PRECISION OPTICS CORPORATION 22 EAST BROADWAY GARDNER, MASSACHUSETTS 01440-3338 Telephone 978 / 630-1800 Telefax 978 / 630-1487 POC:26-0403 Page 1 of 4 NEWS RELEASE FOR IMMEDIATE RELEASE Wednesday

OPTICS CORPORATION ANNOUNCES

Precision Optics Corporation, Inc. (OTC Bulletin Board: POCI.OB), ("Precision

Optics") today announced operating results on an unaudited basis for the first

quarter of fiscal year 2007 ended September 30, 2006.

Quarter Operating Results

the quarter ended September 30, 2006, revenues were $474,154 compared to

$419,582 for the same period last year, an increase of 13%.

the quarter ended September 30, 2006, net loss was $688,179, or $0.04 per share,

an increase of $128,308 from the net loss of $559,871 or $0.08 per share, for

the same period last year. The net loss for the quarter ended September 30,

included a gain of $165,700, resulting from the sale of equipment previously

used in the Company's discontinued telecommunication business. The increase in

net loss includes a non-cash charge of $58,353 related to stock-based

compensation expense following the implementation of Statement of Financial

Accounting Standards No. 123 revised (SFAS No. 123R) as well as increased sales

and marketing expenses in the quarter ended September 30, 2006. The weighted

average common shares outstanding for the quarters ended September 30, 2006

2005 were 15,458,212 and 7,008,212, respectively.

Flow and Expenditures -

quarter ended September 30, 2006, cash and cash equivalents decreased by

$755,448 compared to a decrease of $539,375 for the same period last year.

receipts during the quarter ended September 30, 2005 included $162,000 received

from the sale of equipment previously used in the Company's discontinued

telecommunication business.

quarter ended September 30, 2006, research and development expenses were

$207,824, compared to $208,111 a year earlier. While these expenses were

virtually unchanged, they reflect a shift from previous activities aimed at

development of new technologies to applications of these technologies for

customer-driven product development. The level of future quarterly R&D

expenses will ultimately depend on the Company's assessment of new product

opportunities and available cash resources.

general and administrative expenses were $483,787 for the quarter ended

September 30, 2006 compared to $424,688 for the same period last year. The

increase was primarily a result of a non-cash charge of $58,353 related to

stock-based compensation expense following the implementation of SFAS No. 123R.

Company expects its recent pattern of quarter-to-quarter revenue fluctuations

continue, due to the uncertain timing of orders from customers and their size

relation to total revenues. The Company continues to move forward with new

products and technical innovations. The Company believes that the recent

introduction of several new products, along with new and ongoing customer

relationships, will generate additional revenues. In

coming months the Company will continue to focus its efforts on marketing

products recently introduced or redesigned. The Company believes that these

marketing activities, if successful, may result in the continuation of its

recent pattern of year-over-year sales growth.

Optics Corporation, a leading developer and manufacturer of advanced optical

instruments since 1982, designs and produces high-quality medical instruments,

optical thin film coatings, and other advanced optical systems. The Company's

medical instrumentation line includes laparoscopes, arthroscopes and

endocouplers and a world-class product line of 3-D endoscopes for use in

minimally invasive surgical procedures. The Company continues to advance

products through technical innovation, including development of: the next

generation (patent pending) of 3-D endoscopes; the extension of Lenslock

technology (patent pending) to its entire line of endoscopes; instrumentation

utilizing the Company's micro-precision lens technology (patent pending) for

optical components; assemblies and endoscopes under 1 mm. Precision Optics

Corporation is registered to ISO 9001:2000, ISO 13485:2003, and CMDCAS Quality

Standards, and complies with the FDA Good Manufacturing Practices and the

European Union Medical Device Directive for CE Marking of its medical products.

The Company's Internet Website is www.poci.com.

OPTICS CORPORATION, INC. AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

THE THREE MONTHS ENDED

30, 2006 AND SEPTEMBER 30, 2005

OPTICS CORPORATION, INC. AND SUBSIDIARIES

statements contained in this news release, including those related to the future

success of Company's newly released products and products under development are

made under "safe harbor" provisions of the Private Securities Litigation Reform

Act of 1995 and involve a number of risks and uncertainties that could

materially affect future results. These risks and uncertainties, many of which

are not within the Company's control, include, but are not limited to, the

uncertainty and timing of the successful development of the Company's new

products; decisions by customers to place orders for the Company's products; the

risks associated with reliance on a few key customers; the Company's ability to

attract and retain personnel with the necessary scientific and technical skills;

the timing and completion of significant orders; the timing and amount of the

Company's research and development expenditures; the timing and level of market

acceptance of customers' products for which the Company supplies components;

performance of the Company's vendors; the ability of the Company to control

costs associated with performance under fixed price contracts; the continued

availability to the Company of essential supplies, materials and services;

the other risk factors and cautionary statements listed from time to time in

Company's periodic reports filed with the Securities and Exchange Commission,

including but not limited to, the Company's Annual Report on Form 10-KSB for

year ended June 30, 2006.