Acton, Massachusetts, January 31, 2017 — Psychemedics Corporation (NASDAQ:PMD) today announced that recent volatility in its stock price on January 31, 2017 appears to have been caused by a news report of a court ruling in Brazil involving Psychemedics Brasil.

Psychemedics Brasil is an independent distributor of Psychemedics Corporation’s hair testing services in Brazil, and Psychemedics Corporation has no ownership interest in Psychemedics Brasil.  Psychemedics Corporation is not involved in the lawsuit, and was not made aware of the court ruling until it was publicly released today.

Psychemedics Brasil has been a distributor of Psychemedics Corporation’s hair testing services for more than fifteen years, and will be appealing the court’s ruling.  We expect that our business in Brazil will continue as usual.

Psychemedics Corporation is the world’s largest provider of hair testing for the detection of drugs of abuse. The Company’s patented process is used by thousands of U.S. and international clients, including over 10% of the Fortune 500 companies, for pre-employment and random drug testing. Major police departments, Federal Reserve Banks, schools, and other public entities also rely on our unique patented drug testing process. We strongly believe our drug testing method to be superior to any other product currently in use, including traditional urine testing and other hair testing methods.

The Psychemedics web site is www.psychemedics.com

Cautionary Statement for purposes of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995:  From time to time, information provided by Psychemedics may contain forward-looking information that involves risks and uncertainties.  In particular, statements contained in this release that are not historical facts (including but not limited to statements concerning earnings, earnings per share, revenues, cash flows, dividends, future business, growth opportunities, profitability, pricing, new accounts, customer base, market share, test volume, sales and marketing strategies, U.S. and foreign drug testing laws and regulations and the enforcement of such laws and regulations, required investments in plant, equipment and people and new test development) may be “forward looking” statements.  Actual results may differ from those stated in any forward-looking statements.  Factors that may cause such differences include but are not limited to risks associated with the development of markets for new products and services offered, costs of capacity expansion, U.S. and foreign government regulation, including but not limited to FDA regulations, Brazilian laws and regulations, proposed laws and regulations, R&D spending, competition (including, without limitation, competition from other companies pursuing the same growth opportunities) and general economic conditions and other factors disclosed in the Company’s filings with the Securities and Exchange Commission.  The forward-looking statements contained herein speak only of the Company’s expecta­tions as of the date of this press release. The Company express­ly disclaims any obligation or undertaking to release publicly any updates or revi­sions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions, or circumstances on which any such statement is based.

Contact:

Neil Lerner

Vice President of Finance

(978) 206-8220

Neill@psychemedics.com