Pinnacle Data Systems Announces The Industry's First AMD Opteron™ Processor-Based AdvancedTCA ® Blade Reference Design Kit

San Jose, California -- 12/6/2005 -- Pinnacle Data Systems, Inc. (PDSi) (AMEX: PNS), today announced development of the first AMD Opteron™ processor-based AdvancedTCA^® (ATCA) blade reference design kit specifically designed to meet the stringent demands of the ATCA specification for telecommunication equipment providers (TEPs) and carriers.

The intent of the ATCA reference design is to provide a simple to use model that OEMs can quickly and easily manufacture as is, modify themselves according to customer needs, or contract with PDSi to modify and complete a unique design with feature requirements provided by the OEM or end customer. The development kit can reduce time-to-market and development costs as the intricacies of the system design according to the ATCA specification have been researched and resolved, resulting in a kit that is completely deployable without modifications. The prototype blade reference is scheduled to be completed by the end of Q1 2006 and generally available to the public by the end of Q2 2006.

AdvancedTCA is the largest specification effort in the PCI Industrial Computer Manufacturer’s (PICMG^®) history, and addresses requirements for the next generation of carrier grade communications equipment. ATCA incorporates the latest trends in high speed interconnect technologies, next generation processors and improved reliability, manageability and serviceability.

Chris Winslow, President and COO of PDSi commented, “This unique blade design offers the telecommunications industry the flexibility and durability of AdvancedTCA technology and allows telco customers to quickly implement the benefits of true dual core and 64-bit computing with the AMD Opteron processor.”

“PDSi has a long history of success in the telecommunications market,” said David Rich, director of 64-bit Embedded Business at AMD. “By augmenting their top-notch design and manufacturing capability with the ATCA specification and the leading-edge AMD Opteron processor, their customers can take advantage of the very latest and greatest in telecom infrastructure – high performance, low power consumption and ease of management.”

More information can be found on PDSi’s website
http://www.pinnacle.com/products2/advancedtca/ .

About PDSi
PDSi provides product lifecycle service solutions to Original Equipment Manufacturers (OEMs) in the medical, telecommunications, defense, imaging and computer equipment industries, among others. PDSi offers a full range of computer and computer-related product development and manufacturing services to increase product speed to market and engineered product life, and service and support solutions for units in the field through comprehensive product lifecycle management programs encompassing depot repair, advanced exchange, contact center support and end-of-life control. For more information, visit the PDSi Website at http://www.pinnacle.com.

Safe Harbor Statement: This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “should” and similar expressions identify forward-looking statements that speak only as of the date thereof. Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors. These factors include changes in general economic conditions, changes in the specific markets for our products and services, adverse business conditions, changes in customer order patterns, increased competition, changes in our business or our relationship with major technology partners, pricing pressures, lack of adequate financing to take advantage of business opportunities that may arise, lack of success in technological advancements, and risks associated with our new business practices, processes and information systems. The Company undertakes no obligations to publicly update or revise such statements. For more details, please refer to the Company’s Securities and Exchange Commission filings, including its most recent Annual Report on Form 10-KSB and quarterly reports on Form 10-QSB.