COMPUMED, INC. ANNOUNCES SECOND QUARTER FISCAL 2004 FINANCIAL RESULTS
Advances Worldwide Distribution/Product Integration with Orex and eTrauma; Achieves First DICOM OsteoGram(R) Sales in China While Increasing Domestic CardioGram Revenue

Los Angeles, CA – May 17, 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 second quarter, which ended March 31, 2004.

Total revenues for the second quarter were $461,000, compared to $482,000 for the second quarter of fiscal 2003. Net loss for the quarter was $79,000, or $0.00 per share, compared to a loss of $59,000, or $0.00 per share for the same quarter of fiscal 2003. The Company's cash, cash equivalents and marketable securities balance was $256,000 on March 31, 2004.

Total revenues for the six months ended March 31, 2004 were $921,000, compared to $934,000 for the same period in fiscal year 2003. Net loss for the six months ended March 31, 2004 was $140,000 or $0.01 per share, compared to a loss of $207,000 or $0.01 per share for the same period in the prior fiscal year.

"The quarter marked the first end-user shipment of our digitally-based OsteoGram system in China, which is a rapidly growing market for digital imaging products," said Jerry McLaughlin, CompuMed's CEO. "In addition, March was the best month since October 2002 for service revenue generated by our CardioGram (ECG) products."

During the quarter ending March 31, 2004, management continued to implement its strategic shift towards the development of applications for digital (i.e., DICOM-compliant) medical imaging equipment. In 2003, CompuMed announced a licensing agreement to market the OsteoGram on a global basis with Orex Computed Radiography, Inc. -- a leading provider of digital imaging equipment for a broad range of clinical applications. The integration of the OsteoGram into Orex's proprietary computed radiography (CR) platform is nearly complete, with a full release of the combined product expected by the end of May.

The OsteoGram is CompuMed's patented software application for the cost- effective diagnosis of osteoporosis, a disease that costs the U.S. healthcare system more than $16 billion annually. Digital radiography platforms are a high growth market in the global imaging field, as hospitals increasingly replace older, analog systems in an effort to eliminate film costs, messy chemicals and darkrooms.

CompuMed also recently signed a licensing agreement with eTrauma Corporation, a leader in the development of network communications and storage solutions for the orthopedic office environment.

"We continued to cut our losses and progress toward profitability last quarter despite increased legal expenses relating to compliance with Sarbanes- Oxley, as well as the registration statement filing for the previously announced $5 million equity line of credit," added McLaughlin. "Management anticipates that progress will accelerate as CompuMed benefits from new alliances and increased worldwide sales."

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