CBay Acquires Advanced Transcription Services
Annapolis, Maryland, August 28, 2002.

CBay Systems, Ltd. (“CBay”), the healthcare business process outsourcing company announced today that it has acquired the business and assets of Advanced Transcription Services, Inc. (“ATS”) of Taylor Michigan for cash and stock. CBay thereby adds $5 million in annual revenue to its growing national transcription service.

“We are excited about the foothold that Advanced brings us in the Detroit area,” said Skip Conover, President of CBay. “We will continue to work with the founder of ATS, Ms. Venia Cleek, who will serve as President, ATS Division of CBay Systems, Ltd. effective immediately.”

“We at ATS are very excited about the technology and financial support that CBay will add to the ATS operations,” Ms. Cleek commented. “We were concerned that a smaller transcription service cannot satisfy the many privacy and security provisions of HIPAA, but with CBay’s two major medical transcription platforms, and enhanced financial muscle, we believe that we can enhance the business in the Detroit area very substantially. CBay’s A+ Network collaboration with Arrendale Associates, Inc. gives us an end-to-end solution for hospital clients, which can be provided without capital investment on the part of the clients.”

“We are also proud to be working with a highly ethical and professionally committed company, which has taken the trouble to have KPMG LLP certify that its billing methods are completely transparent and ethical,” Ms. Cleek went on. “The KPMG White Paper, which can be found on CBay’s web site (www.cbayusa.com), provides two case studies of how CBay’s methods have saved two Florida hospitals $1 million in medical transcription costs over three years. It is a pleasure to work with an organization that is so committed to quality and value added services for its clients.”

Mr. Conover went on that CBay intends to implement all of its state-of-the-art transcription technology at all ATS clients by the end of 2002, well in advance of the April 14, 2003, deadline for compliance with the Privacy provisions of HIPAA. He also emphasized that working with CBay’s CBayScribe Division, ATS Division will be offering HIPAA client solutions to Detroit’s clinical and doctor’s office market segment.