Dicom Enters Into Software Purchase Agreement, Loan Agreement And Security Agreement With Principal Shareholder Torchmark Holdings Ltd.

Business Editors

WHITE ROCK, British Columbia--(BUSINESS WIRE)--July 23, 2001

Dicom Imaging Systems, Inc. (OTCBB: DCIM), announced today that it has pledged substantially all of its assets in return for receiving additional funding and a restructuring of previous loans from the company's principal shareholder, Torchmark Holdings Ltd. The terms of the loan include additional funding of $100,000 and a restructuring of a series of previous loans totaling $906,105. This brings the total indebtedness of the Company to Torchmark to $1,006,105. Concurrent with the loan and the restructuring of old debt, Dicom has purchased the source code and other assets related to its dental imaging software products, which it previously licensed from Torchmark, for 5,032,653 shares of Dicom common stock. As a result, Torchmark now owns approximately 51% of Dicom's voting securities.

Commenting on the loan, David Gane, Dicom's Chief Executive Officer, said "Obtaining sufficient cash flow to sustain our operations for the summer and restructuring our old debt is a significant development for Dicom. This loan enables us to continue our operations until September and gives us additional time to seek additional financing, or locate a strategic partner with which to move our business plans forward. Though the loan is short-term and due for repayment on September 3, 2001, we are pleased about this additional commitment from Torchmark.

"Similarly, we feel that acquiring the source code and its related intellectual property was the correct strategic decision and opens up additional options for the Company. Given the difficult financial circumstances surrounding Dicom, the Board has determined that these transactions with Torchmark are the best way to attempt to maximize shareholder value. In the event that Dicom is unable to achieve its business goals in a timely fashion the Board will be forced to review its available options."

Dicom Imaging Systems, Inc. is a provider of DICOM (Digital Imaging Communications in Medicine) compliant imaging software to the dental industry. Dicom intends to set the standard of DICOM compliance in the dental arena by selling copies of its Dental Imaging Suite to dental professionals, laboratories, educational facilities and dental equipment manufacturer and dealers, through direct mail and through partnering arrangements. For more information, visit Dicom's web site at www.dicom-image.com.

NOTE: Information contained in this press release, other than historical information, should be considered forward-looking in nature and is subject to various risks or uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the operating results, performance or financial condition are the company's ability to achieve and manage growth; the company's ability to successfully identify suitable acquisition candidates, complete acquisitions or integrate the acquired business into its operations; the company's ability to attract and retain qualified personnel; the company's ability to develop new services; and other factors discussed in Dicom's filings with the Securities and Exchange Commission The foregoing description of the Software Purchase Agreement, Loan Agreement, and their related transactions do not purport to be complete and are qualified in their entirety in Dicom's Form 8-K filed with the SEC on July 23, 2001, and can be viewed at www.sec.gov.