RateXchange Corporation Estimates 2003 Revenue of $12 Million and Profitability by the Fourth...

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 22, 2003

RateXchange Corporation (AMEX:RTX) announced today that for calendar 2003, the Company estimates revenue of $12 million and expects to be GAAP profitable by the fourth quarter of this year. This estimate is based

The revenue estimate of $12 million for 2003 represents approximately 85% growth compared to revenue in 2002. RateXchange expects to report revenue of approximately $6.5 million for calendar 2002. Based on this anticipated revenue growth, the Company expects to reach profitability in the fourth quarter of 2003.

For 2002, RateXchange Corporation exceeded its forecast of $5 million to $6 million in revenue. 2002 marked a successful transition to a rapidly growing brokerage firm focused on the trading, researching, advising and financing of emerging companies.

"We are very optimistic about the outlook for 2003 and feel there are tremendous opportunities for us due to the change in focus or disappearance of many middle market investment banks. There are close to 5,000 publicly traded companies with market capitalizations under $1 billion and as one of the few remaining players serving this market, we have a huge opportunity to provide services to these companies and give them exposure to our institutional clients," said Jon Merriman, CEO of RTX Securities.

"In addition, I am very pleased with the results of our sales and trading execution in 2002," added Mr. Merriman. "RTX Securities continues to grow its sales, trading, research and banking groups while adhering to strict cost control disciplines. The Company is adding to its roster of dedicated professionals with the goal of establishing relationships with more institutional investors and more management teams of emerging growth companies. The Company expects to continue to grow its commission business as well as develop a larger corporate finance practice based on both advisory and transaction services."

"We also expect to continue expanding our market making activities in small capitalization growth stocks, which has been profitable and, pending regulatory approval, moving into underwriting initial public offerings and follow on offerings for our corporate clients," concluded Mr. Merriman.

About RateXchange Corporation and RTX Securities

RTX Securities, a wholly-owned subsidiary of RateXchange Corporation (AMEX:RTX), is a securities broker-dealer and investment bank focused on emerging growth companies and growth-oriented institutional investors. RTX Securities provides sales and trading services primarily to institutions, as well as advisory and investment banking services to corporate clients. The mission of the Company is to become a leader in researching, advising, financing and trading of emerging growth equities. RTX Securities is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. For more information please visit www.rtxsecurities.com.

Note to Investors

This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on October 30, 2002. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.