The Company continues to explore potential
applications of single-molecule technology and nanotechnology , as well as
potential near-term applications of the Company's existing technologies in
non-medical markets.poci. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
MARCH 31, 2005 AND 2004
(UNAUDITED)

Three Months Nine Months
Ended March 31, Ended March 31 ,
2005 2004 2005 2004

REVENUES $326,272 $313,698 $987,604 $1,179,388

COST OF GOODS SOLD 369,232 467,178 1,298,187 1,514,966

Gross Profit (Loss) (42,960) (153,480) (310 ,583) (335,578)

RESEARCH and
DEVELOPMENT 330,743 379,518 910 ,218 980,694

SELLING, GENERAL and
ADMINISTRATIVE
EXPENSES 459,284 436,666 1,393,450 1,320,324

PROVISION FOR
RESTRUCTURING - 52,208 - 52,208

Total Operating
Expenses 790,027 868,392 2,303,668 2,353,226

Operating Loss (832,987) (1,021,872) (2,614,251) (2,688,804)

INTEREST INCOME 13,071 4,560 39,998 16,302

INTEREST EXPENSE - - - (49)

Net Loss $(819,916) $(1,017,312) $(2,574,253) $(2,672,551)

Basic and Diluted
Loss Per Share $(0.

wedges comparator

Two major imaging sensor components of the
CRISM instrument were designed and fabricated by Rockwell Scientific
Company. The
Visible subsystem uses a silicon photodiode array with a 380-1050 nm
spectral bandpass and a 2-zone order sorting filter .com.

marmore fisheye

Government and
private sector companies, as well as the manufacturing and sale of
high-value products and licenses closely related to its R&D efforts. GARDNER, Mass.

prisms viewfinders

The MWIR sensor is a mercury cadmium telluride
(HgCdTe) array with 640 (spatial) x 480 (spectral) pixel format for high
resolution with a 980nm to 3960nm spectral bandpass. The combination of
the high-resolution sensors and the multi-zone order sorting filters
provides the CRISM instrument a greater capability to map spectral
variations than any similar instrument sent to Mars.

"We are very excited to have played a significant role in this project,"
says Jianmei Pan, Program Manager of the CRISM program at Rockwell
Scientific. Its range of activities includes U.

Third Quarter Operating Results
Revenues - For the quarter ended March 31, 2005, revenues were $326,272
compared to $313,698 for the same period last year, an increase of 4.

Nine Months Operating Results
Revenues - For the nine months ended March 31, 2005, revenues were
$987,604 compared to $1,179,388 for the same period last year, a decrease of
16.3%.

Cash Flow and Expenditures
For the quarter ended March 31, 2005, the Company's cash used in operating
activities was $779,329, compared to $753,564 for the previous quarter ended
December 31, 2004.

Outlook
The Company expects its recent pattern of quarter-to-quarter revenue
fluctuations to continue, due to the uncertain timing of orders from customers
and their size in relation to total revenues. The Company is
also exploring new initiatives in single-molecule technology and
nanotechnology for biomedical and other applications.

klarmann edgers

, CRISM will search for
evidence of minerals that form in the presence of water, which might have
been left by hot springs, thermal vents, lakes, or ponds far back in Mars'
history when water may have been present on the surface. The weighted average common shares
outstanding for the nine months ended March 31, 2005 and 2004 were 6,662,916
and 1,752,053, respectively. 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. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED )

ASSETS

March 31, 2005 June 30, 2004
CURRENT ASSETS
Cash and Cash Equivalents $3,037,921 $343,260
Accounts Receivable, Net 137,606 80,195
Inventories 798,228 917,998
Prepaid Expenses 101,975 80,646
Deferred Financing Costs - 171,885
Total Current Assets 4,075,730 1,593,984
PROPERTY AND EQUIPMENT 4,228,648 4,199,835
Less: Accumulated Depreciation (4,048,133) (3,920,593)
Net Property and Equipment 180,515 279,242
OTHER ASSETS 222,472 224,088
TOTAL ASSETS $4,478,717 $2,097,314

LIABILITIES AND STOCKHOLDERS' EQUITY

TOTAL CURRENT LIABILITIES $515,015 $593,342

STOCKHOLDERS' EQUITY
Common Stock, $.

lenses beamsplitters

RSC has meshed its diverse engineering
expertise in sensor and readout integrated circuit (ROIC) design to offer
complete sub-system packages that incorporate state-of-the-art sensors with
custom mixed-signal CMOS ROIC design and fabrication. Future capital
expenditures will depend on future sales and the success of ongoing research
and development efforts. The Company continues to move
forward with new products and technical innovations, in particular, the
development of a new prototype 2. 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; the risks associated
with reliance on a few key customers; the Company's ability to maintain
compliance with requirements for continued listing on the NASDAQ SmallCap
Market; 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;
and the other risk factors and cautionary statements listed from time to
time in the 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 the year ended June 30, 2004 .

pinholes viewfinders

The visible and
infrared spectrometers will track regions on the Mars surface and map them
at scales as small as 60 feet across, from an altitude of 186 miles.3 micron ultra-violet to 18 micron long-wave
infrared for defense, astronomy/scientific, and commercial applications. (Nasdaq: POCI ) today announced operating results on an
unaudited basis for the third quarter of fiscal year 2005 ended March 31,
2005.
For the quarter ended March 31, 2005, research and development expenses
were $330,743, down 12.

prisms reflexite

"

RSC is world renowned for their high performance sensor designs.

9% from the preceding quarter ended
December 31, 2004.

diffractive omek

The Company is currently developing specialty instruments incorporating
its patent-pending LENSLOCK(TM) technology, which we believe may result in
lower cost, easier repairability and enhanced durability, as well as ultra-
small instruments (some with lenses less than one millimeter in diameter)
utilizing patent-pending micro -precision(TM) lens technology.

comparator magnifiers

About Precision Optics
Precision Optics Corporation , a leading developer and manufacturer of
advanced optical instruments since 1982, designs and produces high-quality
optical thin film coatings, medical instruments, and other advanced optical
systems .58) $(0.01 par value-
Authorized -- 20,000,000 shares
Issued and Outstanding - 7,008,212
shares at March 31, 2005 and
1,752,053 shares at June 30, 2004 70,082 17,521
Additional Paid-in Capital 32,751,597 27,770 ,175
Accumulated Deficit (28,857,977) (26,283,724)
Total Stockholders' Equity 3,963,702 1,503,972
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $4,478,717 $2,097,314

Forward-looking statements contained in this news release, including those
related to the Company's products under development and revenue estimates,
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.

fresnel doric

PRESS RELEASE Rockwell Scientific Supplies Sensor Subsystem to Johns Hopkins APL -Built Mars Instrument

A visible-infrared hyperspectral mapper developed by the Johns Hopkins
University Applied Physics Laboratory in Laurel, Md. CRISM will also
aid in mapping the geology , composition and stratigraphy of Mars' surface
features. Rockwell Scientific contributed both a Mid -Wave Infrared (IR) and
Visible IR subsystems to the project.

weco reticles

53)

Weighted Average
Common Shares
Outstanding 7,008,212 1,752,053 6,662,916 1,752,053

PRECISION OPTICS CORPORATION, INC.

viewfinders weco

"CRISM plays such an important role in Mars exploration , and
our sensor systems are critical in collecting the data to identify the
sites most likely to have contained water and which would make the best
potential landing sites for future Mars exploration missions.
Additional information can be obtained at www.

marmore magnifiers

0%.58 per share, for the same period last
year. The level of future
quarterly R+D expenses will ultimately depend on the Company 's assessment of
new product opportunities. These new initiatives accounted for
approximately 15% of total Company revenues in each of the quarter and nine
months ended March 31, 2005.7 mm endoscope , and new instruments utilizing
the Company's new micro-precision(TM) lens technology (patent pending ) for
endoscopes under 1 mm. The Company's Internet Website is http://www.12) $(0.

magnifiers omek

4% from the same period in 2004.

lens lenses

The MWIR subsystem is comprised of a
MWIR sensor and a 3-zone order sorting multi-layer interference filter
packaged in a cold shield. They
continue to develop focal plane arrays (FPAs) that operate within a broad
spectrum of light from below 0.
Revenues in the quarter decreased 17.12 per share, an improvement of $197,396 in spite of nearly flat revenues,
from the net loss of $1,017,312, or $0.
Precision Optics Corporation is certified to the ISO 9001 Quality
Standard, and complies with the FDA Good Manufacturing Practices and the
European Union Medical Device Directive for CE Marking of its medical
products.

PRECISION OPTICS CORPORATION , INC.

weco omek

CRISM (Compact Reconnaissance Imaging
Spectrometer for Mars) is one of six scientific instruments on NASA's Mars
Reconnaissance Orbiter launched from Cape Canaveral Air Force Station in
Florida on August 12, 2005.
Its highest resolution is about 20 times sharper than any previous look at
Mars in mid-wave infrared wavelengths, and boasts 5 times better spatial
resolution than any previous look in the thermal infrared spectral region.S.rockwellscientific.
Net Loss - For the nine months ended March 31, 2005, net loss was
$2,574,253, or $0.9% from $379,518 a year earlier .

klarmann lense

Net loss included provisions for obsolete
and slow-moving inventories of $187,650 and $308,800 for the nine months ended
March 31, 2005 and 2004, respectively.
Capital equipment expenditures for the nine months ended March 31, 2005
were $28,813, down 9. The decrease reflects
a shift in certain resources to customer-sponsored development efforts in the
quarter (the costs of which are included in cost of goods sold), resulting in
initial shipments of new products to several customers .39) $(1.

edgers reticles

The
instruments will read 544 "colors" to detect minerals in the Mars surface.com .

beamsplitters prisms

RSC supplied NASA's Hubble Space Telescope with extremely sensitive FPA
mosaics to capture light from distant galaxies.

, Precision Optics
Corporation, Inc.53 per share, for the
nine months ended March 31, 2004. The Company delivered
prototypes to a new customer of specialized lens systems for use in an
advanced night vision application and also provided thin film coatings to two
other new customers for use in environmental monitoring and advanced laser
instrumentation applications .

viewfinders 608

The 3-zone filter
consists of two broadband filters and one linear variable filter. The visible array has
the same pixel format and read-out integrated circuit (ROIC) as the MWIR
sensor, greatly simplifying the data acquisition system.
Net Loss - For the quarter ended March 31, 2005, net loss was $819,916, or
$0. Net loss included provisions for obsolete and slow moving inventories
of $38,650 and $124,700 for the quarters ended March 31, 2005 and 2004,
respectively.

omek lenses

Today, RSC is working on a
contract for NASA to provide infrared FPA's for Hubble's successor -- the
2011 James Webb Space Telescope. The weighted average common shares outstanding for the quarters
ended March 31, 2005 and 2004 were 7,008,212 and 1,752,053, respectively.

comparator lense

About Rockwell Scientific Company

Rockwell Scientific Company LLC, based in Thousand Oaks, CA, is an
independent, privately owned high-technology enterprise with unique
technical strengths in imaging sensors, electronics , optics, materials, and
information science.

Precision Optics Corporation Announces Third Quarter Results

39 per share, an improvement of $98,298 in spite of lower
revenues, compared to the net loss of $2,672,551, or $1.

fresnel diffractive

Customer Relationships
During the quarter and nine months ended March 31, 2005, the Company's
revenues included initial shipments to several new customers of optical lenses
and instruments that utilize the Company's patent-pending micro-precision
lens (TM) technology for applications that encompass a variety of innovative
techniques involving minimally invasive surgery.

micrometers fresnel

The increase was due primarily to the lower revenues in
the quarter ended March 31, 2005.