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Escalon(R) Reports Third Quarter Fiscal 2008 Results
Date:5/15/2008

e unfavorable exchange rate continues, the Company anticipates that Drew will continue to experience reduced margins on these products."

Non-GAAP Measures

To supplement the Company's consolidated financial statements presented in accordance with GAAP, the Company is providing certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP net loss and non-GAAP loss per fully diluted share.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. In addition, the Company believes non-GAAP measures that exclude stock-based compensation expense enhance the comparability of results against prior periods.

The Company's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance and provide further information for comparative purposes due to depreciation and amortization and the adoption of accounting standard FAS 123R.

The non-GAAP measures and the reconciliation to the most directly comparable GAAP measure of all non-GAAP measures are as follows:

Three Months Ended Nine Months Ended

March 31, March 31,

2008 2007 2008 2007

Net (Loss) Income $(1,942,622) $8,271,462 $(3,410,759) $7,087,242

Non-GAAP adjustments:

Stock based compensation $- $- $203,367 $123,772

Depreciation and

amortization $137,773 $155,392 $434,101 $437,474

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SOURCE Escalon Medical Corp.
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