TRAVERSE CITY, Mich., March 8 /PRNewswire-FirstCall/ -- Versus Technology, Inc. ("Versus" or the "Company") announced revenues of $1,133,000 for the fiscal quarter ended January 31, 2007, compared to $1,198,000 for the same period in 2006. Versus' quarterly revenues can vary significantly depending upon the timing of delivery of major customer projects. Accordingly, the revenues reported in any one quarter are not necessarily indicative of what full year results will be.

Gross profits as a percentage of revenues increased to 61% for the quarter from 59% for the same period in 2006. While sales and marketing expenses increased by 29% over the previous year, total operating expenses decreased by 1%.

Versus reported a net loss of $212,000 for the quarter, compared to a net loss of $375,000 for the same period in 2006. The decrease in net loss resulted primarily from no interest expense being incurred in the quarter ending January 31, 2007, compared to interest expense, including accretion of debt discount, of $229,000 in the quarter ending January 31, 2006, which more than offset lower income from operations.

Versus generated positive cash flow from operations and ended the quarter with a cash balance of $1,696,000, an increase of $295,000 from the start of the fiscal year.

For additional information please refer to the attached unaudited consolidated financial statements.

Versus Technology, Inc. (Pink Sheets: VSTI.PK) (http://www.versustech.com/) (Versus) is the leader in the development and sale of context-aware systems used for the management of patient flow and medical assets and to improve caregiver/patient communications in medical and long-term care facilities. Versus also supplies Active RFID/IR tags and readers that make locating systems more precise, security systems more intelligent, data collection routines automatic, and asset management systems more efficient. Versus' systems, which are currently installed in hospitals, corporate facilities, government facilities, and other complexes, permit the automatic and accurate registry of essential management and business information. By monitoring the precise location of personnel or equipment and automatically recording events associated with their locations, the systems offer real-time asset and staff locating, automatic data collection, access/egress control, and a passive source of location data that facilitates scheduling and communication interfaces. Versus' proprietary locating systems are sold primarily through an expanding network of resellers and dealers.

Safe Harbor Provision

This document may contain forward-looking statements relating to future events, such as the development of new products, the commencement of production, or the future financial performance of the Company. These statements fall within the meaning of forward-looking information as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, economic, competitive, governmental, and technological factors affecting the Company's markets and market growth rates, products and their rate of commercialization, services, prices and adequacy of financing, and other factors. The Company undertakes no obligation to update, amend, or clarify forward-looking statements, whether because of new information, future events, or otherwise.

Report of Management

The accompanying consolidated balance sheets of Versus Technology, Inc. and Subsidiary as of January 31, 2007, and October 31, 2006, and the related consolidated statements of operations and cash flows for the three-month periods ended January 31, 2007 and 2006, have been prepared by management.

Management has elected to omit the statement of shareholders' equity and substantially all of the footnote disclosures required by accounting principles generally accepted in the United States. If the omitted statement and disclosures were included in the financial statements, they might influence the user's conclusions about the Company's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

The reader should refer to the Versus Technology, Inc. 2006 Annual Report which is available at http://www.versustech.com/pages/annual_reports.aspx for further details regarding the Company's financial position at October 31, 2006.

Richard W. Ebersole Chief Financial Officer March 8, 2007 VERSUS TECHNOLOGY, INC. AND SUBSIDIARY Consolidated Balance Sheets (Unaudited) January 31, 2007 October 31, 2006 Assets Current Assets Cash and cash equivalents $ 1,696,000 $ 1,401,000 Accounts receivable 1,043,000 1,714,000 Inventories - purchased parts and assemblies 642,000 576,000 Prepaid expenses and other assets 97,000 62,000 Total Current Assets 3,478,000 3,753,000 Property and Equipment Machinery and equipment 347,000 336,000 Furniture and fixtures 83,000 81,000 Leasehold improvements 160,000 158,000 590,000 575,000 Less accumulated depreciation 516,000 509,000 Net Property and Equipment 74,000 66,000 Goodwill 1,533,000 1,533,000 Patents and Other Intangible Assets, net of accumulated amortization of $1,990,000 and $1,950,000 - 41,000 Other Non-Current Assets 77,000 78,000 $ 5,162,000 $ 5,471,000 See accompanying report of management. VERSUS TECHNOLOGY, INC. AND SUBSIDIARY Consolidated Balance Sheets (Unaudited) January 31, 2007 October 31, 2006 Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 389,000 $ 478,000 Accrued expenses 232,000 262,000 Deferred revenue from customer advance payments 105,000 111,000 Total Current Liabilities 726,000 851,000 Commitments and Contingencies Shareholders' Equity Common stock $0.01 par value; 120,000,000 shares authorized; 86,573,325 shares issued and outstanding 866,000 866,000 Additional paid-in capital 41,860,000 41,832,000 Accumulated deficit (38,290,000) (38,078,000) Total Shareholders' Equity 4,436,000 4,620,000 $ 5,162,000 $ 5,471,000 See accompanying report of management. VERSUS TECHNOLOGY, INC. AND SUBSIDIARY Consolidated Statements of Operations (Unaudited) Three Months Ended January 31, 2007 2006 Revenues $ 1,133,000 $ 1,198,000 Operating Expenses Cost of revenues 440,000 489,000 Research and development 155,000 179,000 Sales and marketing 520,000 403,000 General and administrative 237,000 289,000 Total Operating Expenses 1,352,000 1,360,000 Loss From Operations (219,000) (162,000) Other Income (Expense) Interest income 12,000 13,000 Interest expense, accretion of debt discount - (124,000) Interest expense - (105,000) Net foreign currency transaction gains (5,000) 3,000 Total Other Income (Expense) 7,000 (213,000) Net Loss $ (212,000) $ (375,000) Basic and Diluted Net Loss Per Share $ - $ (0.01) See accompanying report of management. VERSUS TECHNOLOGY, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited) Three Months Ended January 31, 2007 2006 Operating Activities Net loss $ (212,000) $ (375,000) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 8,000 6,000 Amortization of intangibles 41,000 41,000 Non-cash equity based compensation 28,000 - Interest expense related to beneficial conversion 124,000 Changes in operating assets and liabilities: Accounts receivable, net 671,000 648,000 Inventories (66,000) (120,000) Prepaid expenses and other current assets (35,000) 5,000 Accounts payable (89,000) (123,000) Accrued expenses (30,000) 8,000 Deferred revenues from customer advance payments (6,000) (50,000) Net cash provided by operating activities 310,000 164,000 Investing Activity Additions to property and equipment (15,000) (7,000) Financing Activities Issuance of common stock - 48,000 Net Increase in Cash and Cash Equivalents 295,000 205,000 Cash and Cash Equivalents, at the beginning of the period 1,401,000 1,682,000 Cash and Cash Equivalents, at the end of the period $ 1,696,000 $ 1,887,000 Supplemental Cash Flow Information Cash paid during the period for interest $ - $ 96,000 See accompanying report of management.

CONTACT: Investors-Analysts, Richard W. Ebersole, Chief Financial
Officer, or Media, Stephanie Bertschy, Director of Marketing of Versus
Technology, Inc., +1-231-946-5868

Web site: http://www.versustech.com/
http://www.versustech.com/pages/annual_reports.aspx