DALLAS, Oct. 25 /PRNewswire-FirstCall/ -- Claimsnet.com inc. (OTC:CLAI) (BULLETIN BOARD: CLAI) , a leading provider of Internet-based business-to-business solutions for the healthcare industry, today reported its results for the third quarter of fiscal 2005, which ended September 30, 2005. For the quarter ended September 30, 2005, the Company reported revenues of $329,000, a 13% increase compared to the $291,000 reported for the third quarter of 2004. Cost of revenues for the third quarter of 2005 was $212,000 compared to $184,000 for the third quarter of fiscal 2004, a 15% increase. There were no research and development expenses incurred during the third quarter of 2005 or the third quarter of 2004. Selling, general and administrative expenses of $153,000 were reported for the third quarter of 2005, representing a 41% reduction from the $258,000 reported for the third quarter of 2004. The Company reported a gross profit increase of 9%, or $117,000 for the third quarter of 2005, compared with a $107,000 gross profit for the third quarter of 2004. The loss from operations for the third quarter of 2005 was $(36,000), a 76% decrease from the loss of $(151,000) reported for the third quarter of 2004. The net loss for the third quarter of 2005 was $(48,000), or $(.00) per share, compared to net loss of ($156,000), or $(.01) per share, for the third quarter of 2004. "While we are pleased by the increase in revenue over last year, we have been focused on the reduction of the operating loss and being able to report a 76% decline in the operating loss is gratifying. We are thankful to each of our employees who have worked to make this possible, as it has come about because of an overall increase in the productivity of the company, as overall expenses declined by 17% while revenue increased 13% compared to the prior year. Now that the company is close to operational breakeven, focus is again being placed on revenue growth that leverages our technology and which is the key to our success going forward," commented Don Crosbie, chief executive officer of Claimsnet. Claimsnet.com inc. is a leading provider of Internet-based claim processing solutions for the healthcare payer industry, including distinctive, advanced ASP technology. Headquartered in Dallas, Claimsnet offers systems that are distinguished by ease of use, customer care, security and measurable cost advantages. More information on Claimsnet can be found at the Company's web site at http://www.claimsnet.com/ . Safe Harbor Statement Under the Private Securities Litigation Act 1995 - With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of the Company could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to, maintaining access to external sources of capital, regulatory actions, success of marketing strategies, actions of the Company's competitors, dependence on suppliers and distribution channels, and continued use of the internet. Further information on the Company's risk factors is contained in the Company's quarterly, annual, and other periodic reports as filed with the Securities and Exchange Commission. [Table to Follow] CLAIMSNET.COM INC. AND SUBSIDIARIES SUMMARY OPERATIONS STATEMENT INFORMATION (In thousands except per share data) Quarter Ended September 30, 2005 2004 REVENUES $ 329 $ 291 COST OF REVENUES $ 212 $ 184 GROSS PROFIT $ 117 $ 107 RESEARCH AND DEVELOPMENT $ --- $ --- SELLING, GENERAL AND ADMINISTRATIVE $ 153 $ 258 LOSS FROM OPERATIONS $ (36) $ (151) INTEREST EXPENSE $ (12) $ (5) NET LOSS $ (48) $ (156) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $(0.00) $(0.01) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED 25,976 25,014 DATASOURCE: Claimsnet.com inc. CONTACT: Don Crosbie of Claimsnet.com inc., +1-972-458-1701 Ext. 112, or Web site: http://www.claimsnet.com/

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