Claimsnet.com Reports Third Quarter 2003 Results; Including 35% Sequential Increase in Revenue DALLAS, Oct. 29 /PRNewswire-FirstCall/ -- Claimsnet.com inc. (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 and first nine months of fiscal year 2003, which ended September 30, 2003. For the quarter ended September 30, 2003, the Company reported revenues of $230,000, a sequential increase of 35% from the second quarter. Revenues reported for the third quarter 2002 were $285,000, which included $229,000 generated by client contracts that were assigned in an asset sale in September 2002. Expenses decreased significantly from the prior year. Cost of revenues was $115,000 compared to $446,000, a 74% decrease. Research and development expenses were $10,000, down 81% from the $54,000 reported in the third quarter 2002. Selling, general and administrative expenses of $308,000 were reported for the third quarter 2003, representing a 30% reduction from the $441,000 reported in the third quarter 2002. The Company reported a gross profit of $115,000 for the quarter compared to a gross loss of $(161,000) reported in the third quarter 2002. The loss from operations for the third quarter 2003 was $(203,000), a decrease of 69% compared to the $(656,000) loss from operations reported in the third quarter 2002. The net loss for the third quarter 2003 was $(239,000), or $(.01) per share, compared to a loss of $(22,000), or $(.00) per share, reported in the third quarter 2002, which included a $640,000 gain from sale of assets. "As a result of both our refocused business model and our continued emphasis on expense control, we were pleased to report a gross profit for the first time in the Company's history," commented Don Crosbie, chief executive officer of Claimsnet. "In this quarter we also benefited from some of the previously announced contract signings, which along with the cost controls, has led to a 60% operating loss reduction from the second quarter." The Company received net proceeds of $200,000 during the third quarter 2003 from the sale of 1,000,000 shares of newly issued common stock. These investors also received warrants to acquire an additional 1,000,000 shares of common stock at a price of $.20 per common share. Also during the quarter, the Company issued 1,939,000 shares of common stock to holders of 1,939 shares of preferred stock upon their election to exercise conversion rights. 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. [Tables to Follow] CLAIMSNET.COM INC. AND SUBSIDIARIES SUMMARY OPERATIONS STATEMENT INFORMATION (In thousands except per share data) Quarter Ended September 30, 2003 2002 REVENUES $ 230 $ 285 COST OF REVENUES $ 115 $ 446 GROSS PROFIT (LOSS) $ 115 $ (161) RESEARCH AND DEVELOPMENT $ 10 $ 54 SELLING, GENERAL AND ADMINISTRATIVE $ 308 $ 441 LOSS FROM OPERATIONS $ (203) $ (656) GAIN (LOSS) ON SALE OF ASSETS $ (31) $ 640 NET LOSS $ (239) $ (22) NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.01) $ (0.00) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED 20,537 12,707 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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