Versus Technology Announces Fourth Quart...(00 Total Other Income (Expense) N...),Health

Total Other Income

(Expense), Net 16,000 8,000 64,000 (1,802,000)

Net Income (Loss) $335,000 $540,000 $(208,000) $(1,692,000)

Basic and Diluted

Net Income (Loss)

Per Share $ - $ .01 $( -) $( .03)

See accompanying report of management.

The full annual report will be published at http://www.versustech.com when available.

VERSUS TECHNOLOGY, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the year ended October 31,

2007 2006

Operating Activities

Net loss $ (208,000) $ (1,692,000)

Adjustments to reconcile net loss to

net cash provided by (used in)

operating activities:

Depreciation 33,000 25,000

Amortization of intangibles 41,000 172,000

Non-cash stock based compensation 110,000 -

Interest expense - accretion of

debt discount - 1,639,000

Changes in operating assets and

liabilities:

Accounts receivable, net 649,000 (177,000)

Inventories (248,000) (294,000)

Prepaid expenses and other current

assets (65,000) (3,000)

Accounts payable 45,000 (177,000)

Accrued expenses 1,000 (66,000)

Deferred revenues - customer

advance payments 131,000 (12,000) <
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