VirtualScopics Reports Record Third Quarter 2008 Revenue and Gr...(nal paid-in capital ...),Health

Accumulated deficit (10,909,531) (8,585,323)

Total stockholders' equity 5,523,658 7,054,035

Total liabilities and stockholders'

equity $6,795,839 $8,181,016

VirtualScopics, Inc.

Condensed Consolidated Statements of Operations (unaudited)

For the Three Months For the Nine Months

Ended September 30, Ended September 30,

2008 2007 2008 2007

Revenues $1,815,616 $1,370,021 $5,183,017 $4,184,713

Cost of services 1,005,700 963,076 3,057,220 2,731,434

Gross profit 809,916 406,945 2,125,797 1,453,279

Gross margin 45% 30% 41% 35%

Operating expenses

Research and

development 232,986 336,687 697,640 1,124,606

Sales and marketing 263,917 150,504 937,028 555,783

General and

administrative 514,147 482,545 1,589,023 1,688,178

Stock based

compensation expense 236,600 295,974 923,891 1,041,456

Depreciation and

amortization 116,234 126,673 350,565 362,878

Total operating

expenses 1,363,884 1,392,383 4,498,147 4,772,901

Operating loss (553,968) (985,438) (2,372,350) (3,319,622)

Total other income 5,383 16,409 48,142 105,714

Net Loss $(548,585) $(969,029) $(2,324,208) $(3,213,908)

Series B preferred stock

cash dividend 84,547 - 254,307 -

Net loss attributa
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