Transnational Financial Network Announces Agreement to Sell Stock

Transnational Financial Network, Inc. (AMEX:TFN), a
wholesale and retail mortgage banking firm, announced today that its
board of directors had approved the sale to an affiliate of Pegasus
Funds, LLC, a Dallas-based private equity fund, 2,500,000 shares of
its common stock for $0.70 per share and the issuance of a warrant to
purchase 1,650,000 shares of common stock. The exercise price of the
warrant is $0.70 per share, and the warrant's term expires June 30,
2009. It is anticipated that the closing will be around June 30, 2006.
   As part of the transaction, TFN obtained an amendment to its 8
1/2% convertible notes to permit the issuance of up to $5,000,000 of
equity securities without triggering adjustment of the conversion
price of the notes. The interest rate on the note was increased to
10%. In addition, the company's principal stockholders, Joseph and
Maria Kristul, entered into a voting agreement whereby they would vote
for a nominee of Pegasus for the board of directors and Pegasus would
vote for a majority of the board of directors as nominated by the
Kristuls. The voting agreement expires at the earlier of June 1, 2009,
the sale of the company to a third party or the failure of TFN to make
a profit for the twelve months preceding June 1, 2008.
   "We believe our association with Pegasus could be transforming for
our company," said Joseph Kristul, TFN's chief executive officer.
"They are very aggressive, believe that now is the time to initiate a
regional consolidation of the independent mortgage banking industry
and that with the additional capital, and their market support, an
AMEX-listed company like TFN, will be able to be active in this
consolidation."

   Transnational Financial Network, Inc. is a wholesale and retail
mortgage banker that originates, funds and sells mortgage loans
secured by one to four family residential properties. Through its
strong sales and broker service programs, the Company has built a
foundation for growth and expansion, principally in the markets of
Northern California, Southern California and Arizona.

   This News Release may contain "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, and Section
21E of the Securities Exchange Act of 1934. 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 correct.