Precision Optics Corporation Announces First Quarter Results and Receipt of Significant...(st year. Research and development exp...),Health

Research and development expenses were $302,433 for the quarter ended September 30, 2007, compared to $264,523 for the same period last year.

Selling, general and administrative expenses were $475,512, a decrease of $7,512, or 2% for the quarter ended September 30, 2007 compared to the same period last year.

Outlook

Based on the current financial condition of the Company and the expectation of future continued quarterly operating losses during fiscal 2008, management is currently investigating and evaluating alternatives for raising additional capital through private and public debt and equity offerings that can be completed during the second or third quarters of fiscal 2008. In an effort to decrease operating expenses, the Company has recently begun implementing cost containment plans including work force reductions, deferring of certain development initiatives and focusing on a limited number of products and technologies expected to provide near term revenues.

Recent initiatives in the area of micro-precision(TM) lenses address specific customer opportunities in different medical specialty applications.

Since December 2005, 2.7 mm diameter ENT endoscopes have been in production and a 4 mm diameter sinuscope was introduced earlier this year. Presently we are announcing the recent availability of a new 5 mm diameter laparoscope, to be followed in early spring of 2008 by a new widefield arthroscope. In other market areas, our lenses for the new "Color Night Vision System" are to be in pre-production manufacture within the next few months, including new light weight eyepiece lenses and a new pre-production order for additional objective lenses.

New Order

The Company has also recently received a production order of over $400,000 for its new line of optical thin film coatings, developed over the past two years, following pre-production orders delivered earlier this year.

Not withstanding the need to obtain a
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