Paulson Capital Corp. Announces 2007 Year End Results

PORTLAND, OR, Mar 31 (MARKET WIRE) --
Paulson Capital Corp. (NASDAQ: PLCC), parent company to Paulson Investment
Company, Inc., today announced its 2007 year end results, ended December 31,
2007.

Financial Highlights for 12 Months Ended December 31, 2007 Compared 12
Months Ended December 31, 2006:

-- Total revenues climbed to $30 Million, up 123% from $13.5 million.
-- Commissions earned from securities brokerage activities increased 8.1%
to $17 million from $15.7 million.
-- Corporate finance revenues rose 19.8% to $6 million from $5 million.
-- Investment income totaled $3.1 million, a sizable jump over investment
losses of $6.4 million.
-- Trading income increased to $3.5 million from trading losses of $1.3
million.
-- Income before taxes was $7.7 million compared to a loss before taxes
of $7.3 million.
-- Net income totaled $4.8 million, or $0.78 earnings per basic and
diluted share, compared to a net loss of $4.9 million, or $0.79 loss per
basic and diluted share.

As of December 31, 2007, the Company had $13.3 million in cash and
receivables and approximately $38.7 million in total shareholders' equity. The
value of the Company's trading securities, investment securities and
underwriter warrants was $36.6 million. During 2007, the Company repurchased a
total of 163,861 shares of its common stock under the stock repurchase program
approved by the Board in September 2001.

Chester "Chet" Paulson, Chairman and CEO, stated, "We are very pleased
thatin 2007, we saw a return to strong profitability, driven by measured revenue
growth in each of our business segments. Of particular note are the material
gains we made from our trading activities during the year, coupled with strong
performance of our proprietary investment accounts."

Continuing, Paulson noted, "The key to our own investment strategy is
centered on taking advantage of pullbacks when they occur in the stocks of
those client companies we hold in our proprietary accounts. In this regard,
our overall financial results for 2007 were favorably impacted by the
positive market momentum that both Ascent Solar and Converted Organics each
experienced during the past year, and continue to enjoy today. Like other
corporate finance clients in which we maintain stakes, when these companies'
stock prices fell below their original offering prices, we viewed them as
strong buying opportunities that have since delivered very nice returns on our
increased investments."

2007 Operational Highlights

-- During the year, Paulson Investment Company, Inc. completed three
public offerings, raising $29.7 million in gross proceeds for its
corporate finance clients. In addition, the Company also
completed a follow-on public offering and two private placement
transactions, raising an additional $18.2 million. As of
December 31, 2007, Paulson has acted as the managing underwriter
or co-managing underwriter for 163 securities offerings -- of
these, 101 were Initial Public Offerings. In total,
Paulson has raised approximately $1.2 billion for its clients since it
first began offering corporate finance services in 1978.

-- As of the end of 2007, Paulson made a market in 48 securities of 34
issuers. Of these, 18 were companies for which Paulson has acted as
managing or co-managing underwriter of related public offerings.

-- The Company had 95 brokers as of December 31, 2007, up from 88 at the
end of 2006. Presently, Paulson has 74 full-time employees and 63
independent contractors engaged in brokerage activities; and currently
operates three corporate managed offices based in Portland and Salem,
Oregon and in New York City. In addition, the Company has 38 branch
offices in California, Colorado, Florida, Georgia, New Jersey,
New York, North Carolina, Oklahoma, Oregon, Utah and Washington.

-- In September 2007, Paulson expanded its Board of Directors with the
appointment of Dr. Denis Burger as an independent member, and with the
appointment of Charles L. F. Paulson in December.

-- Dr. Burger retired in March 2007 after serving as Chairman and CEO
of AVI BioPharma (NASDAQ: AVII) for more than 11 years. AVI is a
noted pioneer in the emerging field of gene-therapy, referred to as
'antisense,' and currently has drugs in late stage development for
applications in both cancer and cardiovascular disease. In
addition, Dr. Burger serves on the Board of Directors of Trinity
Biotech plc, based in Dublin, Ireland; and has been involved as a
Board member or as co-founder of seven other biotech companies.

-- Paulson originally joined the firm in 1972 and has served in
various positions since that time. Currently, he is Senior Vice
President of Proprietary Trading, and is tasked with overseeing
the trading of the firm's own investment accounts and advising
senior management on market dynamics and trends that may affect
or impact the value of its holdings. He previously served as the
Company's Head Trader for more than 20 years and has served as a
member of Paulson Investment Company, Inc.'s Board of Directors
since 1994. Paulson is the eldest son to the Company's founder
and Chairman, Chester "Chet" Paulson.

Paulson will host a teleconference on Monday, March 31, 2008,
beginning at 4:15 PM Eastern, and invites all interested parties to join
management in a discussion regarding the Company's 2007 financial results,
corporateprogression and other meaningful developments. The conference call can
be
accessed via telephone by dialing toll free 800-218-8862. For those
unableto participate at that time, a replay of the teleconference can be
accesseddomestically by dialing 800-405-2236 and enter the passcode 11110652#.
The
replay will be available for 30 days.

FINANCIAL CHARTS TO FOLLOW

Paulson Capital Corp. and Subsidiary Consolidated Balance Sheets

December 31,
-----------------------
2007 2006
----------- -----------

Assets
Cash and cash equivalents $ 43,619 $ 219,341
Receivable from clearing organization 11,702,341 7,748,968
Notes and other receivables 1,563,530 1,651,002
Income taxes receivable - 304,695
Trading securities, at market value 12,037,368 2,363,824
Investment securities, at market or estimated fair
value 8,157,546 19,542,643
Underwriter warrants, at estimated fair value 16,373,000 5,650,000
Prepaid and deferred expenses 939,371 711,827
Furniture and equipment, at cost, net of
accumulated depreciation and amortization of
$862,616 and $747,759 196,333 271,766
----------- -----------
Total Assets $51,013,108 $38,464,066
=========== ===========

Liabilities and Shareholders' Equity
Accounts payable and accrued liabilities $ 3,240,877 $ 570,823
Payable to clearing organization 2,463,413 -
Compensation, employee benefits and payroll taxes 2,065,972 954,981
Securities sold, not yet purchased, at market value 36,259 17,244
Income taxes payable - current 1,369,710 -
Income taxes payable - long-term 297,000 -
Deferred revenue 375,000 475,000
Underwriter warrants-employee and independent
contractor, at Estimated fair value 651,000 -
Deferred income taxes 1,821,000 1,670,000
----------- -----------
Total Liabilities 12,320,231 3,688,048

Commitments and Contingencies - -

Shareholders' Equity
Preferred stock, no par value; 500,000 shares
authorized; none issued - -
Common stock, no par value; 20,000,000 shares
authorized; shares issued and outstanding:
6,037,150 and 6,179,011 1,972,319 1,920,293
Retained earnings 36,720,558 32,855,725
----------- -----------
Total Shareholders' Equity 38,692,877 34,776,018

----------- -----------
Total Liabilities and Shareholders' Equity $51,013,108 $38,464,066
=========== ===========

Paulson Capital Corp. and Subsidiary Consolidated Statement of Operations
(Audited)

For the Year Ended
December 31,
--------------------------
2007 2006
------------ ------------
Revenues
Commissions $ 17,007,481 $ 15,724,699
Corporate finance 6,032,172 5,035,929
Investment income (loss) 3,108,278 (6,345,099)
Trading income (loss) 3,535,042 (1,337,726)
Interest and dividends 100,430 77,845
Other 257,265 307,936
------------ ------------
30,040,668 13,463,584

Expenses
Commissions and salaries 15,773,679 14,984,974
Underwriting expenses 451,601 457,974
Rent, telephone and quotation services 1,209,065 1,205,000
Professional fees 771,894 784,150
Bad debt expense 218,692 5,280
Travel and entertainment 244,285 284,661
Advertising and promotion expense 239,942 187,417
Settlement expense 604,712 396,282
Depreciation and amortization 114,857 103,129
Other 2,706,177 2,361,144
------------ ------------
22,334,904 20,770,011
------------ ------------

Income (loss) before income taxes 7,705,764 (7,306,427)

Income tax expense (benefit):
Current 2,773,000 1,294,000
Deferred 151,000 (3,738,000)
------------ ------------
2,924,000 (2,444,000)
------------ ------------

Net income (loss) $ 4,781,764 $ (4,862,427)
============ ============

Basic net income (loss) per share $ 0.78 $ (0.79)
============ ============

Diluted net income (loss) per share $ 0.78 $ (0.79)
============ ============

Shares used in per share calculations:
Basic 6,114,636 6,179,858
============ ============
Diluted 6,124,490 6,179,858
============ ============

About Paulson Capital Corporation

Paulson Capital Corporation is the parent company to Paulson Investment
Company,
Inc. Headquartered in Portland, Oregon, Paulson Investment Company is the
Northwest's largest independent brokerage firm and a national leader in
public offerings of small and emerging growth companies with capital needs of $5
million to $45 million. Founded by Chester "Chet" Paulson in 1970, it has
managed or underwritten 163 securities offerings and has generated more than
$1.2
billion for client companies. The firm's enduring success stems from its
ability to recognize emerging industry trends and for supporting emerging
companies pioneering positive change and advancements in those related
markets.

Through three corporate managed offices and 41 branch offices based
throughout
the U.S., Paulson Investment Company aims to earn and build trust with retail
and select institutional investors through highly customized financial portfolio
management, diversified financial products and service offerings and effective
administration and execution of investment strategies that specifically
address individual risk tolerance levels. In addition, Paulson's brokerage
clients
look to the firm for compelling new investment ideas in the small and
emerging growth markets.

This release may contain "forward-looking statements" based on current
expectations but involving known and unknown risks and uncertainties. Actual
results of
achievements may be materially different from those expressed or implied. The
Company's plan and objectives are based on judgments with respect to future
conditions in the securities markets as well as general assumptions
regarding the economy and competitive environment in the securities industry,
which
can be volatile and out of our control. In particular, we make assumptions
about our ability to complete corporate finance transactions and increase
the volume and size of our securities trading operations, which are
difficult or impossible to predict accurately and often beyond the control
of the Company. Therefore, there can be no assurance that any forward-looking
statement will prove to be accurate.

FOR MORE INFORMATION, PLEASE CONTACT:
Dodi Handy
President and CEO
or
Daniel Conway
Chief Strategy Officer
Elite Financial Communications Group
407-585-1080
plcc@efcg.net

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