Prospect Medical Holdings Confirms Receipt of AMEX Letter Conditionally Accepting Prospect's Compliance Plan and Extending the Compliance Plan Period

Prospect Medical Holdings, Inc. (AMEX: PZZ) ("Prospect” or "the Company”), which manages the medical care of approximately 240,000 HMO enrollees and operates four community hospitals in southern California, today announced that on May 8, 2008 it received a notice from the AMEX indicating that the AMEX has conditionally accepted the Company’s plan for regaining compliance with the exchange’s continued listing requirements and has extended the compliance period to July 28, 2008. Prospect currently is not in compliance with Sections 134 and 1101 of the AMEX Company Guide, specifically, by not having timely filed with the Securities and Exchange Commission its Form 10-K for the fiscal year ended September 30, 2007 and its Form 10-Q for the quarter ended December 31, 2007. The Company also will not be ready to file its Form 10-Q for the quarter ended March 31, 2008 by the May 15, 2008 due date. As announced on May 7, 2008, Prospect has substantially completed the work necessary to file its Form 10-K for the fiscal year ended September 30, 2007 and Form 10-Q for the quarter ended December 31, 2007. The Company anticipates filing both of these documents with the SEC once matters pertaining to the Company’s lenders and independent auditors (as previously disclosed) have been concluded. As previously announced, Prospect has submitted to the AMEX the Company’s plan for regaining compliance with the AMEX’s continued listing requirements. The AMEX’s May 8 letter notified Prospect that, based on a review of the information provided by the Company, the AMEX has determined that, in accordance with Section 1009 of the AMEX Company Guide, Prospect has made a reasonable demonstration of its ability to regain compliance with the continued listing standards by the end of the plan period, which AMEX has determined to be no later than July 28, 2008. The AMEX further stated that, at this time, it is prepared to continue the listing of Prospect subject to Prospect meeting certain terms and conditions. At the end of the plan period, Prospect must be in compliance with the applicable SEC filing requirements and corresponding AMEX listing requirements. Failure to regain such compliance within this time may result in the AMEX initiating delisting proceedings against Prospect. Prospect management continues to believe that it will be able to comply with the AMEX’s requirements and deadlines. ABOUT THE COMPANY Prospect Medical Holdings operates four community-based hospitals in the greater Los Angeles area and manages the medical care of individuals enrolled in HMO plans in Southern California, through a network of over 9,000 specialist and primary care physicians. This press release contains forward-looking statements. Additional written or oral forward-looking statements may be made by Prospect from time to time, in filings with the Securities and Exchange Commission, or otherwise. Statements contained herein that are not historical facts are forward-looking statements. Investors are cautioned that forward-looking statements, including the statements regarding anticipated or expected results, involve risks and uncertainties which may affect the Company's business and prospects, including those outlined in Prospect's Form 10-K filed on December 28, 2006, its Form 10-Q filed on August 20, 2007, as well as risks and uncertainties arising from Prospect's acquisition of Alta and ProMed, the debt incurred by Prospect in connection with those acquisitions, the resolution of current negotiations regarding covenant waivers and credit agreement amendments, and the ability of the Company to regain compliance with the AMEX’s continued listing requirements. Any forward-looking statements contained in this press release represent our estimates only as of the date hereof, or as of such earlier dates as are indicated, and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.