Escalon(R) Reports First Quarter Fiscal 20...(ock-based compensation expense enhance t...),Health

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 the new 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 September 30,

2007 2006

Net loss $(828,791) $(714,117)

Non-GAAP adjustments:

Stock-based compensation $12,934 $ -

Depreciation and amortization $145,083 $135,279

Total adjustments $158,017 $135,279

Non-GAAP adjusted loss $(670,774) $(578,838)

Shares used in computing

basic and fully diluted

earnings per share 6,388,086 6,344,657

Non-GAAP adjusted loss per fully

diluted share $(0.11) $(0.09)

Founded in 1987, Escalon develops markets and distributes ophthalmic diagnostic and surgical products as well as vascular access devices. Drew, which operates as a separate business unit, provides instrumentation and consumables for the diagnosis and monitoring of medical disorders in the areas of diabetes, cardiovascular diseases and hematology, as well as veterinary hematology and blood chemistry. The Company seeks to utilize strategic partnerships to help finance its development programs and is also seeking acquisitions to further
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