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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  SCHEDULE 14A
                                 (Rule 14a-101)

                            SCHEDULE 14A INFORMATION

                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934
                                (Amendment No.1)


Filed by Registrant  |X|

Filed by a Party other than the Registrant  |_|

Check the appropriate box:

|X|      Preliminary Proxy Statement

|_|      Confidential,  for Use of the  Commission  Only (as  permitted  by Rule
         14a-6(3)(2))

|_|      Definitive Proxy Statement

|_|      Definitive Additional Materials

|_|      Soliciting Material Pursuant to ss.240.14a-12


                        PARADIGM MEDICAL INDUSTRIES, INC.
                (Name of Registrant as Specified In Its Charter)


                    -----------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the Appropriate box):

|X|      No fee required.

|_|      Fee  computed  on  table  below  per  Securities   Exchange  Act  Rules
         15a-6(i)(4) and 0-11.*

|_|      Fee paid previously with preliminary materials.

         (1)      Title  of  each  class  of  securities  to  which  transaction
                  applies:
         (2)      Aggregate number of securities to which transaction applies:
         (3)      Per  unit  price  or other  underlying  value  of  transaction
                  computed  pursuant to  Securities  Exchange Act Rule 0-11 (set
                  forth the  amount on which the filing  fee is  calculated  and
                  state how it was determined):
         (4)      Proposed maximum aggregate value of transaction:
         (5)      Total fee paid:


|_|      Check box if any part of the fee is offset as  provided  by  Securities
         Exchange  Act Rule  0-11(a)(2)  and  identify  the filing for which the
         offsetting  fee was paid  previously.  Identify the previous  filing by
         registration  statement number, or the Form or Schedule and the date of
         its filing.
         (1)      Amount Previously Paid:
         (2)      Form, Schedule or Registration Statement No.:
         (3)      Filing Party:
         (4)      Date Filed:





                        PARADIGM MEDICAL INDUSTRIES, INC.

                              2355 South 1070 West
                           Salt Lake City, Utah 84119


                                September 7, 2007






Dear Shareholder:

         On behalf of the Board of Directors, it is my pleasure to invite you to
attend the Annual Meeting of Shareholders of Paradigm Medical  Industries,  Inc.
(the "Company") to be held on Friday,  October 12, 2007, at 10:00 a.m., Mountain
Daylight Time, at 2355 South 1070 West, Salt Lake City, Utah 84119.

         The formal notice of the Annual  Meeting and the Proxy  Statement  have
been made a part of this  invitation.  Also  enclosed is a copy of the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2006.


         The  matters  to be  addressed  at the  meeting  will  include  (i) the
election of four directors;  (ii) the approval of the proposed  amendment to the
Certificate  of  Incorporation  to increase the number of  authorized  shares of
common stock from 800,000,000 shares to 1,400,000,000 shares; (iii) the approval
of the  amendment  to the 1995 Stock  Option  Plan to  authorize  an  additional
8,000,000  shares of common stock to be made  available  for issuance  under the
plan;  and (iv) the  ratification  of the  appointment  of Chisholm,  Bierwolf &
Nilson as the Company's registered public independent accountants for the fiscal
year ending  December  31, 2007.  I will also report on the  Company's  business
activities  and  answer  any  shareholder  questions.  The  Board  of  Directors
recommends  that  you  vote  FOR  election  of the  director  nominees,  FOR the
amendment  to the  Certificate  of  Incorporation  to  increase  the  number  of
authorized  shares, FOR the amendment to the 1995 Stock Option Plan to authorize
additional shares for issuance  thereunder,  and FOR ratification of appointment
of the  registered  public  independent  accountants.  Please refer to the Proxy
Statement  for  detailed  information  on each of the  proposals  and the Annual
Meeting.

         Your vote is very  important.  We hope you will take a few  minutes  to
review the Proxy Statement and complete, sign, and return your Proxy Card in the
envelope  provided,  even if you plan to attend the  meeting.  Please  note that
sending us your Proxy will not prevent you from voting in person at the meeting,
should you wish to do so.

         Thank you for your support of Paradigm Medical Industries, Inc. We look
forward to seeing you at the Annual Meeting.

                                           Sincerely yours,

                                           /s/  Raymond P.L. Cannefax

                                           Raymond P.L. Cannefax
                                           President and Chief Executive Officer






                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                           TO BE HELD OCTOBER 12, 2007
                            -------------------------
To our Shareholders:

         NOTICE IS HEREBY  GIVEN that the Annual  Meeting of  Shareholders  (the
"Annual Meeting") of Paradigm Medical Industries, Inc. (the "Company") will held
on Friday,  October 12, 2007, beginning at 10:00 a.m. Mountain Daylight Time, at
the Company's  corporate  headquarters  at 2355 South 1070 West, Salt Lake City,
Utah.  At the  Annual  Meeting,  shareholders  will  consider  and act  upon the
following matters:

         1.       To elect a Board of Directors  consisting of four directors to
                  serve until the next annual meeting of shareholders  and until
                  their respective successors are elected and qualified;


         2.       To approve the proposed amendment to the Company's Certificate
                  of Incorporation  to increase the number of authorized  shares
                  of common stock from 800,000,000 to 1,400,000,000 shares;


         3.       To amend the Company's  1995 Stock Option Plan to authorize an
                  additional  8,000,000  shares  of  common  stock  to  be  made
                  available for issuance under the plan;

         4.       To ratify the  appointment  of Chisholm,  Bierwolf & Nilson as
                  the Company's  registered public  independent  accountants for
                  the fiscal year ending December 31, 2007; and

         5.       To transact  such other  business as may properly  come before
                  the meeting or any adjournment thereof.

         The foregoing  items of business are more fully  described in the Proxy
Statement  accompanying  this Notice.  Also included is a single-page Proxy Card
and a postage prepaid return envelope.  Only shareholders of record at the close
of business on  September 4, 2007 are entitled to notice of, and to vote at, the
Annual Meeting or any adjournment thereof.

         If you do not expect to attend the meeting in person,  it is  important
that your shares be  represented.  Please use the enclosed Proxy Card to vote on
the matters to be  considered  at the meeting,  sign and date the proxy card and
mail it promptly in the enclosed  envelope,  which requires no postage if mailed
in the United  States.  You may revoke your proxy at any time before the meeting
by written notice to such effect, by submitting a subsequently dated proxy or by
attending  the meeting and voting in person.  If your shares are held in "street
name," you should instruct your broker how to vote in accordance with your Proxy
Card.

                                            By order of the Board of Directors,

                                            /s/  Luis A. Mostacero

                                            Luis A. Mostacero
                                            Vice President of Finance, Treasurer
                                            and Secretary
September 7, 2007
Salt Lake City, Utah





                        PARADIGM MEDICAL INDUSTRIES, INC.
                              2355 South 1070 West
                           Salt Lake City, Utah 84119


                                 PROXY STATEMENT

                 INFORMATION CONCERNING SOLICITATION AND VOTING

General

         The enclosed  Proxy is solicited on behalf of the Board of Directors of
Paradigm Medical  Industries,  Inc., a Delaware  corporation (the "Company") for
use at the Annual Meeting of Shareholders  (the "Annual  Meeting") to be held on
Friday, October 12, 2007, beginning at 10:00 a.m., Mountain Daylight Time, or at
any adjournment(s) thereof. The purposes of the meeting are set forth herein and
in the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at the Company's  corporate  headquarters  at 2355 South 1070 West,
Salt Lake City, Utah. This Proxy Statement and accompanying  materials are being
mailed on or about  September  7, 2007.  The Company  will bear the cost of this
solicitation.


         The  matters to be brought  before the Annual  Meeting are (1) to elect
four directors to serve for the ensuing year; (2) to approve an amendment to the
Company's  Certificate  of  Incorporation  to increase the number of  authorized
common shares of common stock from 800,000,000  shares to 1,400,000,000  shares;
(3) to approve  the  amendment  to the 1995 Stock  Option Plan to  authorize  an
additional  8,000,000,000  shares  of  common  stock  to be made  available  for
issuance under the plan; (4) to ratify the  appointment of Chisholm,  Bierwolf &
Nilson as the Company's registered public independent accountants for the fiscal
year ending  December 31, 2007;  and (5) to transact such other  business as may
properly come before the Annual Meeting.


Record Date

         Shareholders  of record of the  Company's  Common Stock at the close of
business  on  September  4,  2007 are  entitled  to notice of and to vote at the
meeting.  At the record date,  248,666,625 shares of the Company's Common Stock,
$.001 par value,  5,627 shares of the Series A Preferred Stock,  8,986 shares of
Series B Preferred  Stock,  no shares of Series C Convertible  Preferred  Stock,
5,000 shares of Series D  Convertible  Preferred  Stock,  250 shares of Series E
Convertible  Preferred  Stock,  4,398.75 shares of Series F Preferred Stock, and
588,235  shares  of  Series G  Preferred  Stock  were  issued  and  outstanding.
Shareholders  of Series A,  Series B, Series C, Series D, Series E, Series F and
Series  G  Preferred  Stock  are not  entitled  to vote at the  Annual  Meeting.
Shareholders  holding at least  one-third  of the  outstanding  shares of Common
Stock  represented  in  person or by proxy  shall  constitute  a quorum  for the
transaction of business at the Annual Meeting.

Revocability of Proxies

         Shareholders may revoke any appointment of proxy given pursuant to this
solicitation  by delivering the Company a written notice of revocation or a duly
executed  proxy  bearing a later date or by attending  the meeting and voting in
person.  An  appointment of proxy is revoked upon the death or incapacity of the
shareholder  if the  Secretary  or other  officer of the Company  authorized  to
tabulate  votes  receives  notice of such death or  incapacity  before the proxy
exercises its authority under the appointment.

Voting and Solicitation

         Each  shareholder will be entitled to one vote for each share of Common
Stock held at the record  date.  Assuming a quorum is present,  a  plurality  of
votes cast by the shares  entitled to vote in the election of directors  will be
required  to elect each  director.  Because  the  shares of Series A,  Series B,
Series  C,  Series  D,  Series  E,  Series F and  Series G  Preferred  Stock are
non-voting  securities,  the holders thereof will not be entitled to vote at the
Annual  Meeting.  To approve the  granting  of the stock  options to the outside
directors of the Company,  holders of a majority of the shares  entitled to vote
at the Annual  Meeting must vote in favor of the stock  options.  The  principal
executive  offices of the Company are located at 2355 South 1070 West, Salt Lake
City,  Utah.  In  addition  to the use of the mails,  proxies  may be  solicited
personally,  by  telephone,  or by  facsimile,  and the  Company  may  reimburse
brokerage  firms and other persons  holding shares in the Company in their names
or  those  of  their  nominees  for  their  reasonable  expenses  in  forwarding
soliciting materials to the beneficial owners.





                              ELECTION OF DIRECTORS

                                   Proposal 1

Nominees

         The Company's  Bylaws do not limit the number of persons serving on the
Company's  Board  of  Directors,  and it is  contemplated  that a board  of four
directors  will be  elected  at the  Annual  Meeting.  The  Board  of  Directors
recommends  that the  shareholders  vote "FOR" the election of the four director
nominees listed below.  Assuming a quorum is present,  a plurality of votes cast
by the shares  entitled to vote in the election of directors will be required to
elect each director.  Unless otherwise  instructed,  the proxy holders will vote
the proxies received by them for management's  four nominees named below, all of
whom are presently directors of the Company.

         In the event that any management nominee is unable or declines to serve
as a director at the time of the Annual  Meeting,  the proxies will be voted for
any nominee who shall be  designated  by the present  Board of Directors to fill
the vacancy.  In the event that  additional  persons are nominated as directors,
the proxy holders  intend to vote all proxies  received by them in such a manner
as will ensure the election of as many of the nominees listed below as possible.
It is not expected that any nominee will be unable or will decline to serve as a
director.  The term of office of each person elected as a director will continue
until the next annual meeting of shareholders and until such person's  successor
has been elected and qualified. Officers are appointed by the Board of Directors
and serve at the discretion of the board.

         The name and certain  information  regarding  each nominee is set forth
below. See also "Certain Relationships and Related Transactions."

   Name                      Age   Director Since   Position with the Company
   -----------------------   ---   --------------   -------------------------
   Randall A. Mackey, Esq.   61    January 2000     Chairman of the Board
   Dr. David M. Silver       65    January 2000     Director
   Keith D. Ignotz           59    November 2000    Director
   John C. Pingree           66    April 2004       Director

      The following  biographical  information  is furnished with respect to the
four director nominees:

      Randall A. Mackey, Esq. has been the Company's Chairman of the Board since
August 20, 2002, and a director since January 2000. He had previously  served as
a director of the Company from November 1995 to September  1998.  Mr. Mackey has
been  President of the Salt Lake City law firm of Mackey Price Thompson & Ostler
since 1992, and a shareholder and director of the firm and its predecessor firms
since 1989. Mr. Mackey  received a B.S.  degree in Economics from the University
of Utah, an M.B.A.  degree from the Harvard  Business School, a J.D. degree from
Columbia Law School and a B.C.L.  degree from Oxford University.  Mr. Mackey has
also  served  as  Chairman  of the Board  from  June 2001 to May 2003,  and as a
director from 1998 to May 2003 of Cimetrix, Incorporated, a software development
company.  Mr. Mackey has additionally  served as Chairman of the Board from July
2000 to July 2003 and as a trustee from 1993 to July 2003 of Salt Lake Community
College, and a member of the Utah State Board of Education since September 2005.

      David M. Silver,  Ph.D.  has been a director  since  January  2000. He had
previously  served as a director of the company from  November 1995 to September
1998.  Dr. Silver is a Principal  Senior  Scientist in the Milton S.  Eisenhower
Research  and  Technology  Development  Center at the Johns  Hopkins  University
Applied Physics Laboratory,  where he has been employed since 1970. He served as
the J. H. Fitzgerald  Dunning  Professor of  Ophthalmology  in the Johns Hopkins
Wilmer Eye Institute in Baltimore during 1998-99. He received a B.S. degree from
Illinois  Institute of Technology,  an M.A. degree from Johns Hopkins University
and a Ph.D.  degree from Iowa State  University  before  holding a  postdoctoral
fellowship  at Harvard  University  and a  visiting  scientist  position  at the
University of Paris.

      Keith D. Ignotz has been a director since November 2000. Since March 2005,
Mr.  Ignotz  has  been  President  and  Chief   Executive   Officer  of  Diakine
Therapeutics,  Inc., a pharmaceutical  therapeutics  company. From 1992 to 2004,
Mr. Ignotz was with SpectRx, Inc., a medical technology company that he founded,
which develops, manufactures and markets alternatives to traditional blood based
medical  tests,  serving  from 2002 to 2004 as the Chief  Executive  Officer  of
Guided Therapeutics,  Inc., a wholly-owned subsidiary of SpectRx, Inc., and from
1992 to 2002 as President and Chief Operating Officer of SpectRx, Inc. From 1986
to 1992,  Mr.  Ignotz was Senior Vice  President of Allergan  Humphrey,  Inc., a
medical  electronics  company.  From 1985 to 1986,  he was President of Humphrey
Instruments  Limited-SKB,  a medical electronics company, and from 1980 to 1985,
Mr.  Ignotz  was  President  of  Humphrey   Instruments  GmbH,  also  a  medical
electronics company. Mr. Ignotz also served on the Board of Directors of Vismed,


                                       2



Inc.,  d/b/a Dicon from 1992 to June 2000. Mr. Ignotz  received a B.A. degree in
Sociology and Political  Science from San Jose  University and an M.B.A.  degree
from Pepperdine  University.  Mr. Ignotz has served as a trustee of Pennsylvania
College of Optometry and Audiology since 1990, a director of AeroVectrix,  Inc.,
a drug  delivery  company,  since August  2005,  and as a member of the American
Diabetes  Association  and the American  Marketing  Association  of the American
Association of Diabetes Education.

      John C. Pingree has been a director since April 2004.  From August 2001 to
March 2004,  Mr. Pingree was the Executive  Director of the Semnani  Foundation,
which funds projects to assist women and children in developing countries.  From
July 1998 to July 2001,  Mr.  Pingree was a Mission  President for the Church of
Jesus Christ of Latter-day Saints,  serving in Mexico City, Mexico. From 1977 to
1997,  Mr.  Pingree was  General  Manager  and Chief  Executive  Officer of Utah
Transit  Authority.  From 1970 to 1975, he was Director of Marketing for Memorex
Corporation. From 1967 to 1970, Mr. Pingree was Regional Manager, Sales Planning
at Xerox  Corporation.  He also  currently  serves as a member of the Utah State
Board of Education.  Mr.  Pingree  received a B.A.  degree in Economics from the
University of Utah and an M.B.A. degree from the Harvard Business School.

Board Meetings and Committees

      The size of the Board of  Directors  of the Company for the coming year is
four members.  Three of the directors,  or a majority of the Board of Directors,
are independent  directors.  The independent  directors have regularly scheduled
meetings at which only independent  directors are present. The term of office of
each  director  is  for  a  period  of  one  year  or  until  the  election  and
qualification  of his  successor.  The Board of  Directors  held a total of four
meetings  during the fiscal year ended December 31, 2006. No directors  attended
fewer than 75% of all meetings of the Board of Directors  during the 2005 fiscal
year.

      Unless authority is withheld by your Proxy, it is intended that the common
stock represented by your Proxy will be voted for the respective nominees listed
above.  If any nominee should not serve for any reason,  the Proxy will be voted
for such person as shall be designated by the Board of Directors to replace such
nominee. The Board of Directors has no reason to expect that any nominee will be
unable to serve.  There is no  arrangement  between any of the  nominees and any
other  person or  persons  pursuant  to which he was or is to be  selected  as a
director.

      There  are  three  committees  of  the  Board  of  Directors,  which  meet
periodically during the year: the Audit Committee,  the Compensation  Committee,
and the Nominating and Corporate Governance Committee.

      The Audit  Committee  directs the  auditing  activities  of the  Company's
internal auditors and registered public independent  accounting firm and reviews
the services performed by the registered public independent  accounting firm and
evaluates the Company's  accounting  practices and  procedures and its system of
internal accounting  controls.  The Audit Committee consists of Messrs. Keith D.
Ignotz (Chairman of the Committee),  Randall A. Mackey,  John C. Pingree and Dr.
David M. Silver.  During 2006,  the Audit  Committee  met on one  occasion.  The
Company's  Board of Directors  has  determined  that Keith D. Ignotz and John C.
Pingree,  who currently  serve as directors of the Company as well as members of
the  Company's  audit  committee,  are  independent  audit  committee  financial
experts.

      The Compensation Committee is responsible for recommending to the Board of
Directors for approval the annual  compensation of each executive officer of the
Company,  developing  policy in the areas of compensation  and fringe  benefits,
contribution under the 401(k) Retirement Savings Plan, granting of options under
the stock option plans,  and creating other  employee  compensation  plans.  The
Compensation  Committee consists of Messrs. Keith D. Ignotz,  Randall A. Mackey,
John C. Pingree and Dr.  David M. Silver  (Chairman  of the  Committee).  During
2006, the Compensation Committee met on one occasion.

      The Nominating and Corporate Governance  Committee identifies  individuals
qualified to become  board  members  consistent  with  criteria  approved by the
board,  recommends  to the board the  persons to be  nominated  by the board for
election as directors at a meeting of shareholders,  and develops and recommends
to the  board a set of  corporate  governance  principles.  The  Nominating  and
Corporate  Governance  Committee  consists of Messrs.  Keith D. Ignotz,  John C.
Pingree (Chairman of the Committee) and Dr. David M. Silver.  The Nominating and
Corporate Governance Committee is composed solely of independent directors.


                                       3



Director Nominating Process

      The process for identifying and evaluating  nominees for directors include
the following  steps:  (1) the  Nominating and Corporate  Governance  Committee,
Chairman of the Board or other board members  identify a need to fill  vacancies
or add newly  created  directorships;  (2) the  Chairman of the  Nominating  and
Corporate  Governance  Committee  initiates  a search and seeks input from board
members and senior  management  and, if necessary,  obtains advice from legal or
other  advisors  (but  does not  hire an  outside  search  firm);  (3)  director
candidates,  including  any  candidates  properly  proposed by  shareholders  in
accordance  with the  Company's  bylaws,  are  identified  and  presented to the
Nominating  and Corporate  Governance  Committee;  (4) initial  interviews  with
candidates  are  conducted  by the  Chairman  of the  Nominating  and  Corporate
Governance  Committee;  (5) the  Nominating and Corporate  Governance  Committee
meets to consider and approve final  candidate(s) and conduct further interviews
as necessary;  and (6) the Nominating and Corporate  Governance  Committee makes
recommendations  to the board for  inclusion  in the slate of  directors  at the
annual meeting.  The evaluation  process will be the same whether the nominee is
recommended by a shareholder or by a member of the Board of Directors.

      The Nominating and Corporate  Governance  Committee will consider nominees
proposed by shareholders.  To recommend a prospective nominee for the Nominating
and Corporate Governance Committee's consideration,  shareholders may submit the
candidate's name and qualifications to: Luis A. Mostacero, Controller, Treasurer
and Secretary,  Paradigm  Medical  Industries,  Inc., 2355 South 1070 East, Salt
Lake City, Utah 84119.  Recommendations  from  shareholders for nominees must be
received by Mr.  Mostacero not later than the date set forth under "Deadline for
Receipt of Shareholder's Proposals for Annual Meeting to be Held in August 2008"
below.

      The Nominating and Corporate  Governance  Committee operates pursuant to a
written  charter.  The full text of the charter is  published  on the  Company's
website at www.paradigm-medical.com.  Shareholders may also obtain a copy of the
charter  without charge by writing to: Luis A. Mostacero,  Controller,  Paradigm
Medical Industries, Inc., 2355 South 1070 East, Salt Lake City, Utah 84119.

Meetings of Non-Management Directors

      The Company's  nonmanagement  directors  regularly meet without management
participation.  In addition, an executive session including only the independent
directors is held at least annually.

Shareholder Communications with the Board of Directors

      Shareholders  who wish to  communicate  with the Board of  Directors  or a
particular  director may send a letter to Luis A.  Mostacero,  Vice President of
Finance, Treasurer and Secretary,  Paradigm Medical Industries, Inc., 2355 South
1070 East, Salt Lake City, Utah 84119. The mailing envelope must contain a clear
notation   indicating   that  the  enclosed   letter  is  a   "Shareholder-Board
Communication" or  "Shareholder-Director  Communication."  All such letters must
identify  the author as a  shareholder  and clearly  state  whether the intended
recipients  are all members of the board or just  certain  specified  individual
directors.  The  Company's  Secretary  will make copies of all such  letters and
circulate them to the appropriate director or directors.

Appointment of New President and Chief Executive Officer

      On January 5, 2006,  Raymond P.L.  Cannefax was appointed as President and
Chief  Executive  Officer,  replacing  John Y.  Yoon  who had  served  in  those
positions  from March 18,  2004 to  December  31,  2005.  Mr.  Yoon  resigned as
President and Chief Executive  Officer,  effective  December 31, 2005, to pursue
other opportunities.

Appointment of New Vice President of Finance and New Vice President of Sales and
Marketing,  New Vice President of International Sales, and New Vice President of
Operations.

      On March 20, 2006,  Luis A.  Mostacero was appointed as Vice  President of
Finance.  Mr.  Mostacero  previously  served as  Controller  from June,  2000 to
September,  2005.  On January 4, 2006,  Alfred B. Franklin was appointed as Vice
President of Domestic  Sales,  replacing  Michael S. Austin who resigned as Vice
President  of Sales  and  Marketing  on  November  28,  2006,  to  pursue  other
opportunities.  On March 29,  2006,  Christina  M. Conner was  appointed as Vice
President  of  International  Sales;  and Julio  Maximo  was  appointed  as Vice
President of  Operations.  On June 25, 2007,  Steven  Davis was  appointed  Vice
President of Sales and Marketing,  replacing  Alfred B. Franklin who resigned on
May 14, 2007, to pursue other opportunities, and Charles Pritchard was appointed
Domestic Sales Manager.


                                       4



Executive Officers

      The following sets forth certain information with respect to the executive
officers of the Company:

         Name                   Age                   Title
      ---------------------     ---    --------------------------------------
      Raymond P.L. Cannefax     59     President and  Chief Executive Officer

      Raymond P.L.  Cannefax  has served as the  Company's  President  and Chief
Executive  Officer since January 5, 2006. Mr. Cannefax  previously served as the
Company's  Vice  President of Sales and Marketing from January 2003 to May 2005.
From May 2005 to January  2006,  Mr.  Cannefax  served as Vice  President of the
Asia/Pacific Region for Sonomed, Inc., a manufacturer of ophthalmic products and
a wholly owned  subsidiary of Escalon Medical Corp. From January 2002 to January
2003,  Mr.  Cannefax was Vice  President of Business  Development  and Sales for
Vermax,  Inc., a  manufacturer  of products for hotel  properties.  From 1996 to
January 2002, he was  President,  Chief  Operating  Officer and founder of Aspen
Network, Inc., a software development and e-commerce company. From 1992 to 1996,
Mr. Cannefax was President and Chief Executive Officer of Apollo Telecom,  Inc.,
a  telecommunications  company.  From  1986 to  1992,  he was a  Regional  Sales
Director and a Senior District Manager of Sprint Communications Corporation. Mr.
Cannefax received a B.S. degree in Psychology and Zoology from the University of
Utah.

Corporate Governance

      Corporate  Governance  Guidelines.  The Board of Directors has adopted the
Paradigm  Medical  Industries,  Inc.  Corporate  Governance  Guidelines.   These
guidelines  outline the  functions  of the board,  director  qualifications  and
responsibilities,  and  various  processes  and  procedures  designed  to insure
effective and  responsive  governance.  The guidelines are reviewed from time to
time in response to regulatory  requirements  and best practices and are revised
accordingly.  The full text of the  guidelines  is  published  on the  Company's
website  at  www.paradigm-medical.com.   A  copy  of  the  Corporate  Governance
Guidelines may also be obtained at no charge by written request to the attention
of Luis A.  Mostacero,  Vice  President  of Finance,  Treasurer  and  Secretary,
Paradigm  Medical  Industries,  Inc., 2355 South 1070 East, Salt Lake City, Utah
84119.

      Code of Business  Conduct.  All of the Company's  officers,  employees and
directors are required to comply with the Company's Code of Business Conduct and
Ethics to help insure that the  Company's  business is conducted  in  accordance
with appropriate  standards of ethical behavior.  The Company's Code of Business
Conduct and Ethics covers all areas of professional conduct,  including customer
relationships,  conflicts of interest,  insider trading,  financial disclosures,
intellectual  property  and  confidential  information,   as  well  as  requires
adherence to all laws and  regulations  applicable  to the  Company's  business.
Employees are required to report any  violations or suspected  violations of the
Code.  The Code includes an anti-  retaliation  statement.  The full text of the
Code of Business  Conduct and Ethics is  published on the  Company's  website at
www.paradigm-medical.com.  A copy of the Code of Business Conduct and Ethics may
also be obtained  at no charge by written  request to the  attention  of Luis A.
Mostacero, Vice President of Finance, Treasurer and Secretary,  Paradigm Medical
Industries, Inc., 2355 South 1070 East, Salt Lake City, Utah 84119.

Executive Compensation

      The following  table sets forth,  for each of the last three fiscal years,
the  compensation  received  by  Raymond  P.L.  Cannefax,  President  and  Chief
Executive  Officer,  and other executive officers whose salary and bonus for all
services in all capacities  exceed  $100,000 for the fiscal years ended December
31, 2006, 2005 and 2004.



                                       5




                                                 Summary Compensation Table


                                                                                      Change in
                                                                                       Pension
                                                                                      Value and
                                                                        Non-Equity   Non-qualified
                                                                        Incentive      Deferred
                                                                           Plan         Compen-      All Other
Name and                                           Stock    Option        Compen-       sation        Compen-
Principal Position    Year   Salary$    Bonus($)   Awards   Awards($)     sation        Earnings       sation      Total
------------------    ----   --------   --------   ------   ---------   ----------   -------------   ----------   --------
                                                                                       
Raymond P.L.          2006   $127,940      -         -          -            -             -              -       $127,940
Cannefax  President   2005     64,285      -         -          -            -             -              -         64,285
and Chief Executive   2004          0      -         -          -            -             -              -              0
Officer(1)

----------------------
      (1)   Mr.  Cannefax has served as President  and Chief  Executive  Officer
            since January 5, 2006.




                                   Supplemental All Other Compensation Table

                                                                  Registrant
                                                                   Contribu-               Dividends
                Perks                                              tions to                   or
                 and                                 Payments/     Defined                 Earnings
                Other        Tax       Discounted    Accruals      Contribu-               on Stock
               Personal   Reimburse-   Securities    on Termin-      tion      Insurance   or Option
Name           Benefits     ments      Purchases    ation Plans      Plans     Premiums     Awards      Other
------------   --------   ----------   ----------   -----------   ----------   ---------   ----------   -----
                                                                                
Raymond P.L.       -           -            -            -             -           -           -          -
Cannefax





                                                Grants of Plan-Based Awards


                        Estimated Future Payouts Under     Estimated Future Payouts
                          Non-Equity Incentive Plan      Under Equity Incentive Plan
                                    Awards                          Awards
                        ------------------------------   ----------------------------               All Other
                                                                                        All Other    Option
                                                                                          Stock      Awards:
                                                                                         Awards:    Number of    Exercise
                                                                                        Number of   Securities   or Base
                                                                                        Shares of     Under-     Price of
                                                                                         Stock or     lying       Option
               Grant     Threshold   Target   Maximum    Threshold   Target   Maximum     Units      Options      Awards
Name            Date        ($)       ($)       ($)         (#)       (#)       ($)        (#)         (#)        ($/Sh)
------------   ------    ---------   ------   -------    ---------   ------   -------   ---------   ----------   --------
                                                                                   
Raymond P.L.   1/5/06        -         -         -           -          -        -          -       4,500,000      $.01
Cannefax




                                                            6






                                           Outstanding Equity Awards At Fiscal Year End

                                                                                                                       Equity
                                                                                                          Equity     Incentive
                                                                                                         Incentive      Plan
                                                                                                           Plan        Awards:
                                                                                                          Awards      Market or
                                              Equity                                                     Number of     Payout
                                            Incentive                                         Market      Unearned    Value of
                              Number of     Pan Awards                             Number    Value of     Shares,     Unearned
                Number of     Securities    Number of                                of      Shares or   Units or      Shares,
                Securities    Underlying    Securities                           Shares or   Units of      Other      Units or
                Underlying   Unexercised    Underlying                           Units of      Stock       Rights      Other
               Unexercised     Options:    Unexercised    Option                   Stock     That Have   That Have   Rights That
                 Options         (#)         Unearned    Exercise     Option     Held That      Not         Not       Have Not
                   (#)         Unexer-       Options      Price     Expiration   Have Not      Vested      Vested      Vested
Name           Exercisable     cisable         (#)         ($)         Date      Vested(#)      ($)         (#)          ($)
------------   -----------   -----------   -----------   --------   ----------   ---------   ---------   ---------   -----------
                                                                                          
Raymond P.L.        0             0             -           -            -           -           -           -            -
Cannefax


                Option Exercises and Stock Vested for Fiscal 2006


                        Option Awards                      Stock Awards
               -------------------------------   -------------------------------
                  Number of                        Number of
               Shares Acquired  Value Realized   Shares Acquired  Value Realized
                 on Exercise     on Exercise       on Vesting       on Vesting
Name                 (#)              ($)              (#)              ($)
------------   ---------------  --------------   ---------------  --------------
Raymond P.L.          0                -                0                -
Cannefax


                        Pension Benefits for Fiscal 2006

                           Number of
                             Years     Present Value of
                           Credited       Accumulated      Payments During
                            Service         Benefit        Last Fiscal Year
Name           Plan Name      (#)             ($)                ($)
------------   ---------   ---------   -----------------   ----------------
Raymond P.L.
Cannefax         None          -               -                  -


Director Compensation

        Outside  directors  are  currently  not paid a director's  fee for their
services but are reimbursed for their expenses in attending  board and committee
meetings.  Directors  are not  precluded  from  serving the Company in any other
capacity and receiving  compensation  therefore.  The directors were not granted
any options to purchase  shares of the  Company's  common  stock  during 2005 or
2006.



                                       7




                                    Director Compensation for Fiscal 2006

                                                                         Change in
                                                                       Pension Value
                           Fees                                             and
                        Earned or                       Non-Equity     Nonqualified
                         Paid In    Stock    Option   Incentive Plan     Deferred        All Other
                           Cash     Awards   Awards    Compensation    Compensation    Compensation   Total
Name                       ($)       ($)      ($)           ($)          Earnings           ($)        ($)
---------------------   ---------   ------   ------   --------------   -------------   ------------   -----
                                                                                 
Keith D. Ignotz             0         -        -             -               -               -          0
Randall A. Mackey           0         -        -             -               -               -          0
John C. Pingree             0         -        -             -               -               -          0
David M. Silver, PhD.       0         -        -             -               -               -          0


Employee 401(k) Plan

        In October  1996,  the  Company's  Board of  Directors  adopted a 401(k)
Retirement  Savings  Plan.  Under the terms of the 401(k) plan,  effective as of
November  1,  1996,  the  Company  may  make  discretionary   employer  matching
contributions  to its employees who choose to  participate in the plan. The plan
allows the board to determine the amount of the contribution at the beginning of
each  year.  The  board  adopted a  contribution  formula  specifying  that such
discretionary   employer  matching   contributions   would  equal  100%  of  the
participating  employee's contribution to the plan up to a maximum discretionary
employee  contribution  of 3% of a  participating  employee's  compensation,  as
defined by the plan. All persons who have completed at least six months' service
with the Company and satisfy other plan requirements are eligible to participate
in the plan. The plan is currently  available to the Company's  employees at the
employees' expense with no matching contribution from the Company.

1995 Stock Option Plan

        The  Company  adopted  a 1995  Stock  Option  Plan,  for  the  officers,
employees,  directors and  consultants  of its company on November 7, 1995.  The
plan  authorized  the granting of stock  options to purchase an aggregate of not
more than 300,000 shares of its common stock. On February 16, 1996,  options for
substantially  all 300,000  shares were granted.  On June 9, 1997, the Company's
shareholders  approved an amendment to the plan to increase the number of shares
of common stock reserved for issuance  thereunder from 300,000 shares to 600,000
shares. On September 3, 1998, the Company's  shareholders  approved an amendment
to the plan to  increase  the  number of shares of  common  stock  reserved  for
issuance  thereunder  from 600,000 shares to 1,200,000  shares.  On November 29,
2000, the Company's  shareholders  approved an amendment to the plan to increase
the number of shares of common  stock  reserved  for  issuance  thereunder  from
1,200,000  shares to 1,700,000  shares.  On September  11, 2001,  the  Company's
shareholders  approved an amendment to the plan to increase the number of shares
of common stock  reserved  for  issuance  thereunder  from  1,700,000  shares to
2,700,000  shares.  On June 13, 2003,  the  Company's  shareholders  approved an
amendment to the plan to increase the member of shares of common stock  reserved
for issuance  thereunder from 2,700,000 shares to 3,700,000  shares. On July 11,
2005, the Company's  shareholders  approved an amendment to the plan to increase
the number of shares of common  stock  reserved  for  issuance  thereunder  from
3,700,000  shares  to  5,000,000  shares.  On August  31,  2006,  the  Company's
shareholders  approved an amendment to the plan to increase the number of shares
of common stock  reserved  for  issuance  thereunder  from  5,000,000  shares to
8,000,000 shares.

        The  compensation  committee  administers the 1995 Stock Option Plan. In
general, the compensation  committee will select the person to whom options will
be granted  and will  determine,  subject to the terms of the plan,  the number,
exercise,  and other provisions of such options.  Options granted under the plan
will become  exercisable at such times as may be determined by the  compensation
committee. Options granted under the plan may be either incentive stock options,
as such term is defined in the Internal  Revenue  Code, or  non-incentive  stock
options.  Incentive  stock  options  may  only be  granted  to  persons  who are
employees.  Non-incentive stock options may be granted to any person, including,
but not  limited  to, its  employees,  independent  agents,  consultants  as the
compensation  committee  believes has contributed,  or will  contribute,  to the
Company's success.  The compensation  committee determines the exercise price of
options granted under the 1995 Stock Option Plan,  provided that, in the case of
incentive  stock options,  such price is not less than 100% (110% in the case of
incentive  stock options granted to holders of 10% of voting power of its stock)
of the fair  market  value (as  defined in the plan) of the common  stock on the
date of grant. The aggregate fair market value (determined at the time of option
grant) of stock with respect to which incentive stock options become exercisable
for the first time in any year cannot exceed $100,000.

        The term of each option  shall not be more than ten years (five years in
the case of  incentive  stock  options  granted  to holders of 10% of the voting
power of its stock) from the date of grant.  The Board of Directors  has a right


                                       8



to amend, suspend or terminate the 1995 Stock Option Plan at any time; provided,
however, that unless ratified by its shareholders, no amendment or change in the
plan will be effective  that would  increase the total number of shares that may
be issued under the plan,  materially  increase the benefits accruing to persons
granted under the plan or materially  modify the  requirements as to eligibility
and  participation in the plan. No amendment,  supervision or termination of the
plan  shall,  without  the  consent  of an  employee  to  whom an  option  shall
heretofore  have been  granted,  affect the rights of such  employee  under such
option.

Employment Agreements

        The Company  entered  into an  employment  agreement  with  Raymond P.L.
Cannefax, which commenced on January 5, 2006 and expires on January 5, 2007. The
employment  agreement  requires Mr. Cannefax to devote  substantially all of his
working time as the Company's  President and Chief Executive Officer,  providing
that he may be  terminated  for  "cause"  (as  provided  in the  agreement)  and
prohibits  him from  competing  with the  Company  for two years  following  the
termination of his employment  agreement.  The employment agreement provides for
the payment of an initial base salary of $125,000. The employment agreement also
provides  for  salary  increases  and  bonuses  as  shall be  determined  at the
discretion of the Board of Directors, with the first review of the annual salary
to be made as of June 30, 2006. The employment  agreement  further  provides for
the  issuance of stock  options to purchase  4,500,000  shares of the  Company's
common  stock at $.01 per  share.  The  options  vest in  twelve  equal  monthly
installments of 375,000 shares,  beginning on February 5, 2006 until such shares
are vested.

        The Company  entered into an amendment to the employment  agreement with
Mr. Cannefax,  which extends the term of the employment agreement for a one year
period  from  January  5,  2007 to  January  5,  2008.  Under  the  terms of the
amendment,  Mr. Cannefax's  annual base salary increased to $150,000,  effective
May 27, 2007. The initial base salary in the employment  agreement dated January
5, 2006 was  $125,000,  which  the Board of  Directors  increased  to  $140,000,
effective  as of October 1, 2006.  The  amendment  provides  for the granting of
additional  stock options to Mr.  Cannefax to purchase  4,500,000  shares of the
Company's common stock at $.01 per share. These options vest in 12 equal monthly
installments  of 375,000  shares,  beginning  on  September  20, 2007 until such
shares are vested.

        In the event of a change of control of the Company, then all outstanding
stock options granted to Mr. Cannefax shall be immediately  vested.  A change of
control shall be deemed to have occurred if (i) a tender offer shall be made and
consummated  for the  ownership  of more than 25% of the  Company's  outstanding
shares;   (ii)  the  Company  shall  be  merged  or  consolidated  with  another
corporation and, as a result,  less than 25% of the outstanding common shares of
the  surviving  corporation  shall be owned in the  aggregate  by the  Company's
former  shareholders,  as the same shall  have  listed  prior to such  merger or
consolidation;  (iii) the  Company  shall sell all or  substantially  all of its
assets  to  another  corporation  that  is  not a  wholly  owned  subsidiary  or
affiliate;  (iv)  as a  result  of any  contested  election  for  the  Board  of
Directors,  or any tender or exchange offer,  merger of business  combination or
sale of assets,  the persons  who were  directors  of the Company  before such a
transaction  shall cease to constitute a majority of the Board of Directors;  or
(v) a person other than an officer or director of the Company shall acquire more
than 20% of the outstanding shares of common stock of the Company.

        The Company  entered  into an  employment  agreement  with John Y. Yoon,
which  commenced  on March 18,  2004 and was to expire  on March 18,  2007.  The
employment  agreement  required  Mr.  Yoon to  devote  substantially  all of his
working time as the Company's  President and Chief Executive Officer,  providing
that he could be  terminated  for  "cause"  (as  defined in the  agreement)  and
prohibited  him from  competing  with the  Company for two years  following  the
termination of his employment  agreement.  The employment agreement provided for
the payment of an initial  base  salary of  $175,000,  effective  as of April 1,
2004. The employment agreement also provided for salary increases and bonuses as
shall be determined at the discretion of the Board of Directors.  The employment
agreement  further  provided  for the  issuance  of stock  options  to  purchase
1,000,000  shares of the Company's  common stock at $.13 per share.  The options
were to vest in 36 equal monthly  installments  of 27,778  shares,  beginning on
April 30, 2004 until such shares were vested. Mr. Yoon resigned as President and
Chief  Executive  Officer of the  Company on December  31, 2005 to pursue  other
opportunities. At the time of his resignation, stock options to purchase 583,338
shares of the  Company's  common stock were vested.  Under the terms of the 1995
Stock Option Plan, the vested options terminated on March 31, 2006.

        The Company  entered into an employment  agreement with Aziz A. Mohabbat
on October 5, 2004,  which was effective as of April 1, 2004,  and was to expire
on March 18, 2006.  The  employment  agreement  required Mr.  Mohabbat to devote
substantially  all of his  working  time  as the  Company's  Vice  President  of
Operations and Chief Operating Officer, provided that he could be terminated for
"cause" (as defined in the agreement) and prohibited him from competing with the
Company for two years following the termination of the employment agreement. The
employment  agreement  provided  for the  payment of an initial  base  salary of
$144,500,  effective as of April 1, 2004. The employment agreement also provided
for salary increases and bonuses as shall be determined at the discretion of the
Company's Board of Directors.  The employment agreement further provided for the

                                       9



issuance of stock options to purchase  200,000  shares of the  Company's  common
stock  at $.12  per  share.  These  options  were to  vest in 36  equal  monthly
installments  of 5,556  shares,  beginning on April 30, 2004,  until such shares
were vested.  Mr.  Mohabbat  resigned as Vice  President of Operations and Chief
Operating  Officer  of  the  Company  on  November  15,  2005  to  pursue  other
opportunities. At the time of his resignation, stock options to purchase 105,564
shares of the  Company's  common stock were vested.  Under the terms of the 1995
Stock Option Plan, the vested options terminated on February 13, 2006.

Retirement Agreement

        On May 6, 1999, the Company's  Board of Directors  approved  resolutions
relating to the retirement of John M. Hemmer, then Vice President of Finance and
Chief Financial Officer of the Company.  The board resolutions provided that Mr.
Hemmer's annual salary of $120,000 per annum was to continue until June 1, 1999,
at which time his employment  contract and change of control  agreement with the
Company  would  terminate and he would become an  independent  consultant to the
Company.  As a  consultant,  Mr.  Hemmer was to  receive  an initial  payment of
$12,500 with annual  payments  thereafter of $25,000 payable on January 1, 2000,
2001 and 2002, and a final payment of $12,500  payable on January 1, 2003, for a
total consulting contract of $100,000.

        In  addition,  the board  resolutions  provided  that the Company was to
issue to Mr. Hemmer warrants to purchase 125,000 shares of common stock at $2.63
per share,  exerciseable  for a period of five years,  and  warrants to purchase
75,000 shares of common stock at $7.50 per share,  exerciseable  for a period of
five years,  but such warrants were not to be issued until Mr. Hemmer  exercised
all of the warrants to purchase  125,000  common shares at $2.63 per share.  The
Company  has  paid a  total  of  $87,500  to Mr.  Hemmer  under  the  consulting
agreement.

        On May 30, 2006,  the Company  entered into an agreement with Mr. Hemmer
in which he  acknowledged  that the Company owed him a total of $12,500 for past
services he rendered to the Company,  including as a consultant, and the Company
agreed to pay him the sum of $12,500 in twelve  monthly  installments  of $1,000
each and a final  monthly  payment  of  $500.  The  Company  has paid a total of
$12,500 to Mr. Hemmer under this agreement.

Certain Relationships and Related Transactions

        The information set forth herein describes certain  transactions between
the Company and certain affiliated parties. Future transactions, if any, will be
approved by a majority of the disinterested members and will be on terms no less
favorable  to the Company  than those that could be obtained  from  unaffiliated
parties.

        Randall A. Mackey, a director since January 21, 2000, and from September
1995 to September  3, 1998 and  Chairman of the Board since August 30, 2002,  is
president and a shareholder  of the law firm of Mackey Price  Thompson & Ostler,
which  rendered  legal services in connection  with various  corporate  matters.
Legal fees and expenses  paid to Mackey  Price  Thompson & Ostler for the fiscal
years  ended  December  31,  2006  and  2005,  totaled  $148,000  and  $220,000,
respectively. In addition, on April 7, 2005 the Company issued 250,000 shares of
common stock to Mackey  Price  Thompson & Ostler in payment for $22,500 in legal
services. As of December 31, 2006, the Company owed this firm $133,850, which is
included in accounts payable.

Report of the Audit Committee

        The  Company has an Audit  Committee  consisting  of four  nonmanagement
directors,  Randall A. Mackey, Keith D. Ignotz, John C. Pingree and Dr. David M.
Silver.  Three of the members of the audit committee are considered  independent
and  qualified in  accordance  with  applicable  independent  director and audit
committee  listing  standards.  The  Company's  Board of Directors has adopted a
written charter for the Audit Committee.

        During  the year  2006 the  Audit  Committee  met one  time.  The  Audit
Committee has met with management and discussed the Company's internal controls,
the quality of the Company's  financial  reporting,  the results of internal and
external audit examinations,  and the audited financial statements. In addition,
the Audit Committee has met with the Company's independent  auditors,  Chisholm,
Bierwolf & Nilson,  and  discussed  all matters  required to be discussed by the
auditors with the Audit Committee  under Statement on Auditing  Standards No. 61
(communication  with  audit  committees).   The  Audit  Committee  received  and
discussed with the auditors  their annual  written report on their  independence
from the Company and its management,  which is made under Independence Standards
Board  Standard No. 1  (independence  discussions  with audit  committees),  and
considered  with the auditors  whether the  provision  of financial  information
systems design and implementation and other non- audit services provided by them
to the Company during 2006 was compatible with the auditors' independence.

        In  performing  these  functions,  the Audit  Committee  acts only in an
oversight  capacity.  In its oversight role, the Audit  Committee  relies on the
work and assurances of the Company's  management,  which is responsible  for the


                                       10



integrity of the Company's  internal  controls and its financial  statements and
reports,  and  the  Company's  independent  auditors,  who are  responsible  for
performing  an  independent  audit  of the  Company's  financial  statements  in
accordance with generally  accepted auditing  standards and for issuing a report
on these financial statements.

        Pursuant to the  reviews  and  discussions  described  above,  the Audit
Committee  recommended  to the Board of  Directors  that the  audited  financial
statements  be included in the  Company's  Annual  Report on Form 10-KSB for the
fiscal year ended  December 31, 2006 for filing with the Securities and Exchange
Commission.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

        Section  16(a)  of the  Securities  Exchange  Act of 1934  requires  the
Company's executive officers, directors and persons who own more than 10% of any
class of the  Company's  Common Stock to file initial  reports of ownership  and
periodic  changes  of  ownership  of the  Company's  Common  Stock with the U.S.
Securities  and Exchange  Commission.  Such persons are also required to furnish
the Company with copies of all Section 16(a) reports they file.  Based solely on
its review of the copies of such  reports  received by it with respect to fiscal
2006, or written  representations  from certain reporting  persons,  the Company
believes that its  directors,  officers and greater than 10%  beneficial  owners
complied with all Section 16(a) filing requirements applicable to them.

Security Ownership of Certain Beneficial Owners and Management

        The  following  table sets forth  certain  information  with  respect to
beneficial ownership of the Company's common stock as of August 20, 2007 for (i)
each  executive  officer  (ii) each  director,  (iii) each  person  known to the
Company to be the beneficial  owner of more than 5% of the  outstanding  shares,
and (iv) all directors and officers as a group.


                                                                   Percent of
    Name and Address(1)                        Number of Shares     Ownership
    -------------------                        ----------------    ----------
    Raymond P.L. Cannefax (2)                      9,000,000          3.6%
    Dr. David M. Silver (2)                          761,166             *
    Randall A. Mackey (2)                            725,000             *
    Keith D. Ignotz (2)                              525,709             *
    John C. Pingree (2)                              431,500             *
                                                   ---------
    Executive officers and directors
       as a group (five persons)                  11,443,375          4.6%

            -----------------
            *Less than 1%.

(1)  Unless otherwise  indicated,  the address of each listed shareholder is c/o
     Paradigm  Medical  Industries,  Inc., 2355 South 1070 West, Salt Lake City,
     Utah, 84119.
(2)  The amounts shown include shares that may be acquired currently,  or within
     60 days after July 31,  2007  through  the  exercise  of stock  options are
     follows:  Mr. Cannefax,  4,500,000 shares; Dr. Silver,  725,000 shares; Mr.
     Mackey,  725,000  shares;  Mr. Ignotz,  525,851  shares;  and Mr.  Pingree,
     275,000 shares.

             APPROVAL OF INCREASE IN THE NUMBER OF AUTHORIZED SHARES

                                   Proposal 2

        The Certificate of  Incorporation  currently  authorizes the issuance of
800,000,000  shares of common stock. As of the record date,  246,866,625  shares
were issued and  outstanding.  There have been 6,753  shares of common stock set
aside and  reserved  in the event that  holders of shares of Series A  preferred
stock elect to convert those shares into shares of common  stock,  10,783 shares
of common  stock set aside and  reserved in the event that  holders of shares of
Series B  preferred  stock elect to convert  those  shares into shares of Common
Stock,  8,750  shares of common  stock set aside and  reserved in the event that
holders of shares of Series D preferred stock elect to convert those shares into
shares of common stock,  13,333 shares of common stock set aside and reserved in
the event that  holders of shares of Series E  preferred  stock elect to convert
those shares into shares of common stock, and 234,550 shares of common stock set
aside and  reserved  in the event that  holders of shares of Series F  preferred
stock elect to convert  those  shares into shares of common  stock,  and 588,235
shares of common stock set aside and reserved in the event  holders of shares of
Series G  preferred  stock elect to convert  those  shares into shares of common
stock.


                                       11



        Between June 10, 1997 and August 14, 2007,  the Company issued (i) stock
options that are currently  outstanding  to executive  officers and employees to
purchase  9,255,000  shares of the  Company's  common  stock at exercise  prices
ranging from $.01 per share to $2.75 per share,  and (ii) stock options that are
currently outstanding to directors to purchase 2,250,000 shares of the Company's
common  stock at  exercise  prices  from $.09 per share to $2.75 per  share.  In
addition, between June 10, 1997 and August 20, 2007, the Company issued warrants
to  individuals  and  entities to purchase a total of  39,059,392  shares of the
Company's  common stock at exercise prices ranging from $.005 per share to $6.75
per share.


         As a result  of the  Company's  prior  financings,  acquisitions,  note
conversions,  and  efforts to provide  incentives  to  officers,  directors  and
employees, the Board of Directors has determined that it is in the best interest
of the  Company and its  stockholders  to amend the first  paragraph  of Article
thereof numbered  "FOURTH" of the Company's  Certificate of  Incorporation  (the
"Amendment")  to increase the  authorized  shares of common stock of the Company
from  800,000,000  shares  to  1,400,000,000  shares.  The text of the  proposed
Amendment  is  attached  hereto as Exhibit I. If the  stockholders  approve  the
Amendment,  the Board of Directors intends to file an Amendment to the Company's
Certificate  of  Incorporation   reflecting  the  Amendment  with  the  Delaware
Secretary of State as soon as practicable following such stockholder approval.

         The  objective  of the increase in the number of  authorized  shares of
common stock is to insure that the Company will have sufficient shares available
for future issuances.  The Board of Directors  believes that it is necessary and
prudent  to  increase  the  authorized  number of shares of common  stock to the
proposed level in order to provide a reserve of shares available for issuance to
meet the Company's business needs as they arise. Although the Board of Directors
has no immediate  plans to issue a significant  number of  additional  shares of
common stock,  except for shares issuable upon conversion of $3,517,367 of notes
and the  exercise of warrants  and of stock  options  previously  granted to the
Company's  officers  and  employees,  such future  business  needs may  include,
without limitation, funding future financings and acquisitions, providing shares
issuable upon conversion of notes and exercise of warrants, and providing equity
incentives to the  Company's  officers,  directors  and employees  through stock
options.

Outstanding Commitments to Issue Shares

         The following table identifies the Company's outstanding commitments to
issue shares, including the shares underlying the convertible notes and warrants
issuable upon conversion of the notes and exercise of the warrants:


                                                  Underlying Shares
              Security                             of Common Stock

            Notes (1)                                  977,046,380
            Warrants (2)                                39,059,392
            Preferred Stock (3)                            862,404
            Stock Options (4)                           11,500,000
                                                   ---------------
                Total                                1,028,468,176

(1)  Assumes full conversion of $3,517,367 of notes issued to AJW Partners, LLC,
     AJW Offshore, Ltd., AJW Qualified Partners, LLC, and New Millennium Capital
     Partners  II, LLC at a  conversion  price of $.0036 per share (based upon a
     market price of $.006 as of July 23, 2007 with a 40% discount).
(2)  Consisting of warrants  exerciseable at prices ranging from $.005 per share
     to $6.75 per share,  including  warrants  issued to AJW Partners,  LLC, AJW
     Offshore,  Ltd., AJW Qualified  Partners,  LLC, and New Millennium  Capital
     Partners  II,  LLC to  purchase  16,534,392  shares of  common  stock at an
     exercise  price of $.20 per share,  exerciseable  through  the period  from
     April 27, 2010 to June 30, 2010,  warrants to purchase 12,000,000 shares of
     common stock at an exercise price of $.10 per share,  exerciseable  through
     the period  from  February  28,  2011 to April 20,  2012,  and  warrants to
     purchase  10,000,000  shares of common stock at an exercise  price of $.005
     per share, exerciseable through June 11, 2012.
(3)  Consisting  of 6,753 shares of common stock  issuable  upon  conversion  of
     5,627  shares of Series A preferred  stock,  10,783  shares of common stock
     issuable upon conversion of 8,986 shares of Series B preferred stock, 8,750
     shares of common stock issuable upon conversion of 5,000 shares of Series D
     preferred stock,  13,333 shares of common stock issuable upon conversion of
     250 shares of Series E  preferred  stock,  234,550  shares of common  stock
     issuable upon  conversion of 4,398.75  shares of Series F preferred  stock,
     and 588,235  shares of common stock  issuable  upon  conversion  of 588,235
     shares of Series G preferred stock.
(4)  Consisting of stock options granted to executive  officers and employees to
     purchase  9,250,000  shares of common stock at exercise prices ranging from
     $.01 per share to $2.75 per share,  and stock options  granted to directors
     to purchase  2,250,000  shares of common stock at exercise  prices  ranging
     from $.01 per share to $2.75 per share.

                                       12



         There are a total of  1,028,468,176  shares  underlying  the  Company's
convertible notes,  warrants,  preferred stock and stock options,  assuming full
conversion of the outstanding  notes and preferred stock and the exercise of all
the outstanding  warrants and stock options. The current number of the Company's
authorized  shares of common stock is  800,000,000  shares.  The large number of
shares of common stock underlying the notes, warrants, preferred stock and stock
options will require the Company to increase  the number of  authorized  shares.
Failure to obtain  stockholder  approval  to increase  the number of  authorized
shares  could result in the  noteholders  commencing  legal  action  against the
Company and foreclosing on all of its assets to recover damages. Any such action
would require the Company to curtail or cease its operations.


Callable Secured Convertible Notes and Warrants

     April 27, 2005 Sale of $2,500,000 in Callable Secured Convertible Notes: To
obtain funding for the Company's ongoing operations,  the Company entered into a
securities  purchase agreement with four accredited  investors on April 27, 2005
for the  sale of (i)  $2,500,000  in  convertible  notes  and (ii)  warrants  to
purchase  16,534,392  shares of its common  stock.  The sale of the  convertible
notes and warrants  occurred in three  traunches and the investors  provided the
Company with an aggregate of $2,500,000 as follows:

o    $850,000 was disbursed on April 27, 2005;
o    $800,000  was  disbursed  on  June  23,  2005  after  the  Company  filed a
     registration  statement  on June 22, 2005 to register  the shares of common
     stock issuable upon conversion of the convertible notes and exercise of the
     warrants; and
o    $850,000  was  disbursed  on  June  30,  2005,  the  effective  date of the
     registration statement.

     Under the terms of the securities  purchase  agreement,  the Company agreed
that it would not,  without the prior written consent of a  majority-in-interest
of the  investors,  negotiate  or contract  with any party to obtain  additional
equity  financing  (including  debt  financing  with an equity  component)  that
involves  (i) the  issuance of common stock at a discount to the market price of
the common  stock on the date of issuance  (taking into account the value of any
warrants or options to acquire common stock in connection  therewith),  (ii) the
issuance of convertible  securities that are convertible  into an  indeterminate
number of shares of common stock,  or (iii) the issuance of warrants  during the
lock-up period  beginning April 27, 2005 and ending on the later of (A) 270 days
from April 27, 2005, and (B) 180 days from the date the  registration  statement
is declared effective.

     In  addition,  the  Company  agreed  not to conduct  any  equity  financing
(including debt financing with an equity  component) during the period beginning
April 27,  2005 and ending two years after the end of the above  lock-up  period
unless it has first  provided  each  investor an option to purchase its pro-rata
share  (based  on the ratio of each  investor's  purchase  under the  securities
purchase  agreement)  of the  securities  being  offered in any proposed  equity
financing. Each investor must be provided written notice describing any proposed
equity financing at least 20 business days prior to the closing of such proposed
equity  financing  and the option must be extended to each  investor  during the
15-day period following delivery of such notice.

     The $2,500,000 in convertible  notes bear interest at 8% per annum from the
date of  issuance.  Interest is  computed on the basis of a 365-day  year and is
payable  quarterly in cash,  with six months of interest  payable up front.  The
interest  rate resets to zero  percent for any month in which the stock price is
greater than 125% of the initial market price,  or $.0945,  for each trading day
during that month. Any amount of principal or interest on the convertible  notes
that is not paid when due will bear  interest  at the rate of 15% per annum from
the date due thereof until such amount is paid. The callable secured convertible
notes mature in three years from the date of issuance,  and are convertible into
the Company's common stock at the noteholders'  option, at the lower of (i) $.09
or (ii) 60% of the average of the three lowest  intraday  trading prices for the
common  stock on the OTC  Bulletin  Board for the 20 trading days before but not
including the conversion date.  Accordingly,  there is no limit on the number of
shares into which the notes may be converted.

     The $2,500,000 in notes are secured by the Company's assets,  including the
Company's inventory,  accounts receivable and intellectual  property.  Moreover,
the  Company  has a call  option  under the terms of the notes.  The call option
provides the Company with the right to prepay all of the outstanding convertible
notes at any time,  provided there is no event of default by the Company and its
stock is trading at or below $.09 per share.  An event of default  includes  the
failure by the Company to pay the principal or interest on the convertible notes
when due or to timely file a  registration  statement as required by the Company
or obtain  effectiveness  with the  Securities  and Exchange  Commission  of the
registration  statement.  Prepayment of the  convertible  notes is to be made in
cash equal to either (i) 125% of the outstanding  principal and accrued interest
for prepayments  occurring within 30 days following the issue date of the notes;
(ii) 130% of the  outstanding  principal  and accrued  interest for  prepayments
occurring  between 31 and 60 days  following  the issue  date of the notes;  and
(iii) 145% of the  outstanding  principal and accrued  interest for  prepayments
occurring after the 60th day following the issue date of the notes.

                                       13


     The warrants are exercisable  until five years from the date of issuance at
a purchase price of $.20 per share. The investors may exercise the warrants on a
cashless  basis if the shares of common  stock  underlying  the warrants are not
then registered pursuant to an effective  registration  statement.  In the event
the investors  exercise the warrants on a cashless  basis,  the Company will not
receive any proceeds therefrom.  In addition, the exercise price of the warrants
will be adjusted in the event the Company  issues  common stock at a price below
market,  with  the  exception  of any  securities  issued  as of the date of the
warrants or issued in connection with the  convertible  notes issued pursuant to
the securities purchase agreement.

     The  noteholders  have agreed to restrict  their  ability to convert  their
callable secured convertible notes or exercise their warrants and receive shares
of our common  stock such that the number of shares of common stock held by them
in the aggregate and their affiliates after such conversion or exercise does not
exceed 4.99% of the then issued and outstanding shares of common stock. However,
the  noteholders  may repeatedly  sell shares of common stock in order to reduce
their ownership percentage, and subsequently convert additional callable secured
convertible  notes.  As of August 20, 2007,  a total of $850,826 in  convertible
notes issued on April 27, 2005 have been converted by the noteholders.

     February 28, 2006 Sale of $1,500,000 in Callable Secured Convertible Notes:
To obtain additional funding for the Company's ongoing  operations,  the Company
entered into a second  securities  purchase  agreement on February 28, 2006 with
the same four accredited investors for the sale of (i) $1,500,000 in convertible
notes and (ii) warrants to purchase  12,000,000  shares of its common stock. The
sale of the  convertible  notes and warrants is to occur in three  traunches and
the  investors  are  obligated  to provide  the  Company  with an  aggregate  of
$1,500,000 as follows:

o    $500,000 was disbursed on February 28, 2006;
o    $500,000  was  disbursed  on  June  28,  2006  after  the  Company  filed a
     registration  statement  on June 15, 2006 to register  the shares of common
     stock  underlying the convertible  notes.  The  registration  statement was
     subsequently  withdrawn on July 25, 2006 and a new  registration  statement
     was filed on  September  21, 2006 to register  60,000,000  shares of common
     stock issuable upon conversion of the convertible notes;

o    $500,000 was  disbursed on April 20, 2007,  the day prior to the  effective
     date of the registration statement on May 1, 2007.

     Under the terms of the February 28, 2006 securities purchase agreement, the
Company  agreed  that it would  not,  without  the prior  written  consent  of a
majority-in-interest  of the investors,  negotiate or contract with any party to
obtain  additional  equity  financing  (including  debt financing with an equity
component)  that  involves (i) the issuance of common stock at a discount to the
market  price of the common  stock on the date of issuance  (taking into account
the value of any  warrants  or  options to acquire  common  stock in  connection
therewith),  (ii) the issuance of convertible  securities  that are  convertible
into an indeterminate number of shares of common stock, or (iii) the issuance of
warrants during the lock-up period beginning February 28, 2006 and ending on the
later of (a) 270 days from  February 28, 2006, or (b) 180 days from the date the
registration statement is declared effective.

     In  addition,  the  Company  agreed  not to conduct  any  equity  financing
(including debt financing with an equity  component) during the period beginning
February 28, 2006 and ending two years after the end of the above lock-up period
unless it first  provided each investor an option to purchase its pro-rata share
(based on the ratio of each  investor's  purchase under the securities  purchase
agreement) of the  securities  being offered in any proposed  equity  financing.
Each investor must be provided  written notice  describing  any proposed  equity
financing at least 20 business days prior to the closing of such proposed equity
financing  and the option must be extended  to each  investor  during the 15-day
period following delivery of such notice.

     The $1,500,000 in convertible  notes bear interest at 8% per annum from the
date of  issuance.  Interest is  computed on the basis of a 365-day  year and is
payable  quarterly in cash,  with six months of interest  payable up front.  The
interest  rate resets to zero  percent for any month in which the stock price is
greater than 125% of the initial market price,  or $.0275,  for each trading day
during that month.  Any amount of principal or interest on the callable  secured
convertible  notes that is not paid when due will bear  interest  at the rate of
15% per  annum  from  the  date due  thereof  until  such  amount  is paid.  The
convertible  notes  mature in three  years  from the date of  issuance,  and are
convertible into the Company's common stock at the noteholders'  option,  at the
lower  of (i) $.02 or (ii)  60% of the  average  of the  three  lowest  intraday
trading prices for the common stock on the OTC Bulletin Board for the 20 trading
days before but not  including the  conversion  date.  Accordingly,  there is no
limit on the number of shares into which the notes may be converted.

     The  $1,500,000 in convertible  notes are secured by the Company's  assets,
including  the  Company's   inventory,   accounts  receivable  and  intellectual
property.  Moreover, the Company has a call option under the terms of the notes.
The call  option  provides  the  Company  with the  right to  prepay  all of the
outstanding convertible notes at any time, provided there is no event of default
by the Company and its stock is trading at or below $.02 per share.  An event of
default  includes the failure by the Company to pay the principal or interest on
the  convertible  notes when due or to timely file a  registration  statement as

                                       14



required by the Company or obtain effectiveness with the Securities and Exchange
Commission of the registration statement. Prepayment of the convertible notes is
to be made in cash equal to either  (a) 125% of the  outstanding  principal  and
accrued  interest for prepayments  occurring  within 30 days following the issue
date of the notes;  (b) 130% of the outstanding  principal and accrued  interest
for prepayments occurring between 31 and 60 days following the issue date of the
notes;  or (c)  145% of the  outstanding  principal  and  accrued  interest  for
prepayments occurring after the 60th day following the issue date of the notes.

     The warrants are exercisable  until five years from the date of issuance at
a purchase price of $.10 per share. The investors may exercise the warrants on a
cashless  basis if the shares of common  stock  underlying  the warrants are not
then registered pursuant to an effective  registration  statement.  In the event
the investors  exercise the warrants on a cashless  basis,  the Company will not
receive any proceeds therefrom.  In addition, the exercise price of the warrants
will be adjusted in the event the Company  issues  common stock at a price below
market,  with  the  exception  of any  securities  issued  as of the date of the
warrants or issued in connection with the  convertible  notes issued pursuant to
the securities purchase agreement.

     The  noteholders  have agreed to restrict  their  ability to convert  their
convertible notes or exercise their warrants and receive shares of the Company's
common  stock such that the number of shares of common stock held by them in the
aggregate and their affiliates after such conversion or exercise does not exceed
4.99% of the then issued and outstanding  shares of common stock.  However,  the
noteholders  may repeatedly sell shares of common stock in order to reduce their
ownership percentage,  and subsequently convert additional convertible notes. As
of August 20, 2007, a total of $131,791 in convertible  notes issued on February
28, 2006 had been converted by the noteholders.

     June 11, 2007 Sale of $500,000 in Callable  Secured  Convertible  Notes: To
obtain further funding for the Company's ongoing operations, the Company entered
into a third securities  purchase  agreement on June 11, 2007 with the same four
accredited   investors  for  the  sale  of  (i)  $500,000  in  callable  secured
convertible notes and (ii) warrants to purchase  10,000,000 shares of its common
stock. The investors disbursed $500,000 to the Company on June 11, 2007.

     Under the terms of the June 11, 2007  securities  purchase  agreement,  the
Company  agreed  that it would  not,  without  the prior  written  consent  of a
majority-in-interest  of the investors,  negotiate or contract with any party to
obtain  additional  equity  financing  (including  debt financing with an equity
component)  that  involves (i) the issuance of common stock at a discount to the
market  price of the common  stock on the date of issuance  (taking into account
the value of any  warrants  or  options to acquire  common  stock in  connection
therewith),  (ii) the issuance of convertible  securities  that are  convertible
into an indeterminate number of shares of common stock, or (iii) the issuance of
warrants  during the lock-up  period  beginning  June 11, 2007 and ending on the
later of (a) 270 days  from  June 11,  2007,  or (b) 180 days  from the date the
registration statement is declared effective.

     In  addition,  the  Company  agreed  not to conduct  any  equity  financing
(including debt financing with an equity  component) during the period beginning
June 11,  2007 and ending two years  after the end of the above  lock-up  period
unless it first  provided each investor an option to purchase its pro-rata share
(based on the ratio of each  investor's  purchase under the securities  purchase
agreement) of the  securities  being offered in any proposed  equity  financing.
Each investor must be provided  written notice  describing  any proposed  equity
financing at least 20 business days prior to the closing of such proposed equity
financing  and the option must be extended  to each  investor  during the 15-day
period following delivery of such notice.

     The $500,000 in  convertible  notes bear  interest at 8% per annum from the
date of  issuance.  Interest is  computed on the basis of a 365-day  year and is
payable  quarterly in cash,  with six months of interest  payable up front.  The
interest  rate resets to zero  percent for any month in which the stock price is
greater than 125% of the initial market price,  or $.0275,  for each trading day
during that month.  Any amount of principal or interest on the callable  secured
convertible  notes that is not paid when due will bear  interest  at the rate of
15% per  annum  from  the  date due  thereof  until  such  amount  is paid.  The
convertible  notes  mature in three  years  from the date of  issuance,  and are
convertible into the Company's common stock at the noteholders'  option,  at the
lower  of (i) $.02 or (ii)  50% of the  average  of the  three  lowest  intraday
trading prices for the common stock on the OTC Bulletin Board for the 20 trading
days before but not  including the  conversion  date.  Accordingly,  there is no
limit on the number of shares into which the notes may be converted.

     The  $500,000 in  convertible  notes are secured by the  Company's  assets,
including  the  Company's   inventory,   accounts  receivable  and  intellectual
property.  Moreover, the Company has a call option under the terms of the notes.
The call  option  provides  the  Company  with the  right to  prepay  all of the
outstanding convertible notes at any time, provided there is no event of default
by the Company and its stock is trading at or below $.10 per share.  An event of
default  includes the failure by the Company to pay the principal or interest on
the  convertible  notes when due or to timely file a  registration  statement as
required by the Company or obtain effectiveness with the Securities and Exchange
Commission of the registration statement. Prepayment of the convertible notes is
to be made in cash equal to either  (a) 125% of the  outstanding  principal  and

                                       15



accrued  interest for prepayments  occurring  within 30 days following the issue
date of the notes;  (b) 130% of the outstanding  principal and accrued  interest
for prepayments occurring between 31 and 60 days following the issue date of the
notes;  or (c)  145% of the  outstanding  principal  and  accrued  interest  for
prepayments occurring after the 60th day following the issue date of the notes.

     The warrants are exercisable until seven years from the date of issuance at
a purchase price of $.005 per share.  The investors may exercise the warrants on
a cashless  basis if the shares of common stock  underlying the warrants are not
then registered pursuant to an effective  registration  statement.  In the event
the investors  exercise the warrants on a cashless  basis,  the Company will not
receive any proceeds therefrom.  In addition, the exercise price of the warrants
will be adjusted in the event the Company  issues  common stock at a price below
market,  with  the  exception  of any  securities  issued  as of the date of the
warrants or issued in connection with the  convertible  notes issued pursuant to
the securities purchase agreement.

     The  noteholders  have agreed to restrict  their  ability to convert  their
convertible notes or exercise their warrants and receive shares of the Company's
common  stock such that the number of shares of common stock held by them in the
aggregate and their affiliates after such conversion or exercise does not exceed
4.99% of the then issued and outstanding  shares of common stock.  However,  the
noteholders  may repeatedly sell shares of common stock in order to reduce their
ownership  percentage,  and subsequently  convert additional  convertible notes,
provided,  however,  that such  conversions  do not exceed  $75,000 per calendar
month,  or the average  daily dollar volume  calculated  during the ten business
days  prior to  conversion  multiplied  by the  number of  trading  days of that
calendar month, per calendar month.

     The Company is required to register the shares of its common stock issuable
upon the  conversion of the  convertible  notes and the exercise of the warrants
that  were  issued  to  the  noteholders  pursuant  to the  securities  purchase
agreement the Company entered in to on June 11, 2007. The registration statement
must be filed with the Securities and Exchange Commission within 60 days of June
11, 2007 closing date and the  effectiveness of the registration is to be within
135 days of such  closing  date.  Penalties of 2% of the  outstanding  principal
balance of the  convertible  notes plus  accrued  interest are to be applied for
each month the  registration  is not  effective  within the required  time.  The
penalty may be paid in cash or stock at the Company's  option.  As of August 20,
2007, none of the convertible  notes issued on June 11, 2007, had been converted
by the noteholders.

Simple Conversion Calculation

     The  number of  shares of common  stock  issuable  upon  conversion  of the
convertible notes issued on April 27, 2005,  February 28, 2006 and June 11, 2007
is  determined  by dividing  that  portion of the  principal  of the notes to be
converted and interest,  if any, by the conversion price. For example,  assuming
conversion of $3,517,367 principal amount of the convertible notes on August 20,
2007  (consisting of $4,500,000 in convertible  notes that were sold to the four
investors pursuant to the securities  purchase  agreements dated April 27, 2005,
February 28, 2006 and June 11, 2007,  less $982,633 in notes that were converted
during the period from June 12, 2005 to August 14, 2007) and a conversion  price
of $.006 per share, the number of shares issuable upon conversion would be:

                     $3,517,367/$.006 = 586,228,000 shares.

The  continuously  adjustable  conversion  price feature of the callable secured
convertible  notes could  require the Company to issue a  substantially  greater
number of shares, which will cause dilution to the existing shareholders.

     The Company's obligation to issue shares upon conversion of the convertible
notes  issued  on April  27,  2005,  February  28,  2006,  and June 11,  2007 is
essentially  limitless.  The  following is an example of the amount of shares of
common stock that are issuable upon conversion of $3,517,367 principal amount of
the convertible notes (excluding accrued interest),  based on market prices 25%,
50%, and 75% below the market price, as of July 23, 2007 of $.006:

                                       16



    % Below     Price Per    With 40%       Number of       % of Outstanding
    Market       Share       Discount    Shares Issuable         Shares*
    ------       --------    --------    ---------------    ----------------
      25%        $.0045       $.0027      1,302,841,000            523.9%
      50%        $.003        $.0018      1,954,093,000            785.8%
      75%        $.0015       $.0009      3,908,186,000          1,571.7%

*Based on 248,666,625 shares outstanding.

     As  illustrated,  the  number  of  shares of  common  stock  issuable  upon
conversion of the Company's callable secured  convertible notes will increase if
the market price of the Company's stock  declines,  which will cause dilution to
the Company's existing shareholders.

The continuously  adjustable  conversion price feature of the convertible  notes
may encourage investors to make short sales in the Company's common stock, which
could have a depressive effect on the price of the Company's common stock.

     The convertible  notes are convertible  into shares of the Company's common
stock at a 40%  discount to the trading  price of the common  stock prior to the
conversion.  The significant  downward pressure on the price of the common stock
as the  noteholders  convert  and sell  material  amounts of common  stock could
encourage short sales by investors.  This could place further downward  pressure
on the price of the common stock.  The noteholders  could sell common stock into
the  market in  anticipation  of  covering  the short sale by  converting  their
securities,  which could cause the further downward pressure on the stock price.
In addition,  not only could the sales of shares  issuable  upon  conversion  or
exercise of notes, warrants and options, but also the mere perception that these
sales could occur, may adversely affect the market price of the common stock.

The  issuance  of shares  upon  conversion  of the  convertible  notes may cause
immediate and substantial dilution to existing shareholders.

     The issuance of shares upon  conversion of convertible  notes may result in
substantial   dilution  to  the  interests  of  other   shareholders  since  the
noteholders  may  ultimately  convert  and  sell  the full  amount  issuable  on
conversion.  Although the noteholders may not convert their convertible notes if
such  conversion  would  cause  them to own more  than  4.99%  of the  Company's
outstanding common stock, this restriction does not prevent the noteholders from
converting  some of  their  holdings  and  then  converting  the  rest of  their
holdings.  In this way,  the  noteholders  could sell more than this limit while
never  holding  more than this  limit.  There is no upper limit on the number of
shares that may be issued,  which will have the effect of further  diluting  the
proportionate  equity  interest  and voting  power of  holders of the  Company's
common stock.

Vote Required and Recommendation of the Board of Directors

     The affirmative vote of the holders of a majority of the outstanding shares
of the  Company's  common stock  entitled to vote at the Annual  Meeting will be
required to approve the proposed amendment, assuming a quorum is present.


     The Board of Directors  recommends that shareholders vote "FOR" approval of
the  amendment to the  Certificate  of  Incorporation  to increase the number of
authorized shares of common stock from 800,000,000 to 1,400,000,000 shares.


               APPROVAL OF AMENDMENT TO THE 1995 STOCK OPTION PLAN

                                   Proposal 3

     The Board of Directors adopted on August 20, 2007,  subject to the approval
by the  shareholders,  an amendment to the Company's 1995 Stock Option Plan. The
amendment  increases  from  8,000,000 to 16,000,000  the number of shares of the
Company's  common stock available for issuance under the 1995 Stock Option Plan.
The  Company  has in the past used,  and  intends  in the  future to use,  stock
options as incentive  devices to motivate and compensate  its salaried  officers
and other key  employees,  and believes that equity  incentives  represented  by
stock  options  enhances the Company's  ability in attracting  and retaining the
best possible persons for positions of significant  responsibility  by providing
its officers and other key employees with additional incentives to contribute to
the Company's success.


                                       17



     Management further believes that the availability of such equity incentives
has served,  and will continue to serve, an important part in the implementation
of the  Company's  acquisition  strategy.  As of August  20,  2007,  options  to
purchase an aggregate of 85,300 shares of common stock have been exercised under
the 1995 plan; as of such date,  options to purchase  4,847,500 shares of common
stock were outstanding under the 1995 Stock Option Plan. Accordingly, options to
purchase only 67,200  shares of common stock remain  available for future grants
under the 1995 Stock Option Plan as of such date.

     The Board of Directors recommends that the shareholders vote "FOR" approval
of the amendment to the 1995 Stock Option Plan.


          RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

                                   Proposal 4

         The independent  public accounting firm of Chisholm,  Bierwolf & Nilson
has been the Company's  registered public  independent  accountants since fiscal
year 2006. The Audit  Committee has  recommended  and the Board of Directors has
appointed Chisholm,  Bierwolf & Nilson for purposes of auditing the consolidated
financial  statements  of the Company for the fiscal  year ending  December  31,
2007. It is anticipated that representatives of Chisholm, Bierwolf & Nilson will
be present at the Annual  Meeting and will be provided an  opportunity to make a
statement  if  they  desire,  and to be  available  to  respond  to  appropriate
questions.

         The  Board  of  Directors   recommends  that  shareholders  vote  "FOR"
ratification of the appointment of Chisholm,  Bierwolf & Nilson as the Company's
registered public independent accountants for fiscal 2007.


                AUDIT FEES, FINANCIAL INFORMATION SYSTEMS DESIGN
                   AND IMPLEMENTATION FEES, AND ALL OTHER FEES

         Fees for the 2006 annual audit of the financial  statements and related
quarterly  review  services were $28,600.  Fees in 2006 related to the review of
registration  statements  and  assistance  in  responding  to SEC comments  were
$3,400. Fees in 2006 for edgarization of filings were $500. Fees in 2006 for tax
return  preparation  were  $3,500.  There were no fees in 2006 for  meetings and
other consultation.

        Fees for the 2005 annual audit of the financial  statements  and related
quarterly  review  services  prepared were $45,000.  Fees in 2005 related to the
review of  registration  statements and assistance in responding to SEC comments
were $8,000. Fees in 2005 for edgarization of filings were $11,000. Fees in 2005
for tax return  preparation  were  $4,000.  Other fees in 2005 for  meetings and
other consultation were $10,000.

                             ADDITIONAL INFORMATION

         The Company will provide without charge to any person from whom a Proxy
is solicited by the Board of Directors, upon the written request of such person,
a copy of the  Company's  Annual  Report on Form 10-K for the fiscal  year ended
December  31,  2006,  excluding  certain  exhibits  thereto,  as filed  with the
Securities and Exchange Commission. Written requests for such information should
be directed to Luis A.  Mostacero,  Vice  President  of Finance,  Treasurer  and
Secretary,  Paradigm Medical  Industries,  Inc., 2355 South 1070 West, Salt Lake
City, Utah 84119.

                                  OTHER MATTERS

         As of the  date  of this  Proxy  Statement,  the  Company  knows  of no
business that will be presented for  consideration  at the Annual  Meeting other
than the items  referred to above.  However,  if any other  matters are properly
brought before the meeting,  it is the intention of the persons named as proxies
in the accompanying  Proxy to vote the shares they represent on such business in
accordance  with their best  judgment.  In order to assure the  presence  of the
necessary  quorum and to vote on the matters to come before the Annual  Meeting,


                                       18



please  indicate your choices on the enclosed Proxy and date, sign and return it
promptly in the postage prepaid envelope provided. The signing and delivery of a
Proxy by no means prevents one from attending the Annual Meeting.

                                        By order of the Board of Directors,

                                        /s/ Luis A. Mostacero


                                        Luis A. Mostacero
                                        Vice President of Finance, Treasurer
                                        and Secretary
September 7, 2007.



























                                       19

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                                                                       EXHIBIT 1
                           TEXT OF PROPOSED AMENDMENT
                                       TO
                          CERTIFICATE OF INCORPORATION
                                       OF
                        PARADIGM MEDICAL INDUSTRIES, INC.



FOURTH:  The  Corporation  is  authorized  to issue two  classes of shares to be
designated, respectively, "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock authorized to be issued is five million (5,000,000)
and the total  number of shares of Common Stock  authorized  to be issued is one
billion two hundred forty million  (1,400,000,000).  The Preferred Stock and the
Common Stock shall each have a par value of $0.001 per share.










                        PARADIGM MEDICAL INDUSTRIES, INC.

                    PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
                                October 12, 2007

                      THIS PROXY SOLICITED ON BEHALF OF THE
                              BOARD OF DIRECTORS OF
                        PARADIGM MEDICAL INDUSTRIES, INC.

The undersigned  hereby appoints Randall A. Mackey and Raymond P.L.  Cannefax or
either of them, each with full power of substitution,  as proxies to vote at the
Annual Meeting of Shareholders to be held on Friday, October 12, 2007, beginning
at 10:00 a.m., Mountain Daylight Time, at the corporate headquarters of Paradigm
Medical  Industries,  Inc. at 2355 South 1070 West, Salt Lake City, Utah, and at
all adjournments thereof, all shares of common stock which the undersigned would
be entitled to vote on matters set forth below, if personally present:

1.   ELECTION OF DIRECTORS,  NOMINEES:  KEITH D. IGNOTZ, RANDALL A. MACKEY, JOHN
     C. PINGREE AND DR. DAVID M. SILVER.

     |_|  FOR all  nominees  listed  (except  as  indicated  in  writing  to the
          contrary below)

     |_|  WITHHOLD AUTHORITY to vote for all nominees listed below

Instruction:  To withhold  authority to vote for any individual  nominee,  write
that nominee's name here:

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2.   APPROVAL OF AMENDMENT TO THE CERTIFICATE OF  INCORPORATION  TO INCREASE THE
     NUMBER  OF  AUTHORIZED   SHARES  OF  COMMON  STOCK  FROM   800,000,000   TO
     1,400,000,000 SHARES.

     |_|   FOR                      |_|   AGAINST             |_|   ABSTAIN

3.   APPROVAL  OF  AMENDMENT  TO THE 1995  STOCK  OPTION  PLAN TO  AUTHORIZE  AN
     ADDITIONAL 8,000,000 SHARES OF COMMON STOCK

     |_|   FOR                      |_|   AGAINST             |_|   ABSTAIN

4.   RATIFICATION OF APPOINTMENT OF CHISHOLM, BIERWOLF & NILSON AS THE COMPANY'S
     INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2007.

     |_|   FOR                      |_|   AGAINST             |_|   ABSTAIN

5.   IN THEIR DISCRETION, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
     MEETING.

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THIS PROXY WHEN  PROPERLY  EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION  IS  INDICATED,  WILL BE VOTED FOR THE  NOMINEES IN PROPOSAL 1 AND FOR
PROPOSALS 2, 3 AND 4. In their  discretion,  the proxies are  authorized to vote
upon  such  other  matters  as may  properly  come  before  the  meeting  or any
adjournment(s) thereof.

DATED ______________________________, 2007.

SIGNATURE: ________________________________________________________________

(This proxy should be marked,  dated and signed by each  shareholder  exactly as
such shareholder's name appears hereon and returned promptly. Persons signing in
a fiduciary capacity should so indicate.  If shares are held by joint tenants or
as community property,  both should sign. If a corporation,  please sign in full
corporate  name by the president or by an  authorized  corporate  officer.  If a
partnership, please sign in partnership name by an authorized person).

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