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PMED News Paradigm Medical Reports Higher Second Quarter Sales; Loss Increases Slightly on P60 UBM Launch Expense

-- OPERATING HIGHLIGHTS

-- Net sales increase by 10% from year-ago period and 68% from first-quarter 2005.

-- "Adjusted" operating profit loss increases by $174,000 from year-ago period and $84,000 from first quarter, based on higher cost of sales, lower Blood Flow Analyzer (BFA) volume, launch expense, and product mix.

-- Monthly sales trends improve during the second quarter; similar trends seen in third quarter.

Paradigm Medical Industries, Inc. (OTCBB: PMED.OB/PMEDW.OB) today announced steady operating results for the second quarter and first six months, ended June 30, 2005. Reported results were adversely impacted by one-time, nonrecurring items.

"Our second quarter adjusted operating results were relatively stable with the year-ago period and prior three months, despite substantial increases in expenses related to the launch of our new-generation P60 ultrasound biomicroscope (UBM)," said Paradigm Medical's Chief Executive Officer, John Y. Yoon. "Initial orders have been placed internationally and we expect to generate sales beginning in the second half of the year."

Second-quarter 2005 revenues were $885,000, up 10% from the year-ago period and 68% from the first three months of the year. "Our family of UBM devices showed significant improvement," Mr. Yoon added. "Sales of our older generation P40 and P45 UBM were $535,000 and accounted for more than 60% of total revenues."

Mr. Yoon noted that sales of Blood Flow Analyzers (BFA) continued to decline from a year ago, due mainly to poor industry conditions and a major internal change in the Company's sales force. "We have been more focused on the P60 launch and sustained a short-term decline in BFA activities. We will be addressing the changing dynamics in our BFA line for the rest of the year."

Paradigm Medical's operating expenses (general and administrative, marketing and selling, research and development) totaled $825,000 during the second quarter of 2005, compared with $456,000 in the year-ago period. Second-quarter 2004 operating expenses benefited from a warranty reserve reduction of $308,000. Consequently, the year-to-year increase in such expense was only $61,000. Second quarter "adjusted" 2005 operating expenses increased by $177,000 from the first three months of the year.

"The major factor behind the increase was higher expenses associated with launching the P60," Mr. Yoon said. "We will likely see some reduction in general and administrative expense during the last six months of the year as we cut into fixed costs."

Mr. Yoon noted that "We are continuing to make good progress in achieving our goal of improving our financial and operating performance. During the first six months of 2005 we have

-- Received U.S. and international regulatory approval to market the P60, strengthening the Company's position as one of the leading biomicroscope device organizations in the world

-- Re-established and reinforced tight quality control initiatives that have resulted in substantial cost savings and a higher level of service and performance to our customers

-- Completed a $2.5-million financing involving the sale of secured convertible notes. Proceeds will be used to step-up sales and marketing of the P60 and to expand our research and development activity, especially in the development of a new generation BFA."

Paradigm Medical Industries, Inc., currently develops, manufactures and markets surgical and diagnostic high-tech, proprietary equipment and consumable products for the medical industry. The Company's corporate headquarters are located at 2355 South 1070 West, Salt Lake City, Utah 84119. Call (801) 977-8970 or visit us at www.paradigm-medical.com.

This press release contains statements that, if not verifiable historic fact, may be viewed as forward-looking statements that could predict future events or outcomes with respect to Paradigm and its business. The predictions embodied in these statements will involve risk and uncertainties and, accordingly, actual results may differ significantly from the results discussed or implied in such forward-looking statements.