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[July 19, 2004]

Crown Medical Systems Inc., a Nevada Corporation, to Combine with Crown Medical Systems Inc., a Delaware Corporation

EL PASO, Texas --(Business Wire)-- July 19, 2004 -- Crown Medical Systems Inc., a Nevada corporation (OTCBB:CWMS) ("Crown Nevada"), announced today that it has entered into a Letter of Intent for a business combination with Crown Medical Systems Inc., a Delaware corporation ("Crown Delaware"). Upon completion of the acquisition, the stockholders of Crown Delaware will own a majority of the equity and voting rights of Crown Nevada.


The Business Combination. The reorganization shall be structured so that a newly formed, wholly owned subsidiary of Crown Nevada ("Merger Sub") shall merge with and into Crown Delaware in consideration of the issuance of equity securities of Crown Nevada to all of the shareholders of Crown Delaware. As a result, Crown Delaware will become a wholly owned subsidiary of Crown Nevada following the merger of Merger Sub with and into Crown Delaware with Crown Delaware surviving the merger.

Closing of the transaction is subject to the customary definitive agreement, due diligence by both parties and other matters usually associated with business combinations.

About Crown Delaware. Crown Delaware, incorporated under the laws of Delaware on July 20, 2001, provides to hospitals, clinics and physician offices turnkey software, hardware, encryption, installation services, on-site training, on-site technical service and 24/7 help desk support required to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Crown Delaware provides products and services to hospitals, clinics and physician offices through national distribution agreements with five specific service providers. We offer an integrated healthcare hardware and software solution to identify and meet the specific needs of customers in assessing and implementing HIPAA compliance.

Crown Delaware's principal office is in El Paso, Texas. Crown Delaware presently has 9 full-time professionals, 7 board members (3 external) and a board of advisors.

Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward-looking statements. The realization of any or all of these expectations is subject to a number of risks and uncertainties and it is possible that the assumptions made by management may not materialize.

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