VirtualScopics Reports Second Quarter 20...(765 118493 234332 236205 ...),Health

Total operating

expenses 1,578,490 1,633,514 3,134,264 3,380,518

Operating loss (866,727) (1,065,066) (1,818,382) (2,334,184)

Other income (expense)

Interest income 17,002 43,167 45,727 92,537

Other expense (1,385) (1,253) (2,968) (3,231)

Total other income 15,617 41,914 42,759 89,306

Net Loss $(851,110) $(1,023,152) $(1,775,623) $(2,244,878)

Series B preferred

stock cash dividend 84,520 - 169,760 -

Net loss attributable

to common stockholders $(935,630) $(1,023,152) $(1,945,383) $(2,244,878)

Net loss per share

Basic and diluted $(0.04) $(0.04) $(0.08) $(0.10)

Weighted average shares

used in computing net

loss per share

Basic and diluted 23,358,625 23,001,334 23,302,346 22,986,880

VirtualScopics, Inc.

Condensed Consolidated Balance Sheets

June 30, 2008 December 31, 2007

Assets (unaudited)

Current assets

Cash and cash equivalents $3,238,820 $3,955,835

Restricted cash 200,076 455,583

Accounts receivable 918,363 648,300

Prepaid expenses and other assets 282,027 306,301

Total current assets 4,639,286 5,366,019

Patents, net 1,941,489 1,948,785

Property and equipment, net 455,660 542,679

Other assets 218,552 323,533

Total assets $7,254,987 $8,18
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