COMPUMED, INC. ANNOUNCES THIRD QUARTER FISCAL 2004 FINANCIAL RESULTS
Revenues Increase 8%, While Net Loss Decreases 17%

Los Angeles, CA – Aug. 16, 2004 – CompuMed, Inc. (OTC BB: CMPD.OB) -- a medical informatics company serving the healthcare community with diagnostic software solutions -- today announced fiscal 2004 results for the third quarter, which ended June 30, 2004.

Total revenues for the third quarter increased 8% to $463,000, compared to $428,000 for the third quarter of fiscal 2003. Net loss for the quarter decreased 17% to $40,000, or $0.00 per share, compared to a loss of $48,000, or $0.00 per share for the same quarter of fiscal 2003.

Total revenues for the nine months ended June 30, 2004 increased 2% to $1,384,000, compared to $1,362,000 for the same period in fiscal year 2003. Net loss for the nine months ended June 30, 2004 decreased 29% to $180,000 or $0.01 per share, compared to a loss of $255,000 or $0.01 per share for the same period in the prior fiscal year.

"Our revenue grew and our net loss continued to diminish as we boosted sales of our core OsteoGram and CardioGram systems," said Jerry McLaughlin, CompuMed's CEO. "We have successfully integrated the OsteoGram into platforms from top medical imaging manufacturers, and we are presently negotiating additional licensing agreements that will further accelerate growth."

During the third quarter, management continued to implement its strategy to develop and market the DICOM (Digital Communications and Imaging in Medicine) version of CompuMed's OsteoGram imaging system.

The OsteoGram is a software-based system that enables healthcare providers to screen, diagnose and monitor osteoporosis using a conventional film-based hand x-ray or digital image derived from filmless x-ray equipment. The patented system provides a uniquely cost-effective solution to address a disease that currently costs the U.S. healthcare system alone more than $16 billion annually. The recently introduced DICOM-based version helps providers achieve workstation consolidation by eliminating the need for dedicated and expensive osteoporosis imaging equipment, computers, office space and staff.

CompuMed's development team recently completed integration of the OsteoGram with digital computed radiography (CR) platforms by Orex Computed Radiography Inc. (Yokneam, Israel and Auburndale, Mass.) -- a global leader in digital medical imaging systems. The integrated product was released in June, and officially launched at the ChinaMed expo by Orex and its distribution partner -- the Medical Solutions Group of Siemens, LTD.

Digital radiology platforms are a high growth segment of the global medical imaging market as hospitals replace older analog systems in an effort to eliminate expensive film and messy chemicals. The first two DICOM OsteoGram systems integrated with the OREX CR platform were installed during the third quarter at hospitals near Shanghai. The positive results reported by these two hospitals bode well for continued adoption of the OsteoGram in China's growing market for digital imaging systems.

"We initiated shipments of the DICOM OsteoGram to end-users, distributors and OEM partners in China, the Czech Republic and Israel," added McLaughlin. "Much implementation work remains, but we are making steady progress toward our goals."

In addition to advancing OsteoGram product integration and sales, the company also won major contracts for its CardioGram ECG (electrocardiogram) telemedicine system. During the third quarter, CompuMed was awarded multi-year statewide contracts to provide remote ECG interpretation systems and services to correctional departments in California and New York State.

About CompuMed:

Founded in 1973, CompuMed, Inc. (BB:CMPD) is a leading provider of computer-aided telemedicine and diagnostics technology. The company's core products are the OsteoGram and CardioGram systems. The OsteoGram, which is cleared by the FDA for commercial use, is an accurate and precise technology for low-cost osteoporosis testing. The CardioGram system remotely interprets electrocardiograms and is used by private practice, government and corporate healthcare providers nationwide. The CardioGram has the additional capability to automatically provide an over-read by a cardiologist. CompuMed is headquartered in Los Angeles. Visit CompuMed at www.compumed.net .

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, ability to raise capital, the availability of appropriate acquisition candidates and/or business partnerships, economic conditions, the impact of competition and pricing, capacity and supply constraints or difficulties, government regulation and other risks defined in this document. All such forward-looking statements whether written or oral, and whether made by or on behalf of the Company are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

CONTACT: Erik Deutsch - Tellem Worldwide, +1 (310) 479-6111 x.15, edeutsch@tellem.com