VCampus Announces Third Quarter Financial Results

  
    
  
  
    
      VCampus Corporation (OTCBB:VCMP.OB), a provider of professional 
      certifications and e-Learning Portal Services, today announced its 
      financial results for the third quarter ended September 30, 2006.
    
    
      Highlights:
    
    
      
        The third quarter of 2006 represents the first full quarter of 
        combined operations since the acquisition of Prosoft Learning 
        Corporation in June 2006. The acquisition has enabled the combined 
        company to double VCampus revenues and increase its certification 
        related revenue component from 16% to 74% of total revenues over the 
        same quarter a year ago. These achievements signify the completion of 
        the company’s strategic transition from a 
        pure e-Learning hosting service provider to a provider of professional 
        certification courses and exams using blended components of print and 
        e-Learning.
      
      
        The company has reclassified its revenue components into three broad 
        areas to better reflect the changes in its business model: 1) “certification-related 
        revenues” combine all of Prosoft’s 
        product revenues and VCampus’ Select Partner 
        tuition revenues; 2) “learning portal 
        revenues” consist of online hosting and 
        tuition revenues for third parties; and 3) “development 
        and other revenues” are derived from our 
        delivery of professional services.
      
      
        Gross margins improved from 60% of total revenues in the third quarter 
        of 2005 to 64% in the third quarter of 2006. Gross margin for the 
        second quarter of 2006 was at 65%.
      
      
        Product development and operations costs as a percent of total 
        revenues declined from 49% in the third quarter of 2005 to 32% in the 
        third quarter of 2006. Management expects these costs as a percentage 
        of total revenues to decline further in the future. Product 
        development and operations costs represented 48% of revenues for the 
        second quarter of 2006.
      
      
        Non-cash operating costs which include depreciation and amortization, 
        impairment of goodwill, and stock-based compensation grew from 
        $352,560 in the third quarter of 2005 to $1,061,156 in the third 
        quarter of 2006. Non-cash operating costs were $567,433 for the second 
        quarter of 2006.
      
      
        The Company raised $2.7 million in net proceeds in September of 2006 
        from a $3 million convertible debt offering with a fixed conversion 
        price. These funds will help finance the integration of the 
        recently-acquired Prosoft operations with VCampus, fund expansion of 
        sales and marketing of certification products and enhancement of the 
        testing software to help host proctored exams for Prosoft 
        certifications and retire other company debt obligations.
      
      
        Using number of exams taken as a barometer of market acceptance, CIW’s 
        Academic market exams have grown 132% from 1,032 in the 2004-2005 
        academic year to 2,396 exams in the 2005-2006 academic year. Much of 
        this growth is driven by the five states with which Prosoft has 
        articulation agreements: Virginia, Tennessee, Arkansas, Michigan, and 
        Louisiana. Other states like Wisconsin and Washington are coming on 
        stream now. We will be focusing on refining our strategy to grow in 
        this market through community colleges.
      
      
        The total number of CIW exams delivered grew 23% from 2,054 exams in 
        Q3-05 to 2,533 exams in Q3-06. The growth was driven partly by 
        increased demand from Japan and Egypt. We now have over 44,000 CIW 
        certified individuals worldwide who collectively have earned over 
        85,000 certifications.
      
      
        CTP certification is gaining ground as we have grown 50% in Q3-06 
        compared to Q3-05 averaging 100 exams a month since June. The pass 
        rate for these exams is 66%. We now have over 3,000 CTP certified 
        professionals worldwide.
      
      
        Online tuition through our Select Partner agreements grew 25% from 
        Q2-06 to $200,000
      
    
    
      Commenting on the business transition, Nat Kannan, CEO of VCampus, said, “Three 
      years ago we made a commitment to turn around the company from its total 
      reliance for 100% of its revenues on a pure commoditized, e-Learning 
      model to one where the company had an exclusive position in a growing 
      market for valuable professional certifications worldwide. We have 
      finally made this transition with significant help from our Select 
      Partners and the acquisition of Prosoft Learning. This has been a 
      challenging transition and now our goal is to drive revenues and 
      rationalize our cost structure to get to breakeven shortly and 
      profitability by mid-2007. We currently derive 74% of our revenues from 
      certification-related business through both outright ownership of 
      certifications and through exclusive relationships with world class 
      certifying bodies in the areas of Finance, Information Security and 
      Healthcare. The two certifications we own through the acquisition of 
      Prosoft, CIW and CTP, have established leadership positions in rapidly 
      emerging Web technologies and the convergence of voice, video, and data 
      over the Internet.”
    
    
      The company reported total revenues of $2,524,733 in the third quarter 
      of 2006 compared to total revenues of $1,407,668 in the second quarter 
      of 2006 and $1,244,612 in the third quarter of 2005. The operating loss 
      for the three months ended September 30, 2006 was $1,986,261 compared to 
      $1,332,259 and $905,633 for the three months ended June 30, 2006 and 
      September 30, 2005, respectively. With the adoption of the new 
      equity-based compensation standards under SFAS 123R effective January 1, 
      2006, the non-cash charge for stock-based compensation increased to 
      $215,883 in the third quarter of 2006 from $17,500 in the third quarter 
      of 2005. Stock-based compensation for the second quarter of 2006 was 
      $292,472. During the third quarter of 2006, the company recorded a 
      non-cash deemed dividend of $1,491,666 representing the beneficial 
      conversion feature associated with its Series A-1 Preferred Stock as a 
      result of the automatic adjustment in the conversion price for such 
      shares and the exercise price of the related warrants to $0.30 per 
      share, following the Company’s September 2006 
      private placement. Also during the third quarter, the company recorded a 
      non-cash charge of approximately $165,000, which represents amortization 
      of debt discount and deferred debt offering costs related to the 
      issuance of approximately $3.6 million (September 30, 2006 principal 
      amount of approximately $1.1 million) of convertible promissory notes in 
      March 2004. Corresponding charges in the second quarter of 2006 and 
      third quarter of 2005 were approximately $109,000 and $285,000, 
      respectively. During the third quarter of 2006, the Company recorded a 
      non-cash goodwill impairment charge of $328,317. Including these 
      non-cash charges, VCampus reported a net loss to common stockholders in 
      the third quarter of 2006 of $3,816,235, or $0.38 per share, compared to 
      a net loss to common stockholders of $1,212,427, or $0.13 per share, for 
      the third quarter of 2005 and $2,624,342, or $0.27 per share, in the 
      second quarter of 2006.
    
    
      For the nine months ended September 30, 2006, the company reported 
      revenue of $5,209,603, compared to $3,466,283 for the same period in 
      2005. The operating losses for the nine months ended September 30, 2006 
      and 2005 were $5,030,608 and $3,558,089, respectively. Including a 
      non-cash deemed dividend of $2,523,369 and a goodwill impairment charge 
      of $328,317 in the 2006 period, stock-based compensation of $664,992 and 
      $91,994 for the 2006 and 2005 periods, respectively, and approximately 
      $391,000 and $936,000 of non-cash debt discount and deferred debt 
      offering costs amortization for the 2006 and 2005 periods, respectively, 
      VCampus reported a net loss to common stockholders of $8,347,970 ($0.86 
      per share) for the nine months of 2006, compared to $4,571,204 ($0.50 
      per share) for the same period in 2005.
    
    
      The company ended the quarter with approximately $2.4 million in cash 
      compared to approximately $2.1 million in cash on June 30, 2006.
    
    
      Conference Call and Webcast
    
    
      Mr. Kannan and Mr. Nelson will hold a conference call to discuss the 
      third quarter financial results. The call is scheduled for 4:30 PM 
      Eastern Time on November 14, 2006. Interested parties may participate by 
      dialing [phone]. International callers may dial [phone]. 
      Please enter the passcode 76763944.
    
    
      This call is also being webcast by Thomson/CCBN and can be accessed at 
      the VCampus web site at www.vcampus.com. 
      The webcast is also being distributed through the Thomson StreetEvents 
      Network to both institutional and individual investors. Individual 
      investors can listen to the call at www.fulldisclosure.com, 
      Thomson/CCBN’s individual investor portal, 
      powered by StreetEvents. Institutional investors can access the call via 
      Thomson’s password-protected event management 
      site, StreetEvents (www.streetevents.com).
    
    
      A replay of the call will be available via telephone from approximately 
      6:30 PM Eastern Time on November 14, 2006 until 6:30 PM Eastern Time on 
      November 21, 2006. To listen to the replay, participants in the U.S. and 
      Canada should dial [phone], and international participants should 
      dial [phone]. The conference ID for the replay is 68701683.
    
    
      About VCampus®
    
    
      VCampus Corporation (OTCBB:VCMP.OB), a provider of comprehensive, 
      outsourced e-Learning services, helps organizations that offer 
      professional certifications and credentials unlock the value of their 
      traditional branded course content. Through its innovative Select Partner® 
      Program, VCampus repurposes value-added training content for online 
      delivery to enhance and support professional development programs. The 
      Select Partner Program provides custom course development, publishing, 
      hosting, e-commerce, reporting, account support and marketing services. 
      With over a decade of e-Learning experience, VCampus has delivered more 
      than 3.1 million courses to more than 1 million desktops/users in 
      professional credentialing and certification organizations, 
      associations, non-profits, corporations, and government agencies. 
      VCampus distributes a courseware library of more than 3,400 web-based 
      courses. VCampus Corporation is headquartered in Reston, VA. For more 
      information, call 800-915-9298, or visit the VCampus Web site at www.vcampus.com. 
      “VCampus” and “Select 
      Partner” are registered trademarks of VCampus 
      Corporation.
    
    
      About Prosoft Learning, a VCampus Company
    
    
      Prosoft offers content and certifications to enable individuals to 
      develop and validate critical Information and Communications Technology 
      (ICT) workforce skills. Prosoft is active in the workforce development 
      arena, working with state and local governments and school districts to 
      provide ICT education solutions for high school and community college 
      students. Prosoft has created and distributes a comprehensive library of 
      classroom and e-learning courses. Prosoft distributes its content 
      through its ComputerPREP division to individuals, schools, colleges, 
      commercial training centers and corporations worldwide. Prosoft owns the 
      CIW job-role certification program for Internet technologies and the 
      CCNT (Certified in Convergent Network Technologies) certification, and 
      manages the CTP (Convergence Technologies Professional) vendor-neutral 
      certification for telecommunications. To learn more, visit www.ProsoftLearning.com, 
      www.ComputerPREP.com, www.CIWcertified.com 
      and www.CTPcertified.com. “CIW” 
      and “CTP” are 
      registered trademarks of Prosoft.
    
    
      Forward Looking Statements
    
    
      This press release contains forward-looking statements within the 
      meaning of the federal Private Securities Litigation Reform Act of 1995. 
      Statements contained herein that are not statements of historical fact 
      are forward-looking. Without limiting the foregoing, references to 
      future growth or expansion or scheduled product launch dates are 
      forward-looking, and words such as “anticipates,” 
      “believes,” “could,” 
      “estimate,” “designed 
      to,” “expect,” 
      “intend,” “may,” 
      “might,” “should,” 
      “will,” and “would” 
      and other forms of these words or similar words are intended to identify 
      forward-looking information. You should read statements that contain 
      these words carefully because they discuss our future expectations, 
      contain projections of our future results of operations or of our 
      financial position or state other forward-looking information. There 
      might be events in the future that we are not able to predict accurately 
      or control, and any forward-looking statements are subject to risks and 
      uncertainties that could cause our actual results to differ materially. 
      These risks and uncertainties include: (1) our history of losses, 
      projection of future losses and our need to raise additional capital; 
      (2) market acceptance of our new and future products; (3) uncertainties 
      regarding the successful implementation of our Select Partner Program or 
      the timely release of products; (4) uncertainties regarding our ability 
      to achieve growth organically or otherwise and to consummate and 
      integrate any acquisitions, including Prosoft; and (5) growing 
      competition. For additional information regarding risk factors that 
      could affect our future results, please refer to the discussions of “Risk 
      Factors” in our Annual Report on Form 10-K 
      for the year ended December 31, 2005 and other SEC filings.
    
    
      
        
          VCAMPUS CORPORATION
        
      
      
        
          CONSOLIDATED STATEMENTS OF OPERATIONS
        
      
      
        
          (Unaudited)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Three Months Ended
        
        
        
        
          Nine Months Ended
        
      
      
        
        
        
          September 30,
        
        
        
        
          September 30,
        
      
      
        
        
        
          2005 
        
        
        
        
          2006 
        
        
        
        
          2005 
        
        
        
        
          2006 
        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Certification related revenues
        
        
          $ 203,785 
        
        
        
        
          $ 1,858,473 
        
        
        
        
          $ 505,637 
        
        
        
        
          $ 2,497,402 
        
      
      
        
          Learning portal revenues
        
        
          830,230 
        
        
        
        
          547,588 
        
        
        
        
          2,580,534 
        
        
        
        
          2,145,384 
        
      
      
        
          Development and other revenues
        
        
          210,597 
        
        
        
        
          118,672 
        
        
        
        
          380,112 
        
        
        
        
          566,817 
        
      
      
        
          Net revenues
        
        
          1,244,612 
        
        
        
        
          2,524,733 
        
        
        
        
          3,466,283 
        
        
        
        
          5,209,603 
        
      
      
        
          Costs and expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cost of revenues
        
        
          495,675 
        
        
        
        
          921,007 
        
        
        
        
          1,345,237 
        
        
        
        
          1,823,350 
        
      
      
        
          Sales and marketing
        
        
          380,062 
        
        
        
        
          881,171 
        
        
        
        
          1,304,216 
        
        
        
        
          1,674,069 
        
      
      
        
          Product development and operations
        
        
          605,155 
        
        
        
        
          799,087 
        
        
        
        
          2,014,584 
        
        
        
        
          2,152,310 
        
      
      
        
          General and administrative
        
        
          316,793 
        
        
        
        
          848,573 
        
        
        
        
          1,151,244 
        
        
        
        
          
            1,926,072 
          
        
      
      
        
          Sales and use tax assessment
        
        
          — 
        
        
        
        
          — 
        
        
        
        
          — 
        
        
        
        
          400,000 
        
      
      
        
          Depreciation and amortization
        
        
          335,060 
        
        
        
        
          516,956 
        
        
        
        
          1,117,097 
        
        
        
        
          1,271,101 
        
      
      
        
          Impairment of goodwill
        
        
          — 
        
        
        
        
          328,317 
        
        
        
        
          — 
        
        
        
        
          328,317 
        
      
      
        
          Stock-based compensation
        
        
          17,500 
        
        
        
        
          215,883 
        
        
        
        
          91,994 
        
        
        
        
          664,992 
        
      
      
        
          Total costs and expenses
        
        
          2,150,245 
        
        
        
        
          4,510,994 
        
        
        
        
          7,024,372 
        
        
        
        
          10,240,211 
        
      
      
        
          Loss from operations
        
        
          (905,633)
        
        
        
        
          (1,986,261)
        
        
        
        
          (3,558,089)
        
        
        
        
          (5,030,608)
        
      
      
        
          Interest expense and amortization of debt discount and debt offering 
          costs, net
        
        
          
            (306,794)
          
        
        
        
        
          
            (189,433)
          
        
        
        
        
          
            (1,013,115)
          
        
        
        
        
          
            (429,487)
          
        
      
      
        
          Net loss
        
        
          $ (1,212,427)
        
        
        
        
          $ (2,175,694)
        
        
        
        
          $ (4,571,204)
        
        
        
        
          $ (5,460,095)
        
      
      
        
          Dividends to preferred stockholders
        
        
          — 
        
        
        
        
          (1,640,541)
        
        
        
        
          — 
        
        
        
        
          (2,887,875)
        
      
      
        
          Net loss attributable to common stockholders
        
        
          $ (1,212,427)
        
        
        
        
          $ (3,816,235)
        
        
        
        
          $ (4,571,204)
        
        
        
        
          $ (8,347,970)
        
      
      
        
          Net loss per share, basic
        
        
          $ (0.13)
        
        
        
        
          $ (0.38)
        
        
        
        
          $ (0.50)
        
        
        
        
          $ (0.86)
        
      
      
        
          Net loss per share — assuming dilution
        
        
          $ (0.13)
        
        
        
        
          $ (0.38)
        
        
        
        
          $ (0.50)
        
        
        
        
          $ (0.86)
        
      
    
    
    
    
      
        
          VCAMPUS CORPORATION
        
      
      
        
          CONSOLIDATED BALANCE SHEETS
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          
            December 31,
          
        
        
        
        
          September 30,
        
      
      
        
        
        
        
        
          2005 
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
        
        
          (Unaudited)
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $ 2,488,159 
        
        
        
        
          $2,362,893 
        
      
      
        
          Accounts receivable, net
        
        
        
        
          209,338 
        
        
        
        
          702,634 
        
      
      
        
          Loans receivable from related party
        
        
        
        
          15,453 
        
        
        
        
          
            — 
          
        
      
      
        
          Prepaid expenses and other current assets
        
        
        
        
          325,818 
        
        
        
        
          677,560 
        
      
      
        
          Total current assets
        
        
        
        
          3,038,768 
        
        
        
        
          3,743,087 
        
      
      
        
          Property and equipment, net
        
        
        
        
          313,880 
        
        
        
        
          329,806 
        
      
      
        
          Capitalized software costs and courseware development costs, net
        
        
        
        
          1,308,577 
        
        
        
        
          510,744 
        
      
      
        
          Other assets
        
        
        
        
          231,859 
        
        
        
        
          789,221 
        
      
      
        
          Other intangible assets, net
        
        
        
        
          257,006 
        
        
        
        
          1,546,467 
        
      
      
        
          Goodwill
        
        
        
        
          328,317 
        
        
        
        
          765,433 
        
      
      
        
          Total assets
        
        
        
        
          $ 5,478,407 
        
        
        
        
          $7,684,758 
        
      
      
        
          LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          $1,182,585 
        
        
        
        
          $1,666,789 
        
      
      
        
          Accrued expenses
        
        
        
        
          479,316 
        
        
        
        
          825,342 
        
      
      
        
          Accrued sales and use tax liability
        
        
        
        
          
            — 
          
        
        
        
        
          400,000 
        
      
      
        
          Capital lease obligation
        
        
        
        
          
            — 
          
        
        
        
        
          22,346 
        
      
      
        
          Notes payable
        
        
        
        
          191,796 
        
        
        
        
          457,067 
        
      
      
        
          Deferred revenues
        
        
        
        
          469,280 
        
        
        
        
          924,917 
        
      
      
        
          Accrued dividends payable to preferred stockholders
        
        
        
        
          14,312 
        
        
        
        
          56,875 
        
      
      
        
          Total current liabilities
        
        
        
        
          2,337,289 
        
        
        
        
          4,353,336 
        
      
      
        
          
            Long-term liabilities:
          
        
        
        
        
        
        
        
        
        
      
      
        
          Notes payable—less discount and current 
          portion
        
        
        
        
          479,489 
        
        
        
        
          1,866,619 
        
      
      
        
          Capital lease obligation - net of current portion
        
        
        
        
          
            — 
          
        
        
        
        
          42,478 
        
      
      
        
          Total liabilities
        
        
        
        
          2,816,778 
        
        
        
        
          6,262,433 
        
      
      
        
          Commitments and contingencies:
        
        
        
        
          
            — 
          
        
        
        
        
          — 
        
      
      
        
          Stockholders’ equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Series A-1 convertible Preferred Stock
        
        
        
        
          23 
        
        
        
        
          23 
        
      
      
        
          Series B-1 convertible Preferred Stock
        
        
        
        
          
            — 
          
        
        
        
        
          25 
        
      
      
        
          Common Stock, $0.01 par value per share
        
        
        
        
          95,921 
        
        
        
        
          101,379 
        
      
      
        
          Additional paid-in capital
        
        
        
        
          105,418,644 
        
        
        
        
          112,540,736 
        
      
      
        
          Accumulated deficit
        
        
        
        
          (102,852,959)
        
        
        
        
          (111,200,929)
        
      
      
        
          Accumulated other comprehensive loss
        
        
        
        
          
            — 
          
        
        
        
        
          (18,909)
        
      
      
        
          Total stockholders’ equity
        
        
        
        
          2,661,629 
        
        
        
        
          1,422,325 
        
      
      
        
          Total liabilities and stockholders’ equity
        
        
        
        
          $5,478,407 
        
        
        
        
          $ 7,684,758 
        
      
    
  
VCampus Corporation (OTCBB:VCMP.OB), a provider of professional
certifications and e-Learning Portal Services, today announced its
financial results for the third quarter ended September 30, 2006.

   Highlights:

   --  The third quarter of 2006 represents the first full quarter of
        combined operations since the acquisition of Prosoft Learning
        Corporation in June 2006. The acquisition has enabled the
        combined company to double VCampus revenues and increase its
        certification related revenue component from 16% to 74% of
        total revenues over the same quarter a year ago. These
        achievements signify the completion of the company's strategic
        transition from a pure e-Learning hosting service provider to
        a provider of professional certification courses and exams
        using blended components of print and e-Learning.

   --  The company has reclassified its revenue components into three
        broad areas to better reflect the changes in its business
        model: 1) "certification-related revenues" combine all of
        Prosoft's product revenues and VCampus' Select Partner tuition
        revenues; 2) "learning portal revenues" consist of online
        hosting and tuition revenues for third parties; and 3)
        "development and other revenues" are derived from our delivery
        of professional services.

   --  Gross margins improved from 60% of total revenues in the third
        quarter of 2005 to 64% in the third quarter of 2006. Gross
        margin for the second quarter of 2006 was at 65%.

   --  Product development and operations costs as a percent of total
        revenues declined from 49% in the third quarter of 2005 to 32%
        in the third quarter of 2006. Management expects these costs
        as a percentage of total revenues to decline further in the
        future. Product development and operations costs represented
        48% of revenues for the second quarter of 2006.

   --  Non-cash operating costs which include depreciation and
        amortization, impairment of goodwill, and stock-based
        compensation grew from $352,560 in the third quarter of 2005
        to $1,061,156 in the third quarter of 2006. Non-cash operating
        costs were $567,433 for the second quarter of 2006.

   --  The Company raised $2.7 million in net proceeds in September
        of 2006 from a $3 million convertible debt offering with a
        fixed conversion price. These funds will help finance the
        integration of the recently-acquired Prosoft operations with
        VCampus, fund expansion of sales and marketing of
        certification products and enhancement of the testing software
        to help host proctored exams for Prosoft certifications and
        retire other company debt obligations.

   --  Using number of exams taken as a barometer of market
        acceptance, CIW's Academic market exams have grown 132% from
        1,032 in the 2004-2005 academic year to 2,396 exams in the
        2005-2006 academic year. Much of this growth is driven by the
        five states with which Prosoft has articulation
        agreements: Virginia, Tennessee, Arkansas, Michigan, and
        Louisiana. Other states like Wisconsin and Washington are
        coming on stream now. We will be focusing on refining our
        strategy to grow in this market through community colleges.

   --  The total number of CIW exams delivered grew 23% from 2,054
        exams in Q3-05 to 2,533 exams in Q3-06. The growth was driven
        partly by increased demand from Japan and Egypt. We now have
        over 44,000 CIW certified individuals worldwide who
        collectively have earned over 85,000 certifications.

   --  CTP certification is gaining ground as we have grown 50% in
        Q3-06 compared to Q3-05 averaging 100 exams a month since
        June. The pass rate for these exams is 66%. We now have over
        3,000 CTP certified professionals worldwide.

   --  Online tuition through our Select Partner agreements grew 25%
        from Q2-06 to $200,000

   Commenting on the business transition, Nat Kannan, CEO of VCampus,
said, "Three years ago we made a commitment to turn around the company
from its total reliance for 100% of its revenues on a pure
commoditized, e-Learning model to one where the company had an
exclusive position in a growing market for valuable professional
certifications worldwide. We have finally made this transition with
significant help from our Select Partners and the acquisition of
Prosoft Learning. This has been a challenging transition and now our
goal is to drive revenues and rationalize our cost structure to get to
breakeven shortly and profitability by mid-2007. We currently derive
74% of our revenues from certification-related business through both
outright ownership of certifications and through exclusive
relationships with world class certifying bodies in the areas of
Finance, Information Security and Healthcare. The two certifications
we own through the acquisition of Prosoft, CIW and CTP, have
established leadership positions in rapidly emerging Web technologies
and the convergence of voice, video, and data over the Internet."

   The company reported total revenues of $2,524,733 in the third
quarter of 2006 compared to total revenues of $1,407,668 in the second
quarter of 2006 and $1,244,612 in the third quarter of 2005. The
operating loss for the three months ended September 30, 2006 was
$1,986,261 compared to $1,332,259 and $905,633 for the three months
ended June 30, 2006 and September 30, 2005, respectively. With the
adoption of the new equity-based compensation standards under SFAS
123R effective January 1, 2006, the non-cash charge for stock-based
compensation increased to $215,883 in the third quarter of 2006 from
$17,500 in the third quarter of 2005. Stock-based compensation for the
second quarter of 2006 was $292,472. During the third quarter of 2006,
the company recorded a non-cash deemed dividend of $1,491,666
representing the beneficial conversion feature associated with its
Series A-1 Preferred Stock as a result of the automatic adjustment in
the conversion price for such shares and the exercise price of the
related warrants to $0.30 per share, following the Company's September
2006 private placement. Also during the third quarter, the company
recorded a non-cash charge of approximately $165,000, which represents
amortization of debt discount and deferred debt offering costs related
to the issuance of approximately $3.6 million (September 30, 2006
principal amount of approximately $1.1 million) of convertible
promissory notes in March 2004. Corresponding charges in the second
quarter of 2006 and third quarter of 2005 were approximately $109,000
and $285,000, respectively. During the third quarter of 2006, the
Company recorded a non-cash goodwill impairment charge of $328,317.
Including these non-cash charges, VCampus reported a net loss to
common stockholders in the third quarter of 2006 of $3,816,235, or
$0.38 per share, compared to a net loss to common stockholders of
$1,212,427, or $0.13 per share, for the third quarter of 2005 and
$2,624,342, or $0.27 per share, in the second quarter of 2006.

   For the nine months ended September 30, 2006, the company reported
revenue of $5,209,603, compared to $3,466,283 for the same period in
2005. The operating losses for the nine months ended September 30,
2006 and 2005 were $5,030,608 and $3,558,089, respectively. Including
a non-cash deemed dividend of $2,523,369 and a goodwill impairment
charge of $328,317 in the 2006 period, stock-based compensation of
$664,992 and $91,994 for the 2006 and 2005 periods, respectively, and
approximately $391,000 and $936,000 of non-cash debt discount and
deferred debt offering costs amortization for the 2006 and 2005
periods, respectively, VCampus reported a net loss to common
stockholders of $8,347,970 ($0.86 per share) for the nine months of
2006, compared to $4,571,204 ($0.50 per share) for the same period in
2005.

   The company ended the quarter with approximately $2.4 million in
cash compared to approximately $2.1 million in cash on June 30, 2006.

   Conference Call and Webcast

   Mr. Kannan and Mr. Nelson will hold a conference call to discuss
the third quarter financial results. The call is scheduled for 4:30 PM
Eastern Time on November 14, 2006. Interested parties may participate
by dialing [phone]. International callers may dial (617)
213-8855. Please enter the passcode 76763944.

   This call is also being webcast by Thomson/CCBN and can be
accessed at the VCampus web site at www.vcampus.com. The webcast is
also being distributed through the Thomson StreetEvents Network to
both institutional and individual investors. Individual investors can
listen to the call at www.fulldisclosure.com, Thomson/CCBN's
individual investor portal, powered by StreetEvents. Institutional
investors can access the call via Thomson's password-protected event
management site, StreetEvents (www.streetevents.com).

   A replay of the call will be available via telephone from
approximately 6:30 PM Eastern Time on November 14, 2006 until 6:30 PM
Eastern Time on November 21, 2006. To listen to the replay,
participants in the U.S. and Canada should dial [phone], and
international participants should dial [phone]. The conference
ID for the replay is 68701683.

   About VCampus(R)

   VCampus Corporation (OTCBB:VCMP.OB), a provider of comprehensive,
outsourced e-Learning services, helps organizations that offer
professional certifications and credentials unlock the value of their
traditional branded course content. Through its innovative Select
Partner(R) Program, VCampus repurposes value-added training content
for online delivery to enhance and support professional development
programs. The Select Partner Program provides custom course
development, publishing, hosting, e-commerce, reporting, account
support and marketing services. With over a decade of e-Learning
experience, VCampus has delivered more than 3.1 million courses to
more than 1 million desktops/users in professional credentialing and
certification organizations, associations, non-profits, corporations,
and government agencies. VCampus distributes a courseware library of
more than 3,400 web-based courses. VCampus Corporation is
headquartered in Reston, VA. For more information, call 800-915-9298,
or visit the VCampus Web site at www.vcampus.com. "VCampus" and
"Select Partner" are registered trademarks of VCampus Corporation.

   About Prosoft Learning, a VCampus Company

   Prosoft offers content and certifications to enable individuals to
develop and validate critical Information and Communications
Technology (ICT) workforce skills. Prosoft is active in the workforce
development arena, working with state and local governments and school
districts to provide ICT education solutions for high school and
community college students. Prosoft has created and distributes a
comprehensive library of classroom and e-learning courses. Prosoft
distributes its content through its ComputerPREP division to
individuals, schools, colleges, commercial training centers and
corporations worldwide. Prosoft owns the CIW job-role certification
program for Internet technologies and the CCNT (Certified in
Convergent Network Technologies) certification, and manages the CTP
(Convergence Technologies Professional) vendor-neutral certification
for telecommunications. To learn more, visit www.ProsoftLearning.com,
www.ComputerPREP.com, www.CIWcertified.com and www.CTPcertified.com.
"CIW" and "CTP" are registered trademarks of Prosoft.

   Forward Looking Statements

   This press release contains forward-looking statements within the
meaning of the federal Private Securities Litigation Reform Act of
1995. Statements contained herein that are not statements of
historical fact are forward-looking. Without limiting the foregoing,
references to future growth or expansion or scheduled product launch
dates are forward-looking, and words such as "anticipates,"
"believes," "could," "estimate," "designed to," "expect," "intend,"
"may," "might," "should," "will," and "would" and other forms of these
words or similar words are intended to identify forward-looking
information. You should read statements that contain these words
carefully because they discuss our future expectations, contain
projections of our future results of operations or of our financial
position or state other forward-looking information. There might be
events in the future that we are not able to predict accurately or
control, and any forward-looking statements are subject to risks and
uncertainties that could cause our actual results to differ
materially. These risks and uncertainties include: (1) our history of
losses, projection of future losses and our need to raise additional
capital; (2) market acceptance of our new and future products; (3)
uncertainties regarding the successful implementation of our Select
Partner Program or the timely release of products; (4) uncertainties
regarding our ability to achieve growth organically or otherwise and
to consummate and integrate any acquisitions, including Prosoft; and
(5) growing competition. For additional information regarding risk
factors that could affect our future results, please refer to the
discussions of "Risk Factors" in our Annual Report on Form 10-K for
the year ended December 31, 2005 and other SEC filings.

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                         VCAMPUS CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)

                      Three Months Ended         Nine Months Ended
                         September 30,             September 30,
                   ------------------------- -------------------------
                      2005         2006         2005         2006
                   ------------ ------------ ------------ ------------
Revenues:
  Certification
   related revenues   $203,785   $1,858,473     $505,637   $2,497,402
  Learning portal
   revenues            830,230      547,588    2,580,534    2,145,384
  Development and
   other revenues      210,597      118,672      380,112      566,817
                   ------------ ------------ ------------ ------------
Net revenues         1,244,612    2,524,733    3,466,283    5,209,603
Costs and expenses:
  Cost of revenues     495,675      921,007    1,345,237    1,823,350
  Sales and
   marketing           380,062      881,171    1,304,216    1,674,069
  Product
   development and
   operations          605,155      799,087    2,014,584    2,152,310
  General and
   administrative      316,793      848,573    1,151,244    1,926,072
  Sales and use tax
   assessment               --           --           --      400,000
  Depreciation and
   amortization        335,060      516,956    1,117,097    1,271,101
  Impairment of
   goodwill                 --      328,317           --      328,317
  Stock-based
   compensation         17,500      215,883       91,994      664,992
                   ------------ ------------ ------------ ------------
Total costs and
 expenses            2,150,245    4,510,994    7,024,372   10,240,211
                   ------------ ------------ ------------ ------------
Loss from
 operations           (905,633)  (1,986,261)  (3,558,089)  (5,030,608)
Interest expense
 and amortization
 of debt discount
 and debt offering
 costs, net           (306,794)    (189,433)  (1,013,115)    (429,487)
                   ------------ ------------ ------------ ------------
Net loss           $(1,212,427) $(2,175,694) $(4,571,204) $(5,460,095)
Dividends to
 preferred
 stockholders               --   (1,640,541)          --   (2,887,875)
                   ------------ ------------ ------------ ------------
Net loss
 attributable to
 common
 stockholders      $(1,212,427) $(3,816,235) $(4,571,204) $(8,347,970)
                   ============ ============ ============ ============
Net loss per share,
 basic                  $(0.13)      $(0.38)      $(0.50)      $(0.86)
                   ============ ============ ============ ============
Net loss per share
 -- assuming
 dilution               $(0.13)      $(0.38)      $(0.50)      $(0.86)
                   ============ ============ ============ ============
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                         VCAMPUS CORPORATION
                     CONSOLIDATED BALANCE SHEETS

                                           December 31,  September 30,
                                               2005          2006
                                           ------------- -------------
                                                          (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents                  $2,488,159    $2,362,893
  Accounts receivable, net                      209,338       702,634
  Loans receivable from related party            15,453            --
  Prepaid expenses and other current
   assets                                       325,818       677,560
                                           ------------- -------------
Total current assets                          3,038,768     3,743,087
Property and equipment, net                     313,880       329,806
Capitalized software costs and courseware
 development costs, net                       1,308,577       510,744
Other assets                                    231,859       789,221
Other intangible assets, net                    257,006     1,546,467
Goodwill                                        328,317       765,433
                                           ------------- -------------
  Total assets                               $5,478,407    $7,684,758
                                           ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                           $1,182,585    $1,666,789
  Accrued expenses                              479,316       825,342
  Accrued sales and use tax liability                --       400,000
  Capital lease obligation                           --        22,346
  Notes payable                                 191,796       457,067
  Deferred revenues                             469,280       924,917
  Accrued dividends payable to preferred
   stockholders                                  14,312        56,875
                                           ------------- -------------
  Total current liabilities                   2,337,289     4,353,336
Long-term liabilities:
  Notes payable--less discount and current
   portion                                      479,489     1,866,619
  Capital lease obligation - net of
   current portion                                   --        42,478
                                           ------------- -------------
  Total liabilities                           2,816,778     6,262,433
Commitments and contingencies:                       --            --
Stockholders' equity:
  Series A-1 convertible Preferred Stock             23            23
  Series B-1 convertible Preferred Stock             --            25
  Common Stock, $0.01 par value per share        95,921       101,379
  Additional paid-in capital                105,418,644   112,540,736
  Accumulated deficit                      (102,852,959) (111,200,929)
  Accumulated other comprehensive loss               --       (18,909)
                                           ------------- -------------
  Total stockholders' equity                  2,661,629     1,422,325
                                           ------------- -------------
  Total liabilities and stockholders'
   equity                                    $5,478,407    $7,684,758
                                           ============= =============
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