U.S. DEPARTMENT OF VETERAN AFFAIRS AWARDS MULTI-MILLION DOLLAR PURCHASING AGREEMENT TO PRECEPT MEDICAL PRODUCTS, INC.

Arden, NC—January 14, 2004: Precept Medical Products, Inc., a manufacturer of medical supplies including nonwoven surgical drapes and personal protection apparel, has been awarded a blanket purchasing agreement to provide surgical gowns and drapes to the U.S. Department of Veteran Affairs. The term of the agreement is for three years beginning November 1, 2003. The Department of Veteran Affairs operates over a thousand medical facilities throughout the United States, including hospitals, clinics, and ambulatory care facilities.

“Precept is very excited about securing the surgical gown and drape purchasing agreement,” commented Michael Boyd, President of Precept Medical Products. “This agreement provides us the opportunity to elevate production in our North American manufacturing operations.”

This agreement also complements two prior purchasing agreements between Precept Medical Products and the Department of Veterans Affairs. In December 2002, Precept Medical Products began supplying VA Medical Centers throughout the United States with its FluidGard™ surgical and procedure facemasks. The FluidGard™ facemasks are fluid resistant and available with anti-fogging extended shields. The terms of these facemask purchasing agreements are for 5 years respectively.

“All of these agreements, from our two facemask contracts to the new surgical drape and gown award, were the result of excellent teamwork throughout the entire Precept organization,” stated President Boyd.