BioLok International Reports 39% Increase in Revenues for Third Quarter of Fiscal Year 2005.

DEERFIELD BEACH, Fla. -- BioLok International Inc. (OTCBB: BLLI), the manufacturer and worldwide distributor of leading-edge dental implant technology, today reported a 39% increase in revenues for its fiscal 2005 third quarter ended July 31, 2005 as compared to the same period of fiscal 2004, driven by domestic and international demand for the Company's Precision Dental Implant Systems.

Commenting on the Company's growth, Bruce L. Hollander, President of BioLok International, said, "We are pleased with our performance in the quarter, which benefited from organic growth initiatives in a large and expanding global market for dental implants. Moreover, based on our progress to date, we are even more encouraged by our future prospects as we intend to capture market share with the doubling of our sales force and continued investment in marketing and product development."

Fiscal 2005 Third Quarter Results

BioLok International's fiscal third quarter revenue were a record $1.9 million, as compared to $1.4 million in the fiscal 2004 quarter. On a geographic basis, international sales in the fiscal third quarter were $1.4 million, or 72% of the total, and domestic sales were $522,000, or 28% of the total. This compares to $1 million, or 71% of the total, and $345,000, or 29% of the total, in the third fiscal quarter of 2004 for international and domestic sales, respectively. Historically and as a consequence of limited funding, the Company primarily has marketed its products outside of the US through third-party distributors. More recently, management of BioLok International began to focus on the domestic market, which is served by a direct sales force.

Gross margins for the three months ended July 31, 2005 were 67% as a percentage of sales compared with 72% as a percentage of sales for the same period in fiscal 2004. "The decrease in gross margin percentage was predominately due to promotional activities in an effort to capture new customers," added Mr. Hollander. "As a relative newcomer but with what we believe is a superior product, we initially offer start-up discounts to build new relationships with dentists and distributors. We view this as a consumables business that will generate repeat sales once customers have experienced the benefits of BioLok International products. Continued sales growth should be achievable while maintaining gross profits within a range of 67% to 72% in the near term and improving to the mid-70% range thereafter. "

Primarily reflecting the increase in sales and marketing activities, the Company saw an increase in its operating expenses from the prior year. Sales and marketing expenses increased by 60 % in the third quarter of fiscal 2005 as compared to the same period in the prior year. Both research and development and general and administrative expenses increased by less than 10% each in the fiscal 2005 third quarter as compared to the year-ago period.

BioLok International recorded net income for the three months ended July 31, 2005 of $86,000, or $.01 per diluted share, compared with net income of $41,000, or $.01 per diluted share, for the same period in fiscal 2004. Net income increased quarter-over-quarter by 110%, with diluted earnings per share remaining flat due to an approximate doubling of the diluted average common shares outstanding to 15,289,609 in the fiscal 2005 third quarter. The increase in outstanding common shares primarily relates to the cashless exercise of all outstanding options and the March 2005 private placement which is discussed later in the press release.

Fiscal 2005 Nine Months Results and Growth Outlook

Revenues for the first nine months of fiscal 2005 were up 42% to $5.2 million from $3.6 million in the same period last year. During the first three quarters of 2005, international sales grew by 44% and domestic sales increased by 36% as compared to the 2004 period. The geographic mix for the nine-month period of fiscal 2005 was similar to the year-earlier period as well as the third quarter of 2005, with approximately 73% from international sales and 27% from domestic sales.

The Company recorded net income for the nine months ended July 31, 2005 of $52,000, or $.01 per diluted share, compared with net income of $147,000, or $.02 per diluted share, for the same period in fiscal 2004. The decrease in profitability primarily reflects the increased sales, marketing and research and development costs which are part of management's long term growth strategy. These expenses weighed more heavily on a lower base of revenues in the first quarter of fiscal 2005, with sales growth gaining traction to offset the increased operating expenses in the third quarter of the current fiscal year.

To fund the heavier spending for the Company's growth initiatives, on March 2, 2005, BioLok International completed a private offering of 5,000,000 shares of common stock and warrants for 500,000 shares of common stock for gross proceeds of $3.75 million (and net proceeds of $3.45 million). Based on the Company's financial performance during the first nine months of fiscal 2005 and the successful completion of the March offering, the Company held over $1.4 million in cash and maintained a current ratio of 4.3 as of July 31, 2005. In addition, the Company continues to have access to over $2 million from a line of credit.

"Market acceptance and recognition for BioLok's products are increasing at a fast pace," continued Mr. Hollander. "The Company is presenting at numerous trade shows and has been aggressively expanding its domestic direct sales force as well as seeking additional distribution partners for our international operations. While developing and improving upon our suite of products for dental practitioners, we expect to continue to grow in the US as well as in foreign markets, but we expect significant growth to come from our domestic operations. With the strength of our balance sheet and access to capital, we believe we are well positioned for continued top line growth while managing our business for break-even or minimal losses during the next phase of our growth strategy spanning an 18-month period."

With the exception of the historical information contained in the release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements contained in this release, which are not historical facts may be deemed to contain forward-looking statements, including, but not limited to, deployment of new services, growth of the customer base, and growth of the service area, among other items. Actual results may differ materially from those anticipated in any forward-looking statement with regard to magnitude, timing or other factors. Deviation may result from risk and uncertainties, including, without limitation, the Company's dependence on third parties, market conditions for the sale of services, technical factors affecting networks, availability of capital and other risks and uncertainties. More detailed information about these risk factors are set forth and may be updated from time to time in filings by BioLok International, Inc. with the Securities and Exchange Commission, including the Company's most recent quarterly report on Form 10-Q and other publicly available information regarding the Company. The Company disclaims any obligation to update information contained in any forward-looking statement.