Patient Safety Technologies' Board Approves Restructuring Steps, Including Spin-off of Its Subsidiary, SurgiCount Medical

  
    
  
  
    
      Patient Safety Technologies, Inc. (AMEX:PST) announced today that after 
      exploring strategic alternatives for the Company and its wholly-owned 
      subsidiary, SurgiCount Medical, Inc., the Board has approved a number of 
      steps as part of an overall corporate restructuring. These actions are 
      subject to a number of conditions and contingencies, including 
      shareholder approval, regulatory filings and receipt of new financing. 
      The following are the primary components of the restructuring that were 
      approved by the Board:
    
    
      
        Spin-off to PST shareholders of a majority interest in SurgiCount 
        Medical, Inc., which will become a publicly traded company
      
      
        New private placement of common stock by SurgiCount to fund future 
        growth
      
      
        Possible acquisition of another operating company by the Company
      
      
        Resignation from the Company by CEO and Director Milton “Todd” 
        Ault III, in order to assist the Company in implementing 
        reorganization plan
      
      
        Financial restructuring, including debt conversion
      
    
    
      The Board has approved a spin-off by the Company of a majority interest 
      in its wholly-owned subsidiary, SurgiCount Medical, Inc. The Company 
      also intends to raise new equity capital on behalf of SurgiCount, and 
      has already engaged an investment banking firm to assist SurgiCount in 
      conducting a private placement of its stock. SurgiCount intends to file 
      a registration statement with the Securities and Exchange Commission in 
      connection with the spin-off and become a public reporting company, as 
      well as seek a listing on a national securities exchange. The Company is 
      currently exploring the structure of the proposed spin-off transaction 
      in order to minimize the tax impact of the spin-off on the Company and 
      its shareholders.
    
    
      The Board has also approved management’s 
      exploration of opportunities to complete an acquisition of another 
      suitable operating company. In this regard, the Company is in 
      discussions with a possible acquisition target and is authorized to 
      enter into a letter of intent with the company to explore a possible 
      transaction. The Company also intends to sell, liquidate or monetize its 
      other assets and extinguish certain of its debts in preparation for a 
      possible acquisition. The Company does not intend to publicly disclose 
      further developments with respect to a possible acquisition transaction 
      unless and until a definitive agreement is reached.
    
    
      The Company also announced today that Milton “Todd” 
      Ault III, the Company’s interim CEO, has 
      resigned as Chief Executive Officer and as a Director of the Company. 
      Mr. Ault was appointed interim CEO when Dr. Louis Glazer resigned as CEO 
      in July 2006 for medical reasons. The Company’s 
      Board of Directors has appointed Lynne Silverstein, President of the 
      Company, as PST’s new interim CEO. Ms. 
      Silverstein will assist in closing out all outstanding legacy issues and 
      preparing the Company for a possible acquisition, at which time a 
      permanent CEO of the Company is expected to be appointed.
    
    
      Further, as part of this restructuring, Ault Glazer Capital Partners 
      LLC, one of the Company’s major creditors, 
      has agreed in principle to convert its outstanding loans to the Company 
      into equity, and convert two loans on properties owned by Automotive 
      Services Group, PST’s wholly owned 
      subsidiary, into PST common stock. This conversion, when completed, will 
      eliminate approximately $3.3 Million of the Company’s 
      existing debt, thereby significantly enhancing the Company’s 
      Balance Sheet.
    
    
      Separately, the Company has reached a settlement agreement with Winstar 
      Global Media, Inc., relating to the Company’s 
      $1 Million Note with Winstar, and is currently awaiting a New York Court 
      to approve the terms of the settlement agreement, which is currently set 
      for November 7. The settlement, whereby the existing liability was 
      reduced to $750,000, provides that the Company abide by a payment 
      schedule set forth in the agreement, and eliminates another $250,000 of 
      debt, plus interest, of the Company.
    
    
      About SurgiCount and the Safety-Sponge™ 
      System
    
    
      SurgiCount Medical's Safety-Sponge System works much like a grocery 
      store check-out system. Every surgical sponge and towel is pre-labeled 
      by the manufacturer with an individual and unique bar coded label, and a 
      scanning counter is used to read and record the labels. No change is 
      required in a hospital's established counting procedures: sponges are 
      counted and recorded by the system at the beginning of the procedure and 
      again as they are removed from the patient. For more information, visit www.surgicountmedical.com.
    
    
      About Patient Safety Technologies, Inc.
    
    
      Patient Safety Technologies, Inc. (PST) is a holding company that owns 
      assets in various businesses. Its wholly-owned subsidiary, SurgiCount 
      Medical, Inc., is a developer and manufacturer of patient safety 
      products and services. For more information on Patient Safety 
      Technologies, Inc., please contact the company directly at 310-895-7750, 
      or by email at [e-mail] 
      or www.patientsafetytechnologies.com.
    
    
      Forward-Looking Statements
    
    
      This press release contains certain forward-looking statements. These 
      forward-looking statements can generally be identified as such because 
      the context of the statement will include words such as Patient Safety 
      Technologies plans, expects, should, believes, anticipates or words of 
      similar import. Stockholders, potential investors and other readers are 
      cautioned that these forward-looking statements are predictions based 
      only on current information and expectations that are inherently subject 
      to risks and uncertainties that could cause future events or results to 
      differ materially from those set forth or implied by the forward-looking 
      statements. Certain of those risks and uncertainties are discussed in 
      our filings with the Securities and Exchange Commission, including our 
      annual report on Form 10-K and quarterly reports on Form 10-Q. These 
      forward-looking statements are only made as of the date of this press 
      release and Patient Safety Technologies does not undertake any 
      obligation to publicly update such forward-looking statements to reflect 
      subsequent events or circumstances.
    
    
      This press release does not constitute an offer to sell or the 
      solicitation of an offer to buy securities. As of the date of this 
      release, no registration statement relating to the issuance or 
      distribution of shares of Patient Safety Technologies or SurgiCount 
      Medical has been filed with the Securities and Exchange Commission.
    
  
Patient Safety Technologies, Inc. (AMEX:PST) announced today that
after exploring strategic alternatives for the Company and its
wholly-owned subsidiary, SurgiCount Medical, Inc., the Board has
approved a number of steps as part of an overall corporate
restructuring. These actions are subject to a number of conditions and
contingencies, including shareholder approval, regulatory filings and
receipt of new financing. The following are the primary components of
the restructuring that were approved by the Board:

   --  Spin-off to PST shareholders of a majority interest in
        SurgiCount Medical, Inc., which will become a publicly traded
        company

   --  New private placement of common stock by SurgiCount to fund
        future growth

   --  Possible acquisition of another operating company by the
        Company

   --  Resignation from the Company by CEO and Director Milton "Todd"
        Ault III, in order to assist the Company in implementing
        reorganization plan

   --  Financial restructuring, including debt conversion

   The Board has approved a spin-off by the Company of a majority
interest in its wholly-owned subsidiary, SurgiCount Medical, Inc. The
Company also intends to raise new equity capital on behalf of
SurgiCount, and has already engaged an investment banking firm to
assist SurgiCount in conducting a private placement of its stock.
SurgiCount intends to file a registration statement with the
Securities and Exchange Commission in connection with the spin-off and
become a public reporting company, as well as seek a listing on a
national securities exchange. The Company is currently exploring the
structure of the proposed spin-off transaction in order to minimize
the tax impact of the spin-off on the Company and its shareholders.

   The Board has also approved management's exploration of
opportunities to complete an acquisition of another suitable operating
company. In this regard, the Company is in discussions with a possible
acquisition target and is authorized to enter into a letter of intent
with the company to explore a possible transaction. The Company also
intends to sell, liquidate or monetize its other assets and extinguish
certain of its debts in preparation for a possible acquisition. The
Company does not intend to publicly disclose further developments with
respect to a possible acquisition transaction unless and until a
definitive agreement is reached.

   The Company also announced today that Milton "Todd" Ault III, the
Company's interim CEO, has resigned as Chief Executive Officer and as
a Director of the Company. Mr. Ault was appointed interim CEO when Dr.
Louis Glazer resigned as CEO in July 2006 for medical reasons. The
Company's Board of Directors has appointed Lynne Silverstein,
President of the Company, as PST's new interim CEO. Ms. Silverstein
will assist in closing out all outstanding legacy issues and preparing
the Company for a possible acquisition, at which time a permanent CEO
of the Company is expected to be appointed.

   Further, as part of this restructuring, Ault Glazer Capital
Partners LLC, one of the Company's major creditors, has agreed in
principle to convert its outstanding loans to the Company into equity,
and convert two loans on properties owned by Automotive Services
Group, PST's wholly owned subsidiary, into PST common stock. This
conversion, when completed, will eliminate approximately $3.3 Million
of the Company's existing debt, thereby significantly enhancing the
Company's Balance Sheet.

   Separately, the Company has reached a settlement agreement with
Winstar Global Media, Inc., relating to the Company's $1 Million Note
with Winstar, and is currently awaiting a New York Court to approve
the terms of the settlement agreement, which is currently set for
November 7. The settlement, whereby the existing liability was reduced
to $750,000, provides that the Company abide by a payment schedule set
forth in the agreement, and eliminates another $250,000 of debt, plus
interest, of the Company.

   About SurgiCount and the Safety-Sponge(TM) System

   SurgiCount Medical's Safety-Sponge System works much like a
grocery store check-out system. Every surgical sponge and towel is
pre-labeled by the manufacturer with an individual and unique bar
coded label, and a scanning counter is used to read and record the
labels. No change is required in a hospital's established counting
procedures: sponges are counted and recorded by the system at the
beginning of the procedure and again as they are removed from the
patient. For more information, visit www.surgicountmedical.com.

   About Patient Safety Technologies, Inc.

   Patient Safety Technologies, Inc. (PST) is a holding company that
owns assets in various businesses. Its wholly-owned subsidiary,
SurgiCount Medical, Inc., is a developer and manufacturer of patient
safety products and services. For more information on Patient Safety
Technologies, Inc., please contact the company directly at
310-895-7750, or by email at [e-mail] or
www.patientsafetytechnologies.com.

   Forward-Looking Statements

   This press release contains certain forward-looking statements.
These forward-looking statements can generally be identified as such
because the context of the statement will include words such as
Patient Safety Technologies plans, expects, should, believes,
anticipates or words of similar import. Stockholders, potential
investors and other readers are cautioned that these forward-looking
statements are predictions based only on current information and
expectations that are inherently subject to risks and uncertainties
that could cause future events or results to differ materially from
those set forth or implied by the forward-looking statements. Certain
of those risks and uncertainties are discussed in our filings with the
Securities and Exchange Commission, including our annual report on
Form 10-K and quarterly reports on Form 10-Q. These forward-looking
statements are only made as of the date of this press release and
Patient Safety Technologies does not undertake any obligation to
publicly update such forward-looking statements to reflect subsequent
events or circumstances.

   This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities. As of the date of this
release, no registration statement relating to the issuance or
distribution of shares of Patient Safety Technologies or SurgiCount
Medical has been filed with the Securities and Exchange Commission.