the company is a founding member of the real-time operating systems (RTOS) industry, and a leading participant in the Embedded Linux Consortium (ELC). LynuxWorks' headquarters are located in San José, California. The company focuses on leading the embedded software market in performance and openness and its products include the open-source BlueCat Linux and the scalable, Linux-compatible LynxOS real-time operating system. World-class companies use LynuxWorks' products, including: 3Com, Alcatel, Boeing, Ericsson, Hewlett Packard, Jet Propulsion Laboratory, Lockheed Martin, Lucent Technologies, Marconi, Mitsubishi, Motorola, NEC USA, Raytheon, TRW and Xerox.

Linux is a registered trademark of Linus Torvalds. LynuxWorks, LynxOS and BlueCat are trademarks of LynuxWorks, Inc. All other brand names and trademarks mentioned in this document are the properties of their respective holders.

LynuxWorks press contacts

Kirsten Long Director, Marketing Communications LynuxWorks, Inc. USA +1 408-979-4404	Barbara Stewart Patterson & Associates USA 480-488-6909
Hamid Mirab Managing Director EMEA LynuxWorks Ltd. United Kingdom +44 208-906-9506	Peter van der Sluijs Neesham Public Relations Europe +44 1442-879222