Case Financial, Inc. Announces Second Quarter and Six-Month Results; 19% Increase In Revenues And 21% Decrease In Operating Costs Before One-Time Merger Compensation Costs.

Business Editors

SHERMAN OAKS, Calif.--(BUSINESS WIRE)--Aug. 22, 2002

Case Financial, Inc. (OTCBB:CSEF) announced financial results for the second quarter and six months ended June 30, 2002.

For the quarter, the Company reported revenues of $222,259, an increase of $71,983 or 48 percent, a loss from operations of ($947,935) which includes one-time, non-cash merger compensation costs of $607,500, and a net loss of ($1,046,057), or ($0.09) per share. For the same period last year the Company reported revenues of $150,276, a loss from operations of ($439,441) and a net loss of ($623,434), or ($0.07) per share, in the same period last year.

Revenues for the first six months of 2002 were $381,901, an increase of $60,008 or 19 percent, loss from operations totaled ($1,072,823) and the Company reported a net loss of ($1,349,855), or ($0.13) per share, as compared with revenues of $321,893, a loss from operations of ($746,892) and a net loss of ($1,068,845) or ($0.12) per share in the same period in 2001.

Eric A. Alden, Chief Executive Officer, said, "This represents our first financial reporting including the completion of the reverse acquisition on May 24, 2002. That transaction accomplished many of our financial goals, including replacing $4.2 million of very expensive debt with $700,000 of 8 percent debt, and adding approximately $1.4 million in working capital. In addition, relative to the first six months of 2001, we've grown revenue by 19 percent, reduced general and administrative costs by 32 percent, and reduced recurring operating costs by 21 percent overall. We're now running a leaner more efficient operation.

"The marketplace appears to be responding favorably to our programs, and we are in active discussions for both bank and other debt/equity financings in order to support our growth. Fueled by the contemplated funding, our plans call for aggressively growing market share and extending into new segments of the litigation funding business," continued Alden.

"We are pleased to report that the dollar average of our advances is increasing, and, more significantly, that the average settlement cycle is nearly 33 percent faster than in 2001. These factors are enabling us to achieve greater annualized ROI on our investments, as well as to service a larger portion of the market with existing resources," Alden concluded.

Founded in 1998, Case Financial is one of California's leading litigation funding companies, providing pre-settlement advances to law firms, plaintiff attorneys and their clients. The Company makes investments in personal injury cases and other types of litigation through non-recourse advances basing its funding decision and the pricing of its fees on an underwriting risk analysis and estimate of settlement timing. The non-recourse cash advances and fees are collateralized by the proceeds of each legal settlement and are repaid when a case is settled or favorably adjudicated in court.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this news release that are not historical facts are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. The forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors. These factors include, without limitation, the Company's lack of profitability, the Company's need for financing, the Company's relatively brief operating history, the uncertainty of litigation outcomes, the length of the Company's collection cycle, the Company's ability to collect upon the judgment recovery, and future legislation including tort reform that may potentially affect the Company's business. For a detailed discussion of some of the ongoing risks and uncertainties of the Company's business, see the Company's filing with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                         FINANCIAL HIGHLIGHTS

                                  Second Quarter Ended June 30,
                                       2002              2001

Revenues                             $ 222,259        $  150,276
Merger Compensation Costs             (607,500)               --
Net (Loss) from Operations            (947,935)         (439,441)
Net (Loss)                          (1,046,057)         (623,434)
(Loss) Per Share
   Basic                                 (0.09)            (0.07)
   Diluted                               (0.09)            (0.07)
Weighted Average Shares Outstanding  11,510,693         8,735,408


                                       Six Months Ended June 30,
                                         2002             2001

Revenues                             $  381,901      $  321,893
Merger Compensation Costs              (607,500)             --
Net (Loss) from Operations           (1,072,823)       (746,892)
Net (Loss)                           (1,349,855)     (1,068,845)
(Loss) Per Share
   Basic                                  (0.13)          (0.12)
   Diluted                                (0.13)          (0.12)
Shares Outstanding                    10,130,717       8,735,408