Escalon® Medical Corp. Sells Its Clinical Diagnostics Business

        Escalon® Medical Corp. Sells Its Clinical Diagnostics Business

PR Newswire

WAYNE, Pa., Oct. 4, 2012

WAYNE, Pa., Oct. 4, 2012 /PRNewswire/ --Escalon Medical Corp. (Nasdaq: ESMC)
(the "Company") today announced the sale of its Clinical Diagnostics Business
to ERBA Diagnostics, Inc. (NYSE MKT: ERB).

The Escalon Clinical Diagnostics Business ("ECD') consists of Drew Scientific,
Inc., and its wholly owned subsidiaries JAS Diagnostics, Inc. ("JAS") and Drew
Scientific Limited Co. ECD develops and sells A1c and Hematology diagnostic
instruments, reagents and chemistries. Drew was focused on providing
instrumentation and consumables for the physician office labs, small hospital
labs and veterinary research laboratories. Drew also supplies the reagent and
other consumable materials needed to operate the instruments. JAS specializes
in the manufacture of a broad range of liquid stable, diagnostics chemistry
reagents used in IVD tests. Many of these reagents are single vial stable,
which offer ease of use, increased speed of results and extended on-board
stability. The sales price was $6,500,000 in cash.

The Company acquired Drew in 2004. Since the Company's entry into the
clinical diagnostics business, the Company's strategic objective had been to
expand our presence in the reagent segment of the IVD market. Drew was
focused on the equipment side of the IVD business; JAS synergistically
expanded the Company's position into the clinical chemistry consumable
market. The Company restructured the business in an effort to position it for
profitability. As the path to profitability was longer than anticipated, the
Company continued to invest into the business. Management realized that
further investment and focus was needed to move ECD into profitability.
Therefore, as the opportunity to seek strategic partners developed into
opportunities for combinations, management pursued the opportunity presented
by ERBA Diagnostics. ERBA Diagnostics develops, manufactures and markets
proprietary diagnostic reagents, instrumentation and software, specializing in
a full range of products from ERBA international group of companies in USA,
Italy, Czech Republic, India and Turkey, including not only the Autoimmune and
Infectious Elisa product lines, but also the full line of biochemistry,
clinical chemistry and urine analysis products.

"The sale of Escalon Clinical Diagnostics business was based on the continuing
extensive strategic evaluation and enables us to better focus our efforts and
resources on our Ophthalmic business" said Richard J. DePiano, Jr., President
of Escalon. "We expect to use the cash we receive in the transaction to
strengthen our balance sheet, to provide additional working capital, enhance
our ability to strategically expand our Ophthalmic business and provide the
means to selectively pursue opportunities for synergistic growth."

Escalon Clinical Diagnostics revenues from operations were $12,985,000,
$13,708,000 and $18,077,000, in fiscal 2012, 2011, 2010, respectively. The
sale of this business will have a material effect on earnings in subsequent

Since 1997, the Company has acquired selective business's or product lines
with a mission to enhance or expand such for the sole purpose of creating
shareholder value. During this time the Company has acquired six separate
businesses or product lines and has divested of five. Each divesture provided
Escalon with a stronger balance sheet and provided additional working capital,
both of which enable it to grow its business.

Founded in 1987, the Company ( develops markets and
distributes ophthalmic diagnostic and surgical products. The Company seeks to
utilize strategic partnerships to help finance its development programs and is
also seeking acquisitions to further diversify its product line to achieve
critical mass in sales and take better advantage of the Company 's
distribution capabilities, although such partnerships or acquisitions may not
occur. The Company has headquarters in Wayne, Pennsylvania and operations in
Long Island, New York, New Berlin, Wisconsin and Stoneham, Massachusetts.

Note: This press release contains statements that are considered
forward-looking under the Private Securities Litigation Reform Act of 1995,
including statements about the Company's future prospects. These statements
are based on the Company's current expectations and are subject to a number of
uncertainties and risks, and actual results may differ materially. The
uncertainties and risks include whether the Company is able to:

  oimplement its growth and marketing strategies, improve upon the operations
    of the Company business units, including the ability to make acquisitions
    and the integration of any acquisitions it may undertake, if any, of which
    there can be no assurance,
  oimplement cost reductions,
  ogenerate cash,
  oidentify, finance and enter into business relationships and acquisitions.

Other factors include uncertainties and risks related to:

  onew product development, commercialization, manufacturing and market
    acceptance of new products,
  omarketing acceptance of existing products in new markets,
  oresearch and development activities, including failure to demonstrate
    clinical efficacy,
  odelays by regulatory authorities, scientific and technical advances by the
    Company or third parties,
  ointroduction of competitive products,
  oability to reduce staffing and other costs and retain benefit of prior
  othird party reimbursement and physician training, and
  ogeneral economic conditions.

Further information about these and other relevant risks and uncertainties may
be found in the Company's report on Form 10- K for year ended June 30, 2012,
and its other filings with the Securities and Exchange Commission, all of
which are available from the Securities and Exchange Commission as well as
other sources.

SOURCE Escalon Medical Corp.

Contact: Richard J. DePiano, Chairman and CEO, +1-610-688-6830
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