The preferred stock is convertible into 4,886,690 shares of common stock. Warrants were also issued for 4,886,690 shares. One-half of the warrants permit the holders to purchase shares of SpectRx common stock at a price of $1.65 per share, and the other half, at $2.25 per share. The placement also included a registration rights agreement between the company and the purchasers, requiring registration of the underlying common shares. Of the proceeds, approximately $1.0 million represents the conversion of debt into securities issued in the financing. The remaining funds are intended for use in product development, working capital and other corporate purposes.

"The recent financing was a key element in our strategy to complete the launch of our SimpleChoice product line and build our diabetes business," said Mark A. Samuels, SpectRx, Inc. chairman and chief executive officer. "We are also seeking separate financing for our cancer activities, which will allow us to recognize our vision of refocusing these elements of the company to better achieve our goals."

SpectRx, Inc. is a diabetes management company developing and providing innovative solutions for insulin delivery and glucose monitoring. SpectRx markets the SimpleChoice® line of innovative diabetes management products, which include insulin pump disposable supplies. These FDA-cleared products complement its developmental consumer device for continuous glucose monitoring. SpectRx also plans to commercialize its non-invasive cancer detection technology in a separate company through separate financing. For more information, visit SpectRx's web sites at www.spectrx.com, www.mysimplechoice.com and www.guidedtherapeutics.com.

About Bristol Investment Group, Inc.

Bristol Investment Group, Inc. is a private investment banking firm focused on serving the needs of high growth public and private companies who require capital, strategic planning and merger and acquisition advice. The members of the firm have a broad range of experience in raising debt and equity capital, structuring and financing acquisitions, arranging joint ventures and managing companies. Mr. Alan Donenfeld, President of Bristol, formed the company in 1990 with the mission of providing a high standard of investment banking services to small and middle market public and private companies. Bristol is a broker/dealer firm registered with the National Association of Securities Dealers (NASD) and is member of the Securities Investor Protection Corporation (SIPC). For more information on Bristol Investment Group call 212-572-6306 or visit the www.BristolDirect.com website.