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<SEC-DOCUMENT>0001193125-03-037523.txt : 20030814
<SEC-HEADER>0001193125-03-037523.hdr.sgml : 20030814
<ACCEPTANCE-DATETIME>20030814130222
ACCESSION NUMBER:		0001193125-03-037523
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTERLINK ELECTRONICS INC
		CENTRAL INDEX KEY:			0000828146
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER PERIPHERAL EQUIPMENT, NEC [3577]
		IRS NUMBER:				770056625
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21858
		FILM NUMBER:		03845313

	BUSINESS ADDRESS:	
		STREET 1:		546 FLYNN RD
		CITY:			CAMARILLO
		STATE:			CA
		ZIP:			93012
		BUSINESS PHONE:		8054848855

	MAIL ADDRESS:	
		STREET 1:		546 FLYNN ROAD
		CITY:			CAMARILLO
		STATE:			CA
		ZIP:			93012

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERLINK ELECTRONICS
		DATE OF NAME CHANGE:	19940525
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML><HEAD>
<TITLE>Form 10-Q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <HR noshade size="4" color="black" ><br> <p style=' margin-bottom:0pt;text-align:center; margin-top:0pt;'><b><font SIZE=4>UNITED STATES</font></b><br><b><font SIZE=4>SECURITIES AND EXCHANGE COMMISSION</font></b></p>
<p style=' margin-bottom:0pt;text-align:center; margin-top:0pt;'><b><font size=2>Washington, D.C. 20549</font></b></p> <HR noshade width="120" color="black" > <p style=' margin-bottom:0pt;text-align:center; margin-top:12pt;'><b><font SIZE=4>FORM
10-Q</font></b></p> <HR noshade width="120" color="black" >
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="5.56%" nowrap valign="top"><b><font size=2><font face=Wingdings>x</font></font></b></td>
<td valign="top"><b><font size=2>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="5.56%" nowrap valign="top"><font size=2>&nbsp;</font></td>
<td valign="top"><b><font size=2>For the quarterly period ended June 30, 2003</font></b></td></tr></table> <p style=' margin-bottom:0pt;text-align:center; margin-top:12pt;'><b><font SIZE=2>OR</font></b></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="5.56%" nowrap valign="top"><b><font size=2><font face=Wingdings>o</font></font></b></td>
<td valign="top"><b><font size=2>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="5.56%" nowrap valign="top"><font size=2>&nbsp;</font></td>
<td valign="top"><b><font size=2>For the transition period from ________ to ________</font></b></td></tr></table> <p style=' margin-bottom:0pt;text-align:center; margin-top:12pt;'><b><font size=2>Commission File No. 0-21858</font></b></p> <HR
noshade width="120" color="black" > <p style=' margin-bottom:0pt;text-align:center; margin-top:8pt;'><b><font SIZE=5>INTERLINK ELECTRONICS, INC.</font></b></p> <p style=' margin-bottom:0pt;text-align:center; margin-top:0pt;'><b><font size=1>(Exact
name of registrant as specified in its charter)</font></b></p> <HR noshade width="120" color="black" > <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="50">&nbsp;</td>
<td align=center valign=top width="280"><b><font size=2>Delaware </font></b><br> <b><font size=1>(State or other jurisdiction of</font></b><br> <b><font size=1>incorporation or organization)</font></b><br></td>
<td align=center width="280">&nbsp;</td>
<td align=center valign=top width="280"><b><font size=2>77-0056625</font></b><br> <b><font size=1>(I.R.S. Employer Identification Number)</font></b><br> <font size=1>&nbsp;</font></td>
<td width="50">&nbsp;</td></tr></table><br> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="50">&nbsp;</td>
<td align=center valign=top width="280"><b><font size=2>546 Flynn Road</font></b><br> <b><font size=2>Camarillo, California</font></b><br> <b><font size=1>(Address of principal executive offices)</font></b><br></td>
<td align=center width="280">&nbsp;</td>
<td align=center valign=top width="280"><font size=2>&nbsp;</font><br> <b><font size=2>93012</font></b><br> <b><font size=1>(Zip Code)</font></b></td>
<td width="50">&nbsp;</td></tr></table><br> <p style=' margin-bottom:0pt;text-align:center; margin-top:12pt;'><b><font size=2>(805) 484-8855</font></b><br><b><font size=1>(Registrant&#146;s telephone number, including area code)</font></b></p> <p
style=' margin-bottom:0pt;text-align:center; margin-top:12pt;'><b><font size=2>Not applicable.</font></b><br><b><font size=1>(Former name, former address and former fiscal year</font></b><br><b><font size=1>if changed since last
report)</font></b></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:8pt;'><font size=2>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.</font></p> <p style=' margin-bottom:0pt;
margin-left:4%; margin-top:8pt;'><font size=2>Yes <font face=Wingdings>x</font> No <font face=Wingdings>o</font></font></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:8pt;'><font size=2>Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes <font face=Wingdings>o</font> No <font face=Wingdings>x</font></font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Shares of Common Stock Outstanding, at
August 1, 2003: 10,866,241</font></p> <br><HR noshade size="4" color="black" > <br><p style='margin-bottom:0pt;text-align:left'><font size=2> </font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt;text-align:center; margin-top:16pt;'><b><font size=2>PART I &#150; FINANCIAL INFORMATION</font></b></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top"><b><font size=2>Item 1.</font></b></td>
<td valign="top"><b><font size=2>Financial Statements</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font SIZE=2>INTERLINK ELECTRONICS, INC.</font></b><br><font SIZE=2>CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)</font><br><i><font size=2>(IN THOUSANDS, EXCEPT PAR VALUE)</font></i></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>December</font></b><font size=1>&nbsp;</font><b><font size=1>31,</font></b><br> <b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><b><font size=2>Assets</font></b></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Current assets:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Cash and cash equivalents</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>7,906</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>5,775</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Accounts receivable, less allowance for doubtful accounts of $497 and $534 at 2002 and 2003, respectively</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>5,308</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>7,232</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Inventories</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>7,006</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>8,734</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Prepaid expenses and other current assets</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>259</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>330</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total current assets</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>20,479</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>22,071</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Property and equipment, net</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>1,211</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>1,035</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Patents and trademarks, less accumulated amortization of $1,100 and $1,109 at 2002 and 2003, respectively</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Other assets</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>67</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>66</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Total assets</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>21,766</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>23,172</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><b><font size=2>Liabilities and Stockholders&#146; Equity</font></b></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Current liabilities:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Current maturities of long-term debt</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>933</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>694</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Accounts payable</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>2,201</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>3,586</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Accrued payroll and related expenses</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>922</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>746</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Other accrued expenses</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>176</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>176</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total current liabilities</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,232</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>5,202</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Long-term debt, net of current portion</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>1,401</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>1,192</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Commitments and contingencies</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Stockholders&#146; equity:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Preferred stock, $5.00 par value (100 shares authorized, none issued and outstanding)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Common stock, $0.00001 par value (50,000 shares authorized, 9,778 and 9,853 shares issued and outstanding at 2002 and 2003, respectively)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>29,074</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>29,285</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Due from stockholders</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(797</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(797</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Accumulated other comprehensive loss</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>(837</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>(824</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Accumulated deficit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(11,307</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (10,886</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total stockholders&#146; equity </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>16,133</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>16,778</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Total liabilities and stockholders&#146; equity</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>21,766</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>23,172</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt;text-align:center; margin-top:18pt;'><font size=2>The accompanying notes are an integral part of these consolidated financial
statements.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>2</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font SIZE=2>INTERLINK ELECTRONICS, INC.</font></b><br><font SIZE=2>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)</font><br><font
size=2>(</font><i><font SIZE=2>IN THOUSANDS, EXCEPT PER SHARE DATA)</font></i></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" colspan="5" valign=bottom > <p align=center ><b><font size=1>Three</font></b><font size=1>&nbsp;</font><b><font size=1>Month</font></b><font size=1>&nbsp;</font><b><font size=1>Period</font></b><br> <b><font
size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" colspan="6" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Month</font></b><font size=1>&nbsp;</font><b><font size=1>Period</font></b><br> <b><font
size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="5" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="6" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Revenues</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>6,027</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>7,476</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>11,436</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>14,478</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Cost of revenues</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>3,553</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>4,350</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>6,695</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>8,422</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Gross profit </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,474</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,126</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,741</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>6,056</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Operating expense:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Product development and research</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>868</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>817</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,733</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,736</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Selling, general and administrative </font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>1,889</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>2,112</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>3,730</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>4,064</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total operating expense</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,757</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,929</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>5,463</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>5,800</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Operating income (loss)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(283</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>197</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(722</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>256</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Other income (expense):</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Interest income (expense), net</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(3</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(9</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>16</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(12</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Minority interest</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Other income (expense)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(58</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>5</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(37</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>195</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total other income (expense)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(50</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(4</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(10</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>183</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Income (loss) before provision for income taxes</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(333</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>193</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(732</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>439</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Provision for income tax expense</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>12</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>18</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Net income (loss)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(333</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>181</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (732</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>421</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top >&nbsp;</td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Earnings (loss) per share &#150; basic </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(.03</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>.02</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(.07</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>.04</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Earnings (loss) per share &#150; diluted</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(.03</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>.02</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(.07</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>.04</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Weighted average shares &#150; basic </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,763</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,807</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,761</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'>&nbsp;</td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,793</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Weighted average shares &#150; diluted</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>9,763</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>11,108</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>9,761</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom >&nbsp;</td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>10,797</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt;text-align:center; margin-top:18pt;'><font size=2>The accompanying notes are an integral part of these consolidated financial
statements.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>3</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font SIZE=2>INTERLINK ELECTRONICS, INC.</font></b><br><font SIZE=2>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)</font><br><font
size=2>(</font><i><font SIZE=2>IN THOUSANDS)</font></i></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" colspan="5" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Month</font></b><font size=1>&nbsp;</font><b><font size=1>Period</font></b><br> <b><font
size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="5" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Cash flows from operating activities:</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Net income (loss)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2> (732</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>421</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Adjustments to reconcile net income (loss) to net cash used in operating activities:</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Provision for bad debts</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>35</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>33</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Depreciation and amortization</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>495</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>311</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Minority Interest </font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>(11</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom > <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Changes in operating assets and liabilities:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Accounts receivable</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>667</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(1,957</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom height="2" > <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Inventories</font></p> </td>
<td width="1%" valign=bottom height="2" > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom height="2" > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom height="2" > <p align=right ><font size=2>(781</font></p> </td>
<td width="1%" valign=bottom height="2" > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom height="2" > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom height="2" > <p align=right ><font size=2>(1,728</font></p> </td>
<td width="1%" valign=bottom height="2" > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Prepaid expenses and other current assets</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>263</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(71</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom > <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Other assets</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>81</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>1</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Accounts payable</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>(216</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>1,385</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom > <p style='margin-left:34.55pt;text-indent:-8.65pt;'><font size=2>Accrued payroll and related expenses</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>272</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(176</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:.6in;text-indent:-8.65pt;'><font size=2>Net cash used in operating activities</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>73</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(1,781</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Cash flows from investing activities:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Sales of marketable securities</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>2,457</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Purchases of property and equipment</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(251</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(126</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Costs of patents and trademarks</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>(14</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:.6in;text-indent:-8.65pt;'><font size=2>Net cash provided by (used in) investing activities</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>2,192</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(126</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Cash flows from financing activities:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Principal payments on debt</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>(500</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(448</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Principal payments on capital lease obligation</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>(47</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Due from stockholders</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>40</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Proceeds from issuance of common stock, net</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>23</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>211</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:.6in;text-indent:-8.65pt;'><font size=2>Net cash used in financing activities</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>(484</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(237</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Effect of exchange rate changes on cash</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>30</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>13</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Increase (decrease) in cash and cash equivalents</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>1,811</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>(2,131</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=2>)</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Cash and cash equivalents:</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Beginning of period</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>6,868</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>7,906</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>End of period</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>8,679</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>5,775</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Supplemental disclosures of cash flow information:</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr bgcolor="#cceeff" >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Interest paid</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>45</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>25</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Income taxes paid</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom> <p align=right ><font size=2>1</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom> <p align=right ><font size=2>1</font></p> </td>
<td width="1%" valign=bottom> <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt;text-align:center; margin-top:18pt;'><font size=2>The accompanying notes are an integral part of these consolidated financial
statements</font><i><font size=2>.</font></i></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>4</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font SIZE=2>INTERLINK ELECTRONICS, INC.</font></b><br> <font SIZE=2>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font><br> <font size=2>FOR THREE MONTHS AND
SIX MONTHS ENDED June 30, 2003 (UNAUDITED)</font></p> <p style=' margin-bottom:0pt; margin-top:12pt;'>&nbsp;</p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>1.</font></b></td>
<td valign="top"><b><font size=2>Basis of Presentation of Interim Financial Data</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The financial information as of June 30, 2003 and for the three month and six
month periods ended June 30, 2002 and 2003 included in this report is unaudited. Such information, however, reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods. The interim statements should be read in conjunction with the financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31,
2002.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.</font></p> <p style='
margin-bottom:0pt; margin-top:8pt;'>&nbsp;</p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>2.</font></b></td>
<td valign="top"><b><font size=2>Earnings Per Share</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>For all periods presented, per share information was computed pursuant to provisions of the Statement of
Financial Accounting Standards (SFAS) No.&nbsp;128, &#147;Earnings Per Share&#148;, issued by the Financial Accounting Standards Board (FASB). The computation of earnings per share&#151;basic is based upon the weighted average number of common
shares outstanding during the periods presented. Earnings per share&#151;diluted also includes the effect of common shares contingently issuable from options and warrants in periods in which they have a dilutive effect. </font></p> <p style='
margin-bottom:0pt; margin-top:8pt;'><font size=2>Common stock equivalents are calculated using the treasury stock method. Under the treasury stock method, the proceeds from the assumed conversion of options and warrants are used to repurchase
outstanding shares using a yearly average market price. </font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The following table contains information necessary to calculate earnings (loss) per share (in thousands): </font></p> <p
style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=bottom > <p align=center ><b><font size=1>Three Months</font></b><br> <b><font size=1>Ended June 30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=bottom > <p align=center ><b><font size=1>Six Months</font></b><br> <b><font size=1>Ended June </font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Weighted average shares outstanding &#150; basic </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,763 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,807 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> 9,761 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> 9,793</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Effect of dilutive securities (options)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2> &#151;</font><sup></sup></p> </td>
<td width="1%" valign=bottom > <p ><font size=2><sup>(1)</sup></font><sup></sup></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2><sup> </sup>1,301 </font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2> &#151;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2><sup>(1)</sup></font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> 1,004 </font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Weighted average shares&#150; diluted</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> 9,763</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>11,108 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> 9,761 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> 10,797</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:0pt;'><b><font size=2>______________</font></b></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>(1)</font></td>
<td valign="top"><font size=2>Due to the net loss in 2002, the diluted share calculation result was anti-dilutive. Thus, the basic weighted average shares were used. Shares of common stock equivalents of approximately 1.8 million and 672,000 for the
three months ended June 30, 2002 and 2003, respectively and 1.7 million and 1.0 million for the six months ended June 30, 2002 and 2003, respectively, were not included in the diluted calculations because they were anti-dilutive. </font></td> </tr>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td> </tr> </table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>3.</font></b></td>
<td valign="top"><b><font size=2>Comprehensive Income (Loss)</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The following table provides the data required to calculate comprehensive income (loss) in
thousands:</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>5</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Accumulated</font></b><font size=1>&nbsp;</font><b><font size=1>Other</font></b><br> <b><font size=1>Comprehensive</font></b><br> <b><font size=1>Loss</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Comprehensive</font></b><br> <b><font size=1>Income</font></b><font size=1>&nbsp;</font><b><font size=1>(Loss)</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Balance at December 31, 2001</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(843</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Translation adjustment</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="8%" valign=bottom > <p align=right ><font size=2> 30</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>30</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Net loss</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (732</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Balance at June 30, 2002</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(813</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (702</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Balance at December 31, 2002</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(837</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Translation adjustment</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="8%" valign=bottom > <p align=right ><font size=2>13</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>13</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Net income</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>421</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;'><font size=2>Balance at June 30, 2003</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(824</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>434</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>4.</font></b></td>
<td valign="top"><b><font size=2>Segment Information</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The Company has four business segments: (i)&nbsp;business communications; (ii) home entertainment; (iii)
e-transactions; and (iv)&nbsp;specialty components. The accounting policies of the segments are the same as those described in &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting
Policies.&#148; However, the Company evaluates performance based on revenue and gross profit. The Company does not allocate any other income, expenses or assets to these segments. Reportable segment information for the six months ended June&nbsp;30,
2002 and 2003 is as follows (in thousands): </font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p ><b><font size=1>Six Months Ended:</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Business </font></b><br> <b><font size=1>Communications</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Home </font></b><br> <b><font size=1>Entertainment</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>E-Transactions</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Specialty </font></b><br> <b><font size=1>Components</font></b><br> <b><font size=1>and Other</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Total</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>June 30, 2002</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="7%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="7%" valign=bottom > <p align=right ><font size=2>7,008</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>1,350</font><sup></sup></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>788</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>2,290</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>11,436</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Gross profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="7%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,592</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>608</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>470</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,071</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,741</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>June 30, 2003</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="7%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Revenue</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="7%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>9,551</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>970</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="6%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,554</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,403</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>14,478</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Gross profit</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="7%" valign=bottom > <p align=right ><font size=2>3,173</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>449</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="6%" valign=bottom > <p align=right ><font size=2>856</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>1,578</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>6,056</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>5.</font></b></td>
<td valign="top"><b><font size=2>Inventories</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Inventories consisted of the following (in thousands): </font></p> <p style=' margin-bottom:0pt;
margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>December</font></b><font size=1>&nbsp;</font><b><font size=1>31,</font></b><br> <b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Raw material</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,661</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,061</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Work in process</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>809</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>865</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Finished goods</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,536</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,808</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Total inventories</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>7,006</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>8,734</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>6</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>6.</font></b></td>
<td valign="top"><b><font size=2>Stock Options</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Under the terms of the Company&#146;s stock option plans, officers and key employees may be granted non-qualified
or incentive stock options and outside directors and independent contractors of the Company may be granted non-qualified stock options. The aggregate number of shares which may be issued under the plans is 8,026,225. Options are granted at fair
market value on the date of grant and generally vest ratably over 36 months and have a five-year term but terminate earlier if employment is terminated. As of June 30, 2003 there were 591,000 options available for grant.</font></p> <p style='
margin-bottom:0pt; margin-top:8pt;'><font size=2>First half 2003 activity under the stock option plans is summarized as follows (in thousands, except per share information): </font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font
size=2>&nbsp;</font></p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>Options</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>Wgt.</font></b><font size=1>&nbsp;</font><b><font size=1>avg.</font></b><br> <b><font size=1>Exercise</font></b><font size=1>&nbsp;</font><b><font size=1>Price</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Outstanding beginning of period </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,617</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3.72</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Granted</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>691</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>2.92</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Exercised</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (74</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2.82</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Forfeited or expired</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (20</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>22.60</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Outstanding end of period</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,214</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3.61</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Exercisable end of period</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,354</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3.48</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:8pt;'><font size=2>The following table summarizes information about stock options outstanding as of
June&nbsp;30, 2003 (in thousands, except per share information): </font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td width="9%" valign=bottom > <p align=center style='margin-left:-.05pt; text-indent:.05pt;'><b><font size=1>Exercise</font></b><br> <b><font size=1>Price Per</font></b><br> <b><font size=1>Share</font></b></p> </td>
<td width="2%" valign=bottom > <p align=center ><font size=1>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=center ><b><font size=1># of </font></b><br> <b><font size=1>Options </font></b><br> <b><font size=1>Outstanding</font></b></p> </td>
<td width="2%" valign=bottom > <p align=center ><font size=1>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=center ><b><font size=1>Months </font></b><br> <b><font size=1>Remaining</font></b><br> <b><font size=1>On</font></b><br> <b><font size=1>Contractual</font></b><br> <b><font size=1>Life</font></b></p> </td>
<td width="2%" valign=bottom > <p align=center ><font size=1>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=center ><b><font size=1>Options</font></b><br> <b><font size=1>Exercisable</font></b></p> </td>
<td width="2%" valign=bottom > <p align=center ><font size=1>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=center ><b><font size=1>Options</font></b><br> <b><font size=1>Un- </font></b><br> <b><font size=1>exercisable</font></b></p> </td>
<td width="2%" valign=bottom > <p align=center >&nbsp;</p> </td> </tr>
<tr >
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>$ 1.83</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>1,169</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>3</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>1,169</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>2.40</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>673</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>37</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>369</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>304</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>2.70</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>45</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>57</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>4</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>41</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>2.94</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>565</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>56</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>558</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>7</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>3.04</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>74</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>81</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>18</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>56</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>3.08</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>202</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>8</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>202</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>3.30</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>12</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>56</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>1</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>11</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>3.54</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>4</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>44</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>2</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>2</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>3.67</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>53</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>10</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>53</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>4.30</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>21</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>54</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>3</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>18</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>4.42</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>363</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>42</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>179</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>184</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>5.50</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>64</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>15</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>64</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>5.51</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>80</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>34</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>58</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>22</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>5.65</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>23</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>60</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>23</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>6.87</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>866</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>32</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom style='background:#CCEEFF; '> <p align=right ><font size=2>674</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>192</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="9%" valign=bottom > <p align=right style='margin-left:8.65pt; text-indent:-8.65pt;'><font size=2>Total</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>4,214</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="10%" valign=bottom > <p align=right ><font size=2>3,354</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="9%" valign=bottom > <p align=right ><font size=2>860</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>7</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The weighted average fair value at the date of grant for stock options granted during the six months ended June 30, 2002 and 2003 was $1.87 and $1.65 per
option, respectively. The fair value of options at the date of grant was estimated using the Black-Scholes model with the following weighted average assumptions: </font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="3" valign=bottom > <p align=center ><b><font size=1>Six Months</font></b><br> <b><font size=1>Ended&nbsp;June&nbsp;30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Expected life (years)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Interest rate</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>1.5</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>3.0</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Volatility</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>75</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>63</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Dividend yield</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The Company applies Accounting Principles Board (&#147;APB&#148;) Opinion No.&nbsp;25,
&#147;Accounting for Stock Issued to Employees&#148;, and related interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for these plans. Had compensation cost for the Company&#146;s plans
been determined based on the fair value at the grant dates for awards under the plans consistent with the method of SFAS No.&nbsp;123, &#147;Accounting for Stock-Based Compensation&#148;, the Company would have recorded stock-based compensation
expense as follows (in thousands except per share information): </font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="11%" colspan="5" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><br> <b><font size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="5" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Net income (loss) &#150; as reported</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(732</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>421</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2> &#150; pro forma</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (3,534</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (2,360</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2> Basic earnings (loss) per share &#150; as reported</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(.07</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>.04</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2> &#150; pro forma</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (.36</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (.24</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2> Diluted earnings (loss) per share &#150; as reported</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(.07</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>.04</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2> &#150; pro forma</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (.36</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (.22</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td> </tr> </table> <br>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="4%" nowrap valign="top"><b><font size=2>7.</font></b></td>
<td valign="top"><b><font size=2>Recent Pronouncements</font></b></td></tr></table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In November 2002, the Emerging Issues Task Force (&#147;EITF&#148;) issued Issue No. 00-21, Accounting
for Revenue Arrangements with Multiple Deliverables. This issue addresses determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how arrangement consideration should be measured and
allocated to the separate units of accounting. EITF Issue No. 00-21 will be effective for revenue arrangements entered into in fiscal quarters beginning after June 15, 2003, or the Company may elect to report the change in accounting as a
cumulative-effect adjustment. We do not expect the adoption of this issue will have a material impact on our operating results or financial position.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In May 2003, the FASB issued
SFAS No.150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We do not expect the adoption of this statement to have a material impact on our financial condition or results of
operations.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>8</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-left:8.33%; text-indent:-8.33%; margin-top:12pt;'><b><font size=2>Item 2.</font></b><font size=2>&nbsp;&nbsp;&nbsp;</font><b><font size=2>Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations</font></b></p> <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Critical Accounting Policies</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Material
accounting policies that we believe are the most critical to an investor&#146;s understanding of our financial results and condition and require complex management judgment are discussed below.</font></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><i><font size=2>Revenue Recognition</font></i><font size=2>. We recognize revenue in accordance with SEC Staff Accounting Bulletin (SAB) No. 101, &#147;Revenue Recognition in Financial Statements&#148;, as amended by SAB No. 101A
and No. 101B. SAB No. 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and
(4) collectibility is reasonably assured. Determination of criteria (3) and (4) require management&#146;s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectibility of those fees. To
satisfy the criteria, we: (1) input orders based upon receipt of a customer purchase order; (2) record revenue upon shipment of goods when risk of loss and title transfer under our arrangements with customers or otherwise complying with the terms of
the purchase order; (3) confirm pricing through the customer purchase order; and (4) validate creditworthiness through past payment history, credit agency reports and other financial data. Other than through warranty rights, our customers do not
have explicit or implicit rights of return. Should changes in conditions cause management to determine the revenue recognition criteria are not met for certain future transactions, such as a determination that an outstanding account receivable has
become uncollectible, revenue recognized for any reporting period could be adversely affected.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><i><font size=2>Accounts Receivable and Allowance for Doubtful Accounts</font></i><font size=2>.
Our accounts receivable are unsecured, and we are at risk to the extent such amounts become uncollectible. We continually monitor individual account receivable balances, and provide for an allowance of doubtful accounts at the time collection may
become questionable based on payment performance or age of the receivable and other factors related to the customer&#146;s ability to pay.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><i><font size=2>Inventory Reserve. </font></i><font
size=2>At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. This evaluation includes analyses of forecast sales levels by product and historical demand. We write off inventories that are considered
obsolete. Remaining inventory balances are adjusted to approximate the lower of our cost or market value and result in a new cost basis in such inventory until sold. If future demand or market conditions are less favorable than our projections,
additional inventory write-down may be required, and would be reflected in cost of sales in the period the revision is made.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><i><font size=2>Provision for Income Tax</font></i><font size=2>.
We first achieved profitable operations in 1995. Because of net operating loss (NOL) carryforwards available both for our U.S.-based and Japan-based operations, we did not accrue income tax expense until 1999. In that year, due to the expiration or
full utilization of NOL carryforwards in California and Japan, we began to record a provision for income tax expense in those jurisdictions. By the end of 2000, we also began to accrue an income tax benefit related to our federal NOL carryforwards
to be used in future periods. However, in mid-2001, we began to record quarterly tax losses and suspended any further recognition of NOL carryforward tax benefits. In the fourth quarter of 2002, we recorded a full valuation allowance against the
deferred tax asset balance as it appeared more likely than not that we would be unable to realize it in future periods.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><i><font size=2>Foreign Exchange Exposure. </font></i><font size=2>We
have established relationships with most of the major original equipment manufacturers (OEMs)&nbsp;in the business communications market. Many of these OEM&#146;s are based in Japan and for the first half of 2002 and 2003, respectively,
approximately 29% and 22% of revenues came from Japanese customers. Revenues from these customers are denominated in Japanese yen and as a result we are subject to foreign currency exchange rate fluctuations in the yen/dollar exchange rate. We use
foreign currency forward contracts to hedge this exposure. The gain or loss from these contracts is recorded in business communications revenue. In addition, because our Japanese subsidiary&#146;s functional currency is the yen, the translation of
the net</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>9</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>assets of that subsidiary into the consolidated results will fluctuate with the yen/dollar exchange rate. The following table illustrates the impact of
foreign currency fluctuations on our yen-denominated revenues and the effectiveness of our foreign currency hedging activity (in thousands):</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="11%" colspan="5" valign=bottom > <p align=center ><b><font size=1>Three</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><font size=1>&nbsp;</font><b><font size=1>Ended</font></b><br> <b><font
size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td colspan="5" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><font size=1>&nbsp;</font><b><font size=1>Ended</font></b><br> <b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="5" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="5" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Effect of foreign currency fluctuation on revenues </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>115 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (6) </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>112 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (2</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Hedging gains (losses)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> (82</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>39</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>303</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>37</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Net revenue impact </font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>33</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>33</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>415</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>35</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td valign=top > <hr noshade width="100%" color="black" size="3"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Historical Factors Affecting Financial Performance</font></b></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>We were incorporated in California in February&nbsp;1985 and reincorporated in Delaware in July&nbsp;1996. Our stock was first listed on the Nasdaq National Market in June 1993.</font></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>From the inception of the Company, we developed and refined our </font><i><font size=2>Force Sensing Resistor</font></i><font size=2>, or FSR, technology and sold it to customers for electronic, musical, medical,
industrial and other applications, which we now refer to as the specialty components market. This business segment is characterized by customers who have long design cycles and who, once a technology is designed-in, retain that technology for a
relatively long period of time. We expect this segment of our business to experience only limited growth due to the limited resources we can allocate to it. </font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In 1992, we
introduced our first Interlink-branded computer-pointing device, PortaPoint, and in 1994, we introduced our first wireless pointing device. The device, called RemotePoint, established Interlink as a leading supplier of branded and OEM remote
controls and other products&nbsp;for the computerized presentation system market. This business segment has been our primary growth driver over the last five years and, in the first half of 2003, constituted 66% of our overall sales. Within the OEM
element of this segment, we have key customers both in the US and in Japan and thus we have been affected by the performance of each of these economies. Despite our sizable OEM market share, no one customer constitutes 10% or more of our
consolidated sales in the first half of 2003. Beginning in 2001, we began a renewed effort to expand our branded products product line and our branded products distribution channel.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font
size=2>In 1999, we introduced the electronic signature capture product, </font><i><font size=2>ePad</font></i><font size=2>, for our customers in the e-transactions market. Since then, we introduced ePad-Point of Sale, ePad-Ink and ePad-ID. To date,
much of the success in this segment has occurred with large corporate accounts in financial services, insurance and medical industries. Typically these accounts buy 3,000 to 5,000 units and purchase them all at the initial deployment; consequently
revenues in this segment have been relatively variable from quarter to quarter.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In 2000, we first demonstrated </font><i><font size=2>IntuiTouch </font></i><font
size=2>technology for the home entertainment market. Due to the general economic decline, the home entertainment market suffered a downturn beginning in 2001. In mid-2001, we scaled back our efforts related to interactive television. In 2001, 2002
and the first half of 2003, the Microsoft Xbox program constituted a high percentage of our home entertainment revenues.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Prior to
1999, operations was a net user of cash that we funded through existing cash balances, private placements of equity and to a lesser extent, bank and lease financing. In 1999, operations was a net provider of cash, generating $2.9&nbsp;million. In
2000, 2001 and 2002, operations was essentially cash flow break-even to marginally positive. In the first half of 2003, operations recorded a $1.8 million negative cash flow due to the further penetration into the business communications-branded
channel and the related working capital investment.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In response to the economic slowdown that began in mid-2001, we restructured our operations and increased our inventory and
bad debt reserves by $2 million and $300,000 respectively. In the fourth quarter of 2002, we wrote-off $2.3 million in obsolete and excess inventories related to our Japanese subsidiary.</font></p> <br><p
style='margin-bottom:0pt;text-align:center'><font
size=2>10</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In March, 2000 we licensed certain technology related to the production of FSR sensors to International Electronics and Engineering (IEE), a former affiliate
based in Luxembourg, for use in connection with sales of sensors to the automotive industry. We received significant payments under this license agreement commencing in 2000 ($2.5 million) and continuing through the third quarter of 2001 ($1.5
million). No further payments are due under this agreement. We have occasionally licensed other aspects of our technology in connection with the settlement of intellectual property disputes and expect to continue to do so in the future. However,
there are no current contingencies under which we would earn significant licensing revenue. </font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>11</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Business Segment Overview &#150; Three and Six Months Ended June 30, 2002 Compared To Three and Six Months Ended June 30, 2003</font></b></p> <p style='
margin-bottom:0pt; text-indent:4%; margin-top:8pt;'><font size=2>Three and six months ended June 30, 2002 and 2003 revenue and gross profit by market segment are shown in the following table:</font></p> <p style=' margin-bottom:0pt;
margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td colspan="4" valign=bottom > <p align=center ><b><font size=1>Three</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><br> <b><font size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2002</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td colspan="4" valign=bottom > <p align=center ><b><font size=1>Three</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><br> <b><font size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2003</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="10%" colspan="4" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><br> <b><font size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2002</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td colspan="4" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><br> <b><font size=1>Ended</font></b><font size=1>&nbsp;</font><b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b><br> <b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="4" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="4" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="4" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="4" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p ><b><font size=1>Market Segment</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>$000&#146;s</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>Percent</font></b><br> <b><font size=1>of</font></b><font size=1>&nbsp;</font><b><font size=1>Total</font></b><br> <b><font size=1>Sales</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>$000&#146;s</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>Percent</font></b><br> <b><font size=1>of</font></b><font size=1>&nbsp;</font><b><font size=1>Total</font></b><br> <b><font size=1>Sales</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>$000&#146;s</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>Percent</font></b><br> <b><font size=1>of</font></b><font size=1>&nbsp;</font><b><font size=1>Total</font></b><br> <b><font size=1>Sales</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td colspan="2" valign=bottom > <p align=center ><b><font size=1>$000&#146;s</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>Percent</font></b><br> <b><font size=1>of</font></b><font size=1>&nbsp;</font><b><font size=1>Total</font></b><br> <b><font size=1>Sales</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="2" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Business Communications:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>3,864</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>64</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>4,373</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>58</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>7,008</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>61</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>9,551</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>66</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,456</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,310</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,592</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,173</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit % of Segment Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>38</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>30</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>37</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>33</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Home Entertainment:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>452</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2> 7</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>821</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>11</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>1,350</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>12</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>970</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>7</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>204</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>382</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>608</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>449</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit % of Segment Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>45</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>47</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>45</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>46</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>E-Transactions:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>518</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>9</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>1,016</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>14</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>788</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>7</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>1,554</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>11</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>295</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>578</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>470</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>856</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit % of Segment Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>57</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>57</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>60</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>55</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>Specialty Components:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>-Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>1,193</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>20</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>1,266</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>17</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>2,290</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>20</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>2,403</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>16</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>-Gross Profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>519 </font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>856</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,071</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1,578</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>-Gross Profit % of Segment Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>44</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>68</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>47</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>66</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>All Segments:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>6,027</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>100</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>7,476</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>100</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>11,436</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>100</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=2>$</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>14,478</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>100</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2,474</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3,126</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>4,741</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>6,056</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:8.65pt;text-indent:-8.65pt;'><font size=2>- Gross Profit % of Segment Revenue</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>41</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p align=right ><font size=2>42</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>41</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>42</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:12pt;'><u><b><font size=2>Business Communications</font></b></u></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>Business communications segment revenues for the second quarter of 2003 increased 13% compared to the second quarter of 2002 and increased 36% from the six months ended June 30, 2003 compared to the six months ended
June 30, 2002. This growth is due to an increase in our U.S.-OEM revenues combined with an increase in our branded products revenues. The U.S.-OEM business has improved due to a greater number of customers and the branded business increased due to
both product line and channel expansion. Partly offsetting this growth was lower net foreign exchange hedging gains ($415,000 in the six months ended June 30, 2002 as compared to $35,000 in the same period of 2003).</font></p> <p style='
margin-bottom:0pt; margin-top:8pt;'><font size=2>Gross profit margins as a percentage of sales for the business communications segment decreased from 38% in the second quarter of 2002 to 30% in the second quarter of 2003 and decreased from 37% in
the six months ended June 30, 2002 to 33% in the six months ended June 30, 2003 due to a higher ratio of lower margin OEM sales versus branded product sales in the 2003 periods.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>12</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <u><b><font size=2>Home Entertainment</font></b></u> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Home entertainment segment revenues for the second quarter of 2003 increased by 82% compared to the
second quarter of 2002 and decreased 28% for the six months ended June 30, 2003 compared to the six months ended June 30, 2002 due to fluctuations in orders related to the Microsoft Xbox program.</font></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>Gross profit margins as a percentage of sales for the home entertainment segment increased from 45% in the second quarter of 2002 to 47% in the second quarter of 2003 and increased from 45% in the six months ended June
30, 2002 to 46% in the six months ended June 30, 2003 due to a higher ratio of low volume, higher margin product sales in the 2003 periods.</font></p> <p style=' margin-bottom:0pt; margin-top:12pt;'><u><b><font
size=2>E-Transactions</font></b></u></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>E-transactions segment revenues for the second quarter of 2003 increased 96% compared to the second quarter of 2002 and increased 97% for the six
months ended June 30, 2003 compared to the six months ended June 30, 2002 due to an increase in the number of larger volume customers, a broadened product line and a slight improvement in the general economic climate for corporate capital
expenditures for information technology products.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2> </font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Gross profit margins as a percentage of sales for
the E-transactions segment remained unchanged at 57% comparing the second quarter of 2002 to the second quarter of 2003 and decreased from 60% in the six months ended June 30, 2002 to 55% in the six months ended June 30, 2003 due to a greater
proportion of sales of higher cost, U.S.-manufactured products versus China-manufactured products in the 2003 period.</font></p> <p style=' margin-bottom:0pt; margin-top:12pt;'><u><b><font size=2>Specialty Components</font></b></u></p> <p style='
margin-bottom:0pt; margin-top:8pt;'><font size=2>Specialty components segment revenues for the second quarter of 2003 increased 6% compared to the second quarter of 2002 and increased 5% for the six months ended June 30, 2003 compared to the six
months ended June 30, 2002 due to sales to a greater number of customers.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Gross profit margins as a percentage of sales for the specialty components segment increased from 44% in
the second quarter of 2002 to 68% in the second quarter of 2003 and increased from 47% in the six months ended June 30, 2002 to 66% in the six months ended June 30, 2003 primarily due to a greater proportion of sales of higher margin computer input
applications as compared with sales of lower margin custom applications.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>13</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><b><font size=2>Results of Operations &#150; Three and Six Months Ended June 30, 2002 Compared to Three and Six Months Ended June 30, 2003</font></b></p> <p style='
margin-bottom:0pt; text-indent:4%; margin-top:8pt;'><font size=2>The following table presents our historical operating results for the periods indicated as a percentage of revenues: </font></p> <p style=' margin-bottom:0pt;
margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="11%" colspan="3" valign=bottom > <p align=center ><b><font size=1>Three</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><font size=1>&nbsp;</font><b><font size=1>Ended</font></b><br> <b><font
size=1>June</font></b><font size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=bottom > <p align=center ><b><font size=1>Six</font></b><font size=1>&nbsp;</font><b><font size=1>Months</font></b><font size=1>&nbsp;</font><b><font size=1>Ended</font></b><br> <b><font size=1>June</font></b><font
size=1>&nbsp;</font><b><font size=1>30,</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td colspan="3" valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p align=center ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>2002</font></b></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=center ><b><font size=1>2003</font></b></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Revenues</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>100</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>100</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>100</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>100</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Gross profit</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>41</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>42</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>42</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>42</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Operating expenses:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Product development and research</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>15</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>11</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>15</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>12</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:17.3pt;text-indent:-8.65pt;'><font size=2>Selling, general and administrative</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>31</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>28</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>33</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>28</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:25.9pt;text-indent:-8.65pt;'><font size=2>Total operating expenses</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>46</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>39</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>48</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>40</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Operating income (loss)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2> (5</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>3</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>(6</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=2>)</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>2</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Other income (loss)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2> (1</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>)</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>&#151;</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>1</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom style='background:#CCEEFF; '> <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Income tax expense (benefit)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>1</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="2%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td>
<td width="4%" valign=bottom style='background:#CCEEFF;'> <p align=right ><font size=2>&#151;</font></p> </td>
<td width="1%" valign=bottom style='background:#CCEEFF;'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td valign=bottom > <p style='margin-left:0.12in;text-indent:-0.12in;' ><font size=2>Net income (loss)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2> (6)</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="5%" valign=bottom > <p align=right ><font size=2>2</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>(6</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=2>)%</font></p> </td>
<td width="4%" valign=bottom > <p align=right ><font size=2>3</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=2>%</font></p> </td> </tr>
<tr >
<td valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="2%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Consolidated revenues increased 24% from $6.0&nbsp;million in the second quarter of 2002 to
$7.5&nbsp;million in the second quarter of 2003 and increased 27% from $11.4 million in the six months ended June 30, 2002 to $14.5 million in the six months ended June 30, 2003 due to the reasons described in the business segment analysis
above.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Gross profit as a percentage of sales increased from 41% in the three months ended June 30, 2002 to 42% in the three months ended June 30, 2003 and remained unchanged at
42% in comparing the six months ended June 30, 2002 to June 30, 2003. Offsetting changes in the revenue mix as described in the business segment analysis above resulted in the consistent margin rate. Additionally, $330,000 and $531,000 in inventory
write downs were recorded in the three and six month periods ended June 30, 2003, respectively, in accordance with our inventory reserve methodology described in the </font><i><font size=2>Critical Accounting Policies</font></i><font size=2>
</font><i><font size=2>- Inventory Reserve </font></i><font size=2>section of this report.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Product development and research expense decreased 6% from $868,000 in the three months
ended June 30, 2002 to $817,000 in the three months ended June 30, 2003 and remained unchanged at $1.7 million comparing the six months ended June 30, 2002 to the six months ended June 30, 2003. The lower costs in second quarter 2003 are due to the
timing of outside product development costs and to a greater amount of engineering costs billed to customers than in the comparative period.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Selling, general and administrative
expense (SG&amp;A) increased 12% from $1.9&nbsp;million in the three months ended June 30, 2002 to $2.1 million in the three months ended June 30 2003, and increased 9% from $3.7 million in the six months ended June 30, 2002 to $4.1 million in the
six months ended June 30, 2003. The dollar increase is the result of the marketing support related to the new Business Communication &#150; Branded products and the percentage decrease is the result of leveraging of fixed SG&amp;A over a larger
sales base.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Other income in the first quarter of 2003 included a $180,000 gain associated with the settlement of a lawsuit with one of our former component suppliers in
Japan.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Due to net operating loss (NOL) carryforwards, no tax provision was necessary related to our U.S. and Japanese operations. However, our Hong Kong logistics operation did
record an income tax provision in the 2003 periods presented.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>14</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Due to sales growth, improved gross margins, successful cost containment measures and other income described above, net income improved to $181,000 for the
second quarter of 2003 as compared to a net loss of $333,000 in the second quarter of 2002 and improved to $421,000 in the six months ended 2003 as compared to a net loss of $732,000 in the six months ended 2002. </font></p> <p style='
margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Liquidity and Capital Resources</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Working capital at June&nbsp;30, 2003 was $16.9&nbsp;million versus $16.2&nbsp;million at
the end of 2002. The increase is a result primarily of the improvement in net income for the first half of 2003.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Operations used $1.8 million in cash in the first half of 2003
primarily due to investments in working capital designed to facilitate our further penetration into the business communications-branded channel. This compares to cash generated by operations of $73,000 in the first half of 2002.</font></p> <p
style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>We spent $126,000 in the first half of 2003 and $251,000 in the first half of 2002 to purchase additional manufacturing equipment and computer equipment related to our internal computer
network. </font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>We made payments on long-term debt of $448,000 in the first half of 2003 and $547,000 in the first half of 2002. Net proceeds from the exercise of stock options were
$211,000 in the first half of 2003 and $23,000 in the first half of 2002.</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>We believe we can fund operations for at least the next 12 months from our current cash and cash
equivalents balance ($5.8 million as of June 30, 2003). In July 2003, we received net proceeds of $1.8 million for the exercise of employee stock options. Additionally, in July 2003, we renegotiated our U.S. bank line of credit (unused at July 31,
2003) to provide $3 million in availability and to eliminate the previous requirement of cash and investment collateral. Negotiated lines of credit in Japan and the further exercise of employee stock options are also potential sources of capital
available to us. We require liquidity to fund capital expenditures and for working capital and other general corporate purposes.</font></p> <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Disclosure Regarding Forward-Looking
Statements</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties and which are intended to be covered by the safe harbors created thereby. These statements can be identified by the fact that they do not relate
strictly to historical information and may include the words &#147;expects&#148;, &#147;believes&#148;, &#147;anticipates&#148;, &#147;plans&#148;, &#147;may&#148;, &#147;will&#148;, &#147;intends&#148;, &#147;estimates&#148;, &#147;continue&#148;
or other similar expressions. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those currently anticipated. These risks and uncertainties include, but are not
limited to, items discussed under the heading &#147;Forward-looking Statements&#148;, &#147;Historical Factors Affecting Financial Performance&#148; and &#147;Business Segment Overview &#150; three and six months ended June 30, 2002 compared to
three and six months ended June 30, 2003.&#148; Forward-looking statements speak only as of the date made. We undertake no obligation to publicly release or update forward-looking statements, whether as a result of new information, future events or
otherwise.</font></p> <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font size=2>Recent Accounting Pronouncements </font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In November 2002, the Emerging Issues Task Force
(&#147;EITF&#148;) issued Issue No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. This issue addresses determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and
how arrangement consideration should be measured and allocated to the separate units of accounting. EITF Issue No. 00-21 will be effective for revenue arrangements entered into in fiscal quarters beginning after June 15, 2003, or the Company may
elect to report the change in accounting as a cumulative-effect adjustment. We do not expect the adoption of this issue will have a material impact on our operating revenues or financial position.</font></p> <br><p
style='margin-bottom:0pt;text-align:center'><font
size=2>15</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or
an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We do not expect
the adoption of this statement to have a material impact on our financial condition or results of operations.</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td> </tr>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top"><b><font size=2>Item 3.</font></b></td>
<td valign="top"><b><font size=2>Quantitative and Qualitative Disclosures about Market Risk</font></b></td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>We use six-month foreign exchange forward contracts to hedge
certain revenue exposures against future movements in foreign exchange rates. Gains and losses on the forward contracts are largely offset by gains and losses on the underlying exposure and consequently we would not expect a sudden or significant
change in foreign exchange rates to have a material impact on future net income or cash flows. However, a foreign exchange movement with a duration of over six months could materially impact financial performance.</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td> </tr>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top"><b><font size=2>Item 4.</font></b></td>
<td valign="top"><b><font size=2>Controls and Procedures</font></b></td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>We carried out an evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer along with our Chief Financial Officer, on the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 as of the end of the period covered by this
Quarterly Report on Form 10-Q. Based upon that evaluation, each of our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material
information required to be included in the Company&#146;s SEC reports. In addition, there have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date we
carried out our evaluation.</font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>16</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt;text-align:center; margin-top:16pt;'><b><font size=2>PART II &#150; OTHER INFORMATION</font></b></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td> </tr>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top"><b><font size=2>Item 4.</font></b></td>
<td valign="top"><b><font size=2>Submission of Matters to a Vote of Security Holders</font></b></td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>On June 12, 2003 at our Annual Meeting of Stockholders, the holders of
our outstanding common stock took the actions described below. At April 11, 2003, the record date, 9,778,968 shares of common stock were outstanding and eligible to vote at the Annual Meeting of Stockholders.</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>1.</font></td>
<td valign="top"><font size=2>By the vote indicated below, the stockholders re-elected John Buckett and Merritt M. Lutz to the Company&#146;s Board of Directors to serve for a three-year term:</font></td></tr></table> <p style=' margin-bottom:0pt;
margin-left:8%; margin-top:8pt;'><font size=2>For John Buckett:</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table border="0" cellspacing=0 cellpadding=0 style='margin-left:51.85pt; border-collapse:collapse'>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>9,110,095</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares in favor</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares against</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>28,128</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares withheld</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <p style=' margin-bottom:0pt; margin-left:8%; margin-top:8pt;'><font size=2>For Merritt M. Lutze:</font></p> <p style=' margin-bottom:0pt;
margin-top:0pt;'>&nbsp;</p>
<table border="0" cellspacing=0 cellpadding=0 style='margin-left:51.85pt; border-collapse:collapse'>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>9,110,095</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares in favor</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>0</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares against</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="6%" valign=bottom > <p align=right ><font size=2>28,128</font></p> </td>
<td width="2%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="50%" valign=bottom > <p ><font size=2>Shares withheld</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Other directors whose term of office as a director continued after the meeting were George Gu, E.
Michael Thoben, III and Eugene F. Hovanec.</font></p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td> </tr>
<tr>
<td width="0%" ></td>
<td width="8.33%" nowrap valign="top"><b><font size=2>Item 6.</font></b></td>
<td valign="top"><b><font size=2>Exhibits and Reports on Form 8-K</font></b></td> </tr> </table> <p style=' margin-bottom:0pt; margin-left:4%; margin-top:6pt;'><font size=2>(a)</font><font
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Exhibits</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>3.1</font></td>
<td valign="top"><font size=2>Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant&#146;s Annual Report on Form 10-K for the year ended December 31,&nbsp;2000).</font></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>3.2</font></td>
<td valign="top"><font size=2>Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant&#146;s Annual Report on Form 10-K for the year ended December 31,&nbsp;2000).</font></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>31.1</font></td>
<td valign="top"><font size=2>Certification of Chief Executive Officer of Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>31.2</font></td>
<td valign="top"><font size=2>Certification of Chief Financial Officer of Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>32.1</font></td>
<td valign="top"><font size=2>Certification of Chief Executive Officer of Registrant Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></td></tr></table>
<table width="100%" cellspacing=0 cellpadding=0>
<tr>
<td width="4%" ></td>
<td width="4%" nowrap valign="top"><font size=2>32.2</font></td>
<td valign="top"><font size=2>Certification of Chief Financial Officer of Registrant Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></td></tr></table> <br> <p style=' margin-bottom:0pt; margin-left:4%; margin-top:6pt;'><font
size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Reports on Form 8-K</font></p> <p style=' margin-bottom:0pt; margin-left:8%; margin-top:8pt;'><font size=2>Subsequent to the quarter end, on July 23,
2003, we filed a report on Form 8-K, which furnished (not filed) under Items 9 and 7 the press release entitled &#147;Interlink Electronics Announces Second Quarter 2003 Financial Results&#148; relating to the results of our second fiscal quarter
ended June 30, 2003. </font></p> <br><p style='margin-bottom:0pt;text-align:center'><font
size=2>17</font></p>
<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt;text-align:center; margin-top:16pt;'><b><font SIZE=2>SIGNATURES</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='margin-left:.4pt;border-collapse: collapse'>
<tr >
<td width="29%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><b><font SIZE=2>INTERLINK</font></b><font size=2>&nbsp;</font><b><font SIZE=2>ELECTRONICS,</font></b><font size=2>&nbsp;</font><b><font SIZE=2>INC.</font></b></p> </td> </tr>
<tr >
<td width="29%" valign=bottom > <p ><br> <font size=2>DATE: August 14, 2003</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><br> <font size=2>/s/ P</font><font SIZE=1>AUL </font><font SIZE=2>D</font><font size=1>. </font><font SIZE=2>M</font><font SIZE=1>EYER</font></p> </td> </tr>
<tr >
<td width="29%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td> </tr>
<tr >
<td width="29%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p ><b><font size=1>Paul D. Meyer</font></b><br> <b><font size=1>Chief Financial Officer</font></b></p> </td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p> <br> <p
style='margin-bottom:0pt;text-align:center'><font size="2">18</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p style=' margin-bottom:0pt; margin-top:12pt;'><b><font SIZE=2>EXHIBIT INDEX</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>The following exhibits are filed with or incorporated by
reference into this Quarterly Report:</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'>&nbsp;</p>
<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
<tr >
<td width="8%" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><b><font size=1>Exhibit</font></b><br> <u><b><font size=1>Number</font></b></u><b><u></u></b></p> </td>
<td valign=bottom style='padding:0in 5.4pt 0in 5.4pt'> <p ><u><b><font size=1>Description</font></b></u><b><u></u></b></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>3.1</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant&#146;s Annual Report on Form 10-K for the year ended December
31,&nbsp;2000).</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>3.2</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant&#146;s Annual Report on Form 10-K for the year ended December 31,&nbsp;2000).</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>31.1</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Certification of Chief Executive Officer of Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>31.2</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Certification of Chief Financial Officer of Registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>32.1</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Certification of Chief Executive Officer of Registrant Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p align=center ><font size=2>32.2</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt'> <p ><font size=2>Certification of Chief Financial Officer of Registrant Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr>
<tr style='height:.05in'>
<td width="8%" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p align=center ><font size=1>&nbsp;</font></p> </td>
<td valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.05in'> <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <br> <p style='margin-bottom:0pt;text-align:center'><font size=2>19</font></p>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>dex311.htm
<DESCRIPTION>SECTION 302 CEO CERTIFICATION - E. MICHAEL THOBEN, III
<TEXT>
<HTML><HEAD>
<TITLE>Section 302 CEO Certification - E. Michael Thoben, III</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p style=' margin-bottom:0pt;text-align:right; margin-top:8pt;'><b><font SIZE=2>EXHIBIT 31.1</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>I, E. Michael Thoben, III, certify
that:</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>1.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>I have reviewed this quarterly report on Form 10-Q of Interlink
Electronics, Inc.;</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>2.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>3.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</font></p> <p style='
margin-bottom:0pt; margin-top:6pt;'><font size=2>4.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</font></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>a)</font><font
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</font></p> <p style=' margin-bottom:0pt;
text-indent:4%; margin-top:6pt;'><font size=2>b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p> <p style=' margin-bottom:0pt; text-indent:4%;
margin-top:6pt;'><font size=2>c)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>disclosed in this quarterly report any change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal
control over financial reporting; and</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>5.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The registrant&#146;s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors (or persons performing the equivalent
functions):</font></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>a)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>all significant deficiencies and material
weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</font></p> <p style='
margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='margin-left:.4pt;border-collapse: collapse'>
<tr >
<td width="29%" valign=bottom > <p ><font size=2>Date: August 14, 2003</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=bottom > <p ><br > <br > </p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><br> <font size=2>/s/ E</font><font size=1>. </font><font SIZE=2>M</font><font SIZE=1>ICHAEL </font><font SIZE=2>T</font><font SIZE=1>HOBEN</font><font size=2>,</font><font size=1> </font><font
SIZE=2>III</font></p> </td> </tr>
<tr >
<td width="29%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td> </tr>
<tr >
<td width="29%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p ><b><font size=1>E. Michael Thoben, III</font></b><br> <b><font size=1>Chairman, President and Chief Executive Officer</font></b></p> </td> </tr> </table> <br><p style='margin-bottom:0pt;text-align:left'><font
size=2>&nbsp;</font></p>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>dex312.htm
<DESCRIPTION>SECTION 302 CFO CERTIFICATION - PAUL D. MEYER
<TEXT>
<HTML><HEAD>
<TITLE>Section 302 CFO Certification - Paul D. Meyer</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p style=' margin-bottom:0pt;text-align:right; margin-top:8pt;'><b><font SIZE=2>EXHIBIT 31.2</font></b></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>I, Paul D. Meyer, certify that:</font></p> <p
style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>1.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>I have reviewed this quarterly report on Form 10-Q of Interlink Electronics,
Inc.;</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>2.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>3.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</font></p> <p style='
margin-bottom:0pt; margin-top:6pt;'><font size=2>4.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</font></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>a)</font><font
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</font></p> <p style=' margin-bottom:0pt;
text-indent:4%; margin-top:6pt;'><font size=2>b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p> <p style=' margin-bottom:0pt; text-indent:4%;
margin-top:6pt;'><font size=2>c)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>disclosed in this quarterly report any change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal
control over financial reporting; and</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>5.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The registrant&#146;s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors (or persons performing the equivalent
functions):</font></p> <p style=' margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>a)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>all significant deficiencies and material
weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</font></p> <p style='
margin-bottom:0pt; text-indent:4%; margin-top:6pt;'><font size=2>b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='margin-left:.4pt;border-collapse: collapse'>
<tr >
<td width="29%" valign=bottom > <p ><font size=2>Date: August 14, 2003</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=bottom > <p ><br > <br > </p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><br> <font size=2>/s/ P</font><font SIZE=1>AUL </font><font SIZE=2>D</font><font size=1>. </font><font SIZE=2>M</font><font SIZE=1>EYER</font></p> </td> </tr>
<tr >
<td width="29%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td> </tr>
<tr >
<td width="29%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p ><b><font size=1>Paul D. Meyer</font></b><br> <b><font size=1>Chief Financial Officer</font></b></p> </td> </tr> </table> <br><p style='margin-bottom:0pt;text-align:left'><font size=2>&nbsp;</font></p>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>dex321.htm
<DESCRIPTION>SECTION 906 CEO CERTIFICATION- E. MICHAEL THOBEN, III
<TEXT>
<HTML><HEAD>
<TITLE>Section 906 CEO Certification- E. Michael Thoben, III</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p style=' margin-bottom:0pt;text-align:right; margin-top:8pt;'><b><font size=2>Exhibit 32.1</font></b></p> <p style=' margin-bottom:0pt;text-align:center; margin-top:16pt;'><b><font SIZE=2>CERTIFICATION PURSUANT
TO</font></b><br><b><font size=2>18 U.S.C. SECTION 1350</font></b><br><b><font SIZE=2>AS ADOPTED PURSUANT TO</font></b><br><b><font SIZE=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>In connection with the Quarterly Report of Interlink Electronics, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarterly period ended June&nbsp;30, 2003 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, E. Michael Thoben, III, Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. &sect; 1350, as adopted pursuant to &sect; 906 of the Sarbanes-Oxley Act of 2002, that,
to the best of my knowledge:</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>(1)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>(2)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The information contained in
the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='margin-left:.4pt;border-collapse: collapse'>
<tr >
<td width="29%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=bottom > <p ><br> <font size=2>/s/ E</font><font size=1>. </font><font SIZE=2>M</font><font SIZE=1>ICHAEL </font><font SIZE=2>T</font><font SIZE=1>HOBEN</font><font size=2>,</font><font size=1> </font><font
SIZE=2>III</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><br > <br > </p> </td> </tr>
<tr >
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=top > <p ><b><font size=1>E. Michael Thoben, III</font></b><br> <b><font size=1>Chairman</font></b><font size=1>&nbsp;</font><b><font size=1>President</font></b><font size=1>&nbsp;</font><b><font size=1>and</font></b><font
size=1>&nbsp;</font><b><font size=1>Chief</font></b><font size=1>&nbsp;</font><b><font size=1>Executive</font></b><font size=1>&nbsp;</font><b><font size=1>Officer</font></b><br> <b><font size=1>August 14, 2003</font></b></p> </td>
<td width="1%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>A signed original of this
written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been
provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.</font></p> <br><p style='margin-bottom:0pt;text-align:left'><font size=2>&nbsp;</font></p>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>dex322.htm
<DESCRIPTION>SECTION 906 CFO CERTIFICATION - PAUL D. MEYER
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<TITLE>Section 906 CFO Certification - Paul D. Meyer</TITLE>
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  <p style=' margin-bottom:0pt;text-align:right; margin-top:8pt;'><b><font size=2>Exhibit 32.2</font></b></p> <p style=' margin-bottom:0pt;text-align:center; margin-top:16pt;'><b><font SIZE=2>CERTIFICATION PURSUANT
TO</font></b><br><b><font size=2>18 U.S.C. SECTION 1350</font></b><br><b><font SIZE=2>AS ADOPTED PURSUANT TO</font></b><br><b><font SIZE=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p> <p style=' margin-bottom:0pt;
margin-top:8pt;'><font size=2>In connection with the Quarterly Report of Interlink Electronics, Inc. (the &#147;Company&#148;) on Form 10-Q for the quarterly period ended June&nbsp;30, 2003 as filed with the Securities and Exchange Commission on the
date hereof (the &#147;Report&#148;), I, Paul D. Meyer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. &sect; 1350, as adopted pursuant to &sect; 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my
knowledge:</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>(1)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and</font></p> <p style=' margin-bottom:0pt; margin-top:6pt;'><font size=2>(2)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The information contained in the Report fairly
presents, in all material respects, the financial condition and results of operations of the Company.</font></p> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p>
<table align=center width="65%" border="0" cellspacing=0 cellpadding=0 style='margin-left:.4pt;border-collapse: collapse'>
<tr >
<td width="29%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=bottom > <p ><br> <font size=2>/s/ P</font><font SIZE=1>AUL </font><font SIZE=2>D</font><font size=1>. </font><font SIZE=2>M</font><font SIZE=1>EYER</font></p> </td>
<td width="1%" valign=bottom > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=bottom > <p ><font size=2>&nbsp;</font></p> </td>
<td width="26%" valign=bottom > <p ><br > <br > </p> </td> </tr>
<tr >
<td valign=top > <hr noshade width="100%" color="black" size="1"> </td>
<td width="1%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p><font size=1>&nbsp;</font></p> </td> </tr>
<tr >
<td width="29%" valign=top > <p ><b><font size=1>Paul D. Meyer</font></b><br> <b><font size=1>Chief Financial Officer</font></b><br> <b><font size=1>August 14, 2003</font></b></p> </td>
<td width="1%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="3%" valign=top > <p ><font size=1>&nbsp;</font></p> </td>
<td width="26%" valign=top > <p ><font size=1>&nbsp;</font></p> </td> </tr> </table> <p style=' margin-bottom:0pt; margin-top:0pt;'><font size=2>&nbsp;</font></p> <p style=' margin-bottom:0pt; margin-top:8pt;'><font size=2>A signed original of this
written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been
provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.</font></p> <br><p style='margin-bottom:0pt;text-align:left'><font size=2>&nbsp;</font></p>
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