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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001003297-04-000044.txt : 20040203
<SEC-HEADER>0001003297-04-000044.hdr.sgml : 20040203
<ACCEPTANCE-DATETIME>20040203161741
ACCESSION NUMBER:		0001003297-04-000044
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040203
ITEM INFORMATION:		
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20040203

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRO DEX INC
		CENTRAL INDEX KEY:			0000788920
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MEDICAL, DENTAL & HOSPITAL EQUIPMENT & SUPPLIES [5047]
		IRS NUMBER:				841261240
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14942
		FILM NUMBER:		04563241

	BUSINESS ADDRESS:	
		STREET 1:		MICRO MOTORS, INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
		BUSINESS PHONE:		714-241-4411

	MAIL ADDRESS:	
		STREET 1:		MICRO MOTORS INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>pdex8k1.htm
<TEXT>
<html>

<head>


<title>Pro-Dex 8K by E-Services, LLC, edgar2.com</title>



</head>

<body lang=EN-US link=blue vlink=purple>

<p align="center">&nbsp;</p>

<p align="center">&nbsp;</p>

<p align="center"><b>UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</b></p>

<p align=center style='text-align:center'><b>&nbsp;Washington,

 D.C.&nbsp; 20549</b></p>





<p align=center style='text-align:center'><b>FORM 8-K</b></p>

<p><b>&nbsp;</b></p>

<p align="center"><b>CURRENT REPORT</b></p>



<p align=center style='text-align:center'>Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</p>



<p align="center"><b>February 3, 2004<br>
</b>Date of Report <br>
(Date of earliest event reported)</p>



<p align=center style='text-align:center'><b>PRO-DEX, INC.<br>
</b>(Exact name of registrant as specified in its charter)</p>



<p align="center"><b>COLORADO<br>
</b>(State or other jurisdiction of incorporation)</p>





<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="761" id="AutoNumber1">
  <tr>
    <td width="356" align="center"> <b>0-14942</b></td>
    <td width="405" align="center">&nbsp;<b>84-1261240</b></td>
  </tr>
  <tr>
    <td width="356" align="center">(Commission File
No.)</td>
    <td width="405" align="center">(IRS Employer Identification
Number)</td>
  </tr>
</table>

<p align=center style='text-align:center'><b>151 East Columbine Avenue<br>
Santa Ana,  California 92707<br>
</b>(Address of Principal Executive Offices)</p>



<p align=center style='text-align:center'><b>(949) 241-4411<br>
</b>(Registrant's Telephone Number, Including Area Code)</p>



<p align=center style='text-align:center'>&nbsp;</p>



<p align=center style='text-align:center'>&nbsp;</p>



<p align=center style='text-align:center'>&nbsp;</p>



<p align=center style='text-align:center'>&nbsp;</p>

<hr color="#000080">

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



<p><b><u>Item 7.</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Statements and
Exhibits</u></b></p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.</p>



<p align=left style='margin-left:93.0pt;text-align:
left;text-indent:-21.0pt'>99.1&nbsp;&nbsp;&nbsp;&nbsp; Press Release dated February 3, 2004.</p>

<p style='margin-top:12.0pt'><b><u>Item
12.</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Results of Operations
and Financial Condition</u></b></p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">The
information in this Form 8-K and the Exhibits attached hereto shall not be
deemed &quot;filed&quot; for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the &quot;Exchange Act&quot;), nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing. </p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">On February
3, 2004, Pro-Dex, Inc. issued a press release announcing its financial
performance for the period ended December 31, 2003.&nbsp; On that same date,
Pro-Dex, Inc. conducted a conference call concerning its performance for the
period ended December 31, 2003.&nbsp; A copy of the press release is attached to
this Form&nbsp;8-K as Exhibit&nbsp;99.1.</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in' align="justify">&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;' align="center">2</p>

<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;' align="center">&nbsp;</p>

<hr color="#000080"><br clear=all
style='page-break-before:always'>


<p>&nbsp;</p>
<p>&nbsp;</p>


<p align=center style='text-align:center'><b>SIGNATURES</b></p>





<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 hereunto duly authorized.</p>





<p>Date:&nbsp; February 3, 2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>PRO-DEX, Inc.</b></p>





<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="761" id="AutoNumber2">
  <tr>
    <td width="351">





<p align="right">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

    </td>
    <td width="410">





<p style='margin-left:0in'> <u>/s/&nbsp;  Patrick Johnson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>

    </td>
  </tr>
  <tr>
    <td width="351">&nbsp;</td>
    <td width="410">Patrick Johnson</td>
  </tr>
  <tr>
    <td width="351">&nbsp;</td>
    <td width="410">Chief Executive Officer</td>
  </tr>
</table>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p align="center">3</p>

<p align="center">&nbsp;</p>

<hr color="#000080"><br clear=all
style='page-break-before:always'>


<p align=center style='text-align:center'><b>INDEX TO EXHIBITS</b></p>

<p><b>&nbsp;</b></p>

<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b></p>

<p>&nbsp;&nbsp;  <b>Exhibit<br>
<u>&nbsp; Number&nbsp; </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Description&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>
</b></p>



<p style='margin-left:1.0in;text-indent:-.75in'>99.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Press
Release dated February 3, 2004.</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p style='margin-left:1.0in;text-indent:-.75in'>&nbsp;</p>



<p align="center">4</p>



<p align="center">&nbsp;</p>



</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>ex99-11.htm
<TEXT>
<html>

<head>


<title>Pro-Dex Reports Financial Results for Fiscal 2001; </title>



</head>

<body lang=EN-US link=blue vlink=purple>

<p style='margin-left:0in;line-height:normal'><img width=101
height=41 src="image001.jpg"><p style='text-align:justify;line-height:normal'><b>&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="761" id="AutoNumber1">
  <tr>
    <td width="471"><p align="right">Contact:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
    </td>
    <td width="290">Patrick Johnson, President &amp; CEO</td>
  </tr>
  <tr>
    <td width="471">
    <p align="right"></td>
    <td width="290">(714) 241-4411</td>
  </tr>
  <tr>
    <td width="471">

<p style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

    </td>
    <td width="290">&nbsp;</td>
  </tr>
  <tr>
    <td width="471">

<p style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

    </td>
    <td width="290">&nbsp;</td>
  </tr>
  <tr>
    <td width="471">

<p style='text-align:justify'><b><i>For
Immediate Release</i></b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  </p>

    </td>
    <td width="290">Jim White , Investor Relations</td>
  </tr>
  <tr>
    <td width="471">

<p style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  </p>

    </td>
    <td width="290">Kehoe, White &amp; Co., Inc.</td>
  </tr>
  <tr>
    <td width="471">

<p style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

    </td>
    <td width="290">(562) 437-0655</td>
  </tr>
</table>

<p>&nbsp;</p>

<p align="center"><b>PRO-DEX, INC. ANNOUNCES CONTINUED SIGNIFICANT
IMPROVEMENT IN SECOND QUARTER FINANCIAL RESULTS</b></p>



<p align="center"><b>SALES INCREASE 29% FROM PRIOR YEAR AND 5% FROM PRIOR QUARTER; YEAR TO DATE
EARNINGS INCREASE $457,000 FROM PRIOR YEAR AND 19% FROM PREVIOUS QUARTER</b></p>





<p align="center">&nbsp;</p>





<p style='text-align:justify;text-indent:.5in'><b>SANTA ANA, CA,</b>
February 3, 2004 - PRO-DEX, INC. (NASDAQ: PDEX) today announced financial
results for the quarter ended December 31, 2003.&nbsp; The Company reported
net income for the three months ended December 31, 2003 of $230,000 or $0.03
per share on a basic and $0.02 per share on a diluted basis, as compared to a
net (loss) of ($29,000) or ($0.00) per share on a basic and ($0.00) per share
on a diluted basis, for the three months ended December 31, 2002.&nbsp; This
represents an increase of $259,000 over the previous year and a sequential
increase of $37,000 or 19% over the previous quarter, producing the sixth
consecutive increase in quarterly net profit.&nbsp; </p>



<p style='text-align:justify;text-indent:.5in'>The Company also
reported net income for the six months ended December 31, 2003 of $422,000 or
$0.05 per share on a basic and $0.05 per share on a diluted basis, as compared
to a net (loss) of ($35,000) or ($0.00) per share on a basic and ($0.00) per
share on a diluted basis, for the six months ended December 31, 2002.&nbsp; This
represents an increase of $457,000 over the previous year.</p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>Commenting on the Company's financial
performance, Pro-Dex's President and CEO, Patrick Johnson said, &quot;We couldn't be
more pleased with the operational results of the Company during the second
quarter.&nbsp; Sales were up over the previous year and the previous quarter, gross
margin improved in total dollars and as a percent of sales both sequentially
and year over year.&nbsp; In addition, operating expenses remained flat compared to
last year other than a slight increase in our selling expenses, which you would
expect given a near 30% increase in sales.&nbsp; The only area where we did not see
significant improvement was in corporate expenses, which were down compared to
last year, but higher on a sequential basis.&nbsp; This is somewhat disappointing
given our expectations coming into the quarter, but expenses related to the
restructuring of our Board of Directors and the switch to new auditors exceeded
our original projections.&nbsp; Nonetheless, we improved our bottom-line
profitability for the second quarter and look forward to lower corporate
expenses in the third quarter.&quot;&nbsp; For the three and six months ended
December 31, 2003, the Company's corporate expenses were $269,000 and 470,000
respectively, compared to $316,000 and $541,000 for the same periods in the
prior year.&nbsp; </p>







<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>







<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>







<hr color="#000080">

<p>

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



</p>







<p style='text-align:justify;text-indent:.5in'>Consolidated net
sales increased $822,000 or 29% to $3,704,000 for the three months ended
December 31, 2003, compared to the three months ended December 31, 2002.&nbsp; On a
sequential basis, consolidated sales increased $176,000 or 5.0% for the three
months ended December 31, 2003 compared to the first quarter of fiscal 2004.&nbsp; This represents the Company's ninth consecutive quarter of
increased sales.&nbsp; For the six months ended December 31, 2003, consolidated net
sales increased 1,633,000 or 29% compared to the same period in the prior year.</p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>At the Company's Micro Motors subsidiary, sales increased $825,000 or 37%
to $3,054,000 for the three months ended December 31, 2003, compared to the
same period of the prior year.&nbsp; This also represents a sequential
quarter-to-quarter increase in sales of $247,000 or 8.8%.&nbsp; &quot;Micro Motors
reached a major organization milestone during the second quarter, shipping more
than $1,000,000 of product per month,&quot; stated Mr. Johnson.&nbsp; &quot;By combining the
manufacturing efforts of both Micro Motors and Oregon Micro Systems, Pro-Dex's
Portland-based subsidiary, we were able produce significant shipments of
Healozone devices for distribution in Europe.&quot;&nbsp; Revenue from the Company's
Oregon Micro Systems (OMS) subsidiary remained stable at $650,000 for the three
months ended December 31, 2003 compared to $653,000 in the previous year.&nbsp; </p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>As reported in January of 2003, Micro Motors renegotiated its exclusive
manufacturing agreement with Curozone USA, agreeing to a long-term royalty
agreement in exchange for its exclusive manufacturing rights.&nbsp; Curozone USA is
the distributor of the innovative Healozone, a device that painlessly treat
dental caries with the delivery of ozone gas, eliminating the traditional
&quot;drill and fill&quot; treatment.&nbsp; On February 23<sup>rd</sup> of this year, in
conjunction with the National Manufacturing Week in Chicago, Micro Motors will
be receiving one of only three Gold Medal Awards from Product Design &amp;
Development Magazine for its part in developing the Healozone.&nbsp; The Company
expects royalty payments from Healozone sales to commence during the third
quarter of this fiscal year.</p>



<p style='text-align:justify;text-indent:.5in'>The Company's
consolidated gross profit for the three months ended December 31, 2003
increased 36% or $449,000 compared to the same three months in the previous
year.&nbsp; For the six months ended December 31, 2003, consolidated gross profit
increase $839,000 or 35% compared to the same period in the prior year.&nbsp; Gross
profit as a percentage of sales increased to 44.9% for the three months ended
December 31, 2003 compared to 43.7% for the three months ended December 31,
2002 and compared to a gross margin percentage of 43.7% for the previous
quarter. &quot;As we indicated at the beginning of the fiscal year, one key area of
focus this year was to improve our operational efficiencies and the resulting
gross profitability,&quot; noted Mr. Johnson.&nbsp; &quot;I'm happy to report that the efforts
we made in restructuring our Micro Motors operations have made an immediate
favorable impact, increasing gross profit sequentially quarter over quarter
from 36.1% to 38.3%.&nbsp; It should also be noted that the sharing of gross profit
dollars from Healozone sales by Micro Motors and OMS is dilutive to both
operating subsidiary's gross margin as a percent of sales.&quot;&nbsp; </p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>Operating expenses increased 3.7% to
$1,314,000 for the three months ended December 31, 2003 from $1,266,000 for the
three months ended December 31, 2002.&nbsp; For the six months ended December 31,
2003, Operating expense increased $102,000 or 4.2% compared to the same six
months in the prior year.&nbsp; As previously noted, this increase was primarily due
to sales commissions paid on increased branded product sales at the Company's
Micro Motor's subsidiary and increased corporate expenses.&nbsp; </p>









<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>









<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>









<hr color="#000080">

<p>

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



</p>









<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>Addressing the Company's on-going operations,
Mr. Johnson noted, &quot;For the last year and a half, we've been concentrating on
creating a stable operational foundation for the Company.&nbsp; We've increased
sales, increased gross profit, controlled our expenses, produced incrementally
increasing earnings and strengthened our balance sheet.&nbsp; In the second quarter,
we had strong positive cash flow, which we used to further pay down the little
debt that we have and started to invest in the development of new proprietary
technologies.&quot;&nbsp; Commenting on the Company's near term prospects, Mr. Johnson
said, &quot;As we enter the second half of this fiscal year, I believe that Pro-Dex
is embarking on a new phase of growth.&nbsp; Having stabilized the operations, we
are now turning our attention to more innovative ways to expand the Company and
enhance what we believe is a very successful strategic value proposition.&nbsp;
Micro Motors has begun development on a proprietary therapeutic technology that
we believe can be rapidly deployed into the medical device industry.&nbsp; Likewise,
Oregon Micro System continues to develop its new line of MAX multi axis motion
controllers, having received the first large order for the PCI version of this
product during the second quarter, only 9 months after it was introduced.&nbsp; We
expect to have the first VME version of the product in beta test during the
third quarter of this fiscal year.&nbsp; There's a lot happening, we're looking
beyond the horizon and we are excited at what we see.&quot;</p>



<p style='text-align:justify;text-indent:.5in'>Investors and
all others are invited to listen to a conference call discussing the first
quarter and fiscal 2004 outlook, today at 4:30 p.m. Eastern Time. The call will
be broadcast over the Internet at <font color="#0000FF">www.pro-dex.com</font>.&nbsp;
An online replay will be available for 30 days.&nbsp; Additionally, a telephone
replay will be available two hours after the call for 48-hours by dialing (800)
642-1687 for domestic callers and (706) 645-9291 for international callers;
conference ID# 5218272.</p>



<p style='text-align:justify;text-indent:.5in'>Pro-Dex, Inc., is a California-based
holding company with the following wholly-owned operating subsidiaries: Micro
Motors, Inc., located in Santa Ana, California, manufactures miniature
electric, pneumatic and battery powered rotary drive systems for use in the
high tech medical, dental and industrial industries; and Oregon Micro Systems,
Inc., located in Beaverton, Oregon, manufactures motion control products used
in factory automation and the semiconductor industries. </p>



<p style='text-align:justify;text-indent:.5in'>For more information, visit the
Company's website at <font color="#0000FF"> <u>www.pro-dex.com</u></font>. </p>



<p>Statements
herein concerning the Company's plans, growth and strategies may include
'forward-looking statements' within the context of the federal securities laws.
Statements regarding the Company's future events, developments and future
performance, as well as management's expectations, beliefs, plans, estimates or
projections relating to the future, are forward-looking statements within the
meaning of these laws. The Company's actual results may differ materially from
those suggested as a result of various factors. Interested parties should refer
to the disclosure concerning the operational and business concerns of the
Company set forth in the Company's filings with the Securities and Exchange
Commission.</p>



<p align=center style='text-align:center'>(tables follow)</p>



<p align=center style='text-align:center'>&nbsp;</p>



<p align=center style='text-align:center'>&nbsp;</p>

<hr color="#000080">

<p>

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



</p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>PRO-DEX, INC. AND SUBSIDIARIES <br>
  CONSOLIDATED
  STATEMENTS OF INCOME<br>
  (Unaudited)</b></p>
  <div align="center">
    <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="width:569;margin-left:.45in;border-collapse:collapse;border:medium none; ">
      <tr style="page-break-inside:avoid">
        <td width="348" rowspan="2" valign="top" style="width:261.0pt;border-top:none;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td colspan="2" valign="top" style="width:221;border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">Three
        Months Ended December 31,</font></i></td>
      </tr>
      <tr style="page-break-inside:avoid">
        <td valign="top" style="border-left:medium none; border-right:medium none; border-top:medium none; width:118;border-bottom:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2003</font></i></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2002</font></i></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net sales </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 3,704,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 2,882,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cost of sales</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,997,000</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,624,000</font></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">Gross profit </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,707,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,258,000</font></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">Operating expenses: </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  height:4.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Selling
        </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;193,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        164,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; General and administrative
        expenses </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        682,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        714,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Research and development
        costs </font> </td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        439,000</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        388,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoFootnoteText"><font size="2">Total operating expenses
        </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,314,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,266,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">Income (loss) from operations
        </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        393,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
        (8,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">Other income (expense): </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Other income, net
        </font> </td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;6,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;(10,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Interest (expense)
        </font> </td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
        (16,000)</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (31,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Total</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (10,000)</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (41,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Income (loss) before provision for income taxes
        (credits)</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        383,000</font></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (49,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Provision (credit) for income taxes</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        153,000</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (20,000)</font></td>
      </tr>
      <tr style="height:9.0pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:9.0pt">
        <p class="MsoFootnoteText"><font size="2">Net Income (loss)</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  height:9.0pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        230,000</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  height:9.0pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (29,000)</font></td>
      </tr>
      <tr style="height:13.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.5pt">&nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  height:13.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  height:13.5pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">Net Income (loss) per share:</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText" style="margin-left:17.1pt"><font size="2">Basic
        </font> </td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.03</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.00)</font></td>
      </tr>
      <tr style="height:13.9pt">
        <td width="348" valign="bottom" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoPlainText" style="margin-left:17.1pt"><font size="2">Diluted&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>
        </td>
        <td valign="bottom" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  height:13.9pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.02</font></td>
        <td valign="bottom" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  height:13.9pt; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.00)</font></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border-top:none;border-left:solid windowtext 1.0pt;
  border-bottom:none;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
        &nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border-top:none;border-left:solid windowtext 1.0pt;
  border-bottom:none;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Weighted average shares outstanding - basic</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal">
        <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,776,600</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal">
        <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
        8,745,700</font></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border-top:none;border-left:solid windowtext 1.0pt;
  border-bottom:none;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
        &nbsp;</td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:118;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
        <td valign="top" style="border-left:medium none; border-top:medium none; border-bottom:medium none; width:103;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in"></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border:solid windowtext 1.0pt;border-top:
  none;padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Weighted average shares outstanding - diluted</font></td>
        <td valign="top" style="width:118;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,307,000</font></td>
        <td valign="top" style="width:103;border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        8,745,700</font></td>
      </tr>
    </table>
  </div>
  <b>
  <p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>
  <hr color="#000080">
  <p><br clear="all" style="page-break-before:always">
  </b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>PRO-DEX, INC. AND SUBSIDIARIES <br>
  CONSOLIDATED
  STATEMENTS OF INCOME<br>
  (Unaudited)</b></p>
  <div align="center">
    <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" width="561" style="width:420.75pt;margin-left:.45in;border-collapse:collapse;border:none">
      <tr style="page-break-inside:avoid">
        <td width="348" rowspan="2" valign="top" style="width:261.0pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="213" colspan="2" valign="top" style="width:159.75pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">Six
        Months Ended December 31,</font></i></td>
      </tr>
      <tr style="page-break-inside:avoid">
        <td width="108" valign="top" style="width:81.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2003</font></i></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2002</font></i></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net sales </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 7,232,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 5,599,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cost of sales </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,985,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,191,000</font></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">Gross profit </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,247,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,408,000</font></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt"></td>
      </tr>
      <tr style="height:4.5pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt">
        <p class="MsoNormal"><font size="2">Operating expenses: </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:4.5pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Selling
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;399,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        311,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; General and administrative
        expenses </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,295,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,302,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Research and development
        costs </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        826,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        773,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Amortization</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        ---</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        32,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoFootnoteText"><font size="2">Total operating expenses
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,520,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,418,000</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">&nbsp;Income (loss) from operations
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

        727,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (10,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp; </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">Other income (expense): </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Other income (expense),
        net </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        12,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;(4,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Interest (expense)
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (35,000)</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (44,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Total</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (23,000)</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (48,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Income (loss) before provision for income taxes
        (credits)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        704,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (58,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Provision (credit) for income taxes</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        282,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (23,000)</font></td>
      </tr>
      <tr style="height:9.0pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:9.0pt">
        <p class="MsoFootnoteText"><font size="2">Net Income (loss)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:double windowtext 2.25pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:9.0pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
        422,000</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:double windowtext 2.25pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:9.0pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (35,000)</font></td>
      </tr>
      <tr>
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>
        </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr style="height:13.9pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoPlainText"><font size="2">Net Income (loss) per share:</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt;height:13.9pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt;height:13.9pt"></td>
      </tr>
      <tr style="height:13.9pt">
        <td width="348" valign="top" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoPlainText" style="text-indent:17.1pt"><font size="2">Basic
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.05</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.00)</font></td>
      </tr>
      <tr style="height:13.9pt">
        <td width="348" valign="bottom" style="width:261.0pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoPlainText" style="text-indent:17.1pt"><font size="2">Diluted&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>
        </td>
        <td width="108" valign="bottom" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.05</font></td>
        <td width="105" valign="bottom" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:13.9pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.00)</font></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border-top:none;border-left:solid windowtext 1.0pt;
  border-bottom:none;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
        &nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border:solid windowtext 1.0pt;border-top:
  none;padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Weighted average shares outstanding - basic</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" >
        <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        8,776,600</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal">
        <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        8,766,400</font></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="105" valign="top" style="width:78.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="348" style="width:261.0pt;border:solid windowtext 1.0pt;border-top:
  none;padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Weighted average shares outstanding - diluted</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        9,266,300</font></td>
        <td width="105" valign="top" style="width:78.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;
        8,766,400</font></td>
      </tr>
    </table>
  </div>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>

<hr color="#000080">

<p>

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



</p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>PRO-DEX, INC. AND SUBSIDIARIES <br>
  CONSOLIDATED BALANCE SHEETS </b></p>
  <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" width="624" style="width:6.5in;margin-left:5.4pt;border-collapse:collapse;border:none">
    <tr style="page-break-inside:avoid">
      <td width="380" valign="top" style="width:284.75pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><b><font size="2">&nbsp;</font></b></td>
      <td width="125" valign="top" style="width:93.9pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" align="center" style="text-align:center"><i>
      <font size="2">December
      31, 2003</font></i></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" align="center" style="text-align:center"><i>
      <font size="2">June 30,
      2003</font></i></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" align="center" style="text-align:center"><i>
      <font size="2">&nbsp;(unaudited)</font></i></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" align="center" style="text-align:center"><i>
      <font size="2">&nbsp;(audited)</font></i></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><b><font size="2">ASSETS</font></b></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Current assets:</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Cash and cash equivalents </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoHeader"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 532,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoHeader"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 795,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Accounts receivable, net of allowance for doubtful </font> </td>
      <td width="125" valign="bottom" style="width:93.9pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="bottom" style="width:89.35pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      accounts of $45,000 and $30,000 </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,170,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,620,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Inventories, net </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,925,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,835,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Prepaid expenses </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      202,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      81,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Deferred taxes</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      750,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      770,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      current assets </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6,579,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6,101,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Equipment and leasehold improvements, net&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font>
      </td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      995,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,040,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Other assets:</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Goodwill</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,110,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,110,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Deferred taxes
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      833,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;833,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Other </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      11,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      20,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      other assets </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,954,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,963,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Total assets</font></td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:double windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 9,528,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:double windowtext 1.5pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 9,104,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><b><font size="2">&nbsp; </font></b></p>
      <p class="MsoNormal"><b><font size="2">LIABILITIES AND SHAREHOLDERS&#39; EQUITY</font></b></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">Current liabilities:</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp; Current portion of long term debt
      to shareholder </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      83,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      65,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp; Credit line payable
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      250,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      432,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp;&nbsp; Accounts payable
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      337,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;642,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp; Accrued expenses
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      524,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      349,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp; Income taxes payable
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      311,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      29,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      current liabilities </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,506,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,517,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Long-term debt to a shareholder, net of current
      portion</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      111,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      145,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Total liabilities</font></td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,616,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,662,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp; </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Commitments and contingencies </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">Shareholders&#39; equity:</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp;&nbsp; Series A convertible
      preferred shares; no par value; liquidation&nbsp;&nbsp; preference of
      $3.60 per share; 10,000,000 shares authorized; 78,129 shares issued and
      outstanding </font> </td>
      <td width="125" valign="bottom" style="width:93.9pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      283,000</font></td>
      <td width="119" valign="bottom" style="width:89.35pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      283,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">&nbsp;&nbsp;&nbsp; Common shares; no par value;
      50,000,000 shares authorized; 8,776,600 and 8,711,600 shares issued and
      outstanding, respectively </font> </td>
      <td width="125" valign="bottom" style="width:93.9pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; 15,033,000</font></td>
      <td width="119" valign="bottom" style="width:89.35pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; 14,999,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp; Accumulated deficit
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7,366,000)</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7,789,000)</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,950,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,493,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp; Receivable for stock purchase
      </font> </td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (38,000)</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (51,000)</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoFootnoteText"><font size="2">Total shareholders&#39; equity</font></td>
      <td width="125" valign="top" style="width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,912,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,442,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">Total liabilities and shareholders&#39; equity</font></td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 9,528,000</font></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
      <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 9,104,000</font></td>
    </tr>
    <tr>
      <td width="380" valign="top" style="width:284.75pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
      <td width="125" valign="top" style="width:93.9pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      <td width="119" valign="top" style="width:89.35pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
    </tr>
  </table>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>

<hr color="#000080">

<p>

<b><u><br
clear=all style='page-break-before:always'>
</u></b>



</p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>&nbsp;</b></p>
  <p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
  <b>PRO-DEX, INC. AND SUBSIDIARIES <br>
  CONSOLIDATED
  STATEMENTS OF CASH FLOWS<br>
  (Unaudited)</b></p>
  <div align="center">
    <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="margin-left:5.4pt;border-collapse:collapse;border:none">
      <tr style="page-break-inside:avoid">
        <td width="414" rowspan="2" valign="top" style="width:310.5pt;border-top:none;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="216" colspan="2" valign="top" style="width:2.25in;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">&nbsp;Six
        Months Ended December 31,</font></i></p>
        </td>
      </tr>
      <tr style="page-break-inside:avoid">
        <td width="108" valign="top" style="width:81.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2003</font></i></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" align="center" style="text-align:center"><i>
        <font size="2">2002</font></i></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash Flows from Operating Activities:
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoPlainText"><font size="2">Net Income (loss)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 422,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; (35,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp; Adjustments to reconcile net
        (loss) to net<br>
&nbsp;&nbsp;&nbsp;
        cash used in operating activities:</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Depreciation and amortization </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 193,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 202,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Provision for doubtful accounts </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Reserve for obsolete inventory </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (136,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (51,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Non-cash compensation </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Deferred taxes </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Changes in:</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (Increase) in accounts receivable </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (565,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (64,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        Decrease in inventories </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 399,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (Increase) in prepaid expenses </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (88,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (22,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (Increase) decrease in other assets</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (Decrease) in accounts payable and accrued expense </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (153,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (766,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;(Decrease) increase in income taxes payable </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 282,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (23,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net Cash (used in) Operating Activities
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (343,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr style="height:10.75pt">
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt">
        <p class="MsoNormal"><font size="2">Cash Flows From Investing Activities:
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt"></td>
      </tr>
      <tr style="height:10.75pt">
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp; Proceeds from sale of discontinued
        operations </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ---</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:10.75pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; 790,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp; Net additions to equipment and
        leasehold improvements </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (148,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (106,000)</font></td>
      </tr>
      <tr style="height:5.35pt">
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:5.35pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:5.35pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:5.35pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net Cash provided by (used in) Investing Activities
        </font>
        </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (148,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; 684,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash Flows from Financing Activities:</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;
        Principal payments on long-term borrowings </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (25,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; &nbsp; (82,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp; Net
        payments on line of credit </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (182,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (323,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;
        Additional paid in capital </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 35,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ---</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal" style="text-autospace:none"><font size="2">&nbsp;&nbsp;&nbsp;
        Stock repurchases </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ---</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (32,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net Cash (used in) Financing Activities</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (172,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (437,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Net (decrease) in Cash and Cash Equivalents
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (263,000)</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; (96,000)</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash and Cash Equivalents, beginning of period
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 795,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; &nbsp;236,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal">&nbsp;</td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash and Cash Equivalents, end of period
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoFootnoteText"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 532,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoFootnoteText"><font size="2">$&nbsp;&nbsp; &nbsp;&nbsp; 140,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt">&nbsp;</td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
    </table>
  </div>
  <p class="MsoNormal" align="center" style="text-align:center"><i>
  <font size="2">Supplemental
  Information</font></i></p>
  <div align="center">
    <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="margin-left:5.4pt;border-collapse:collapse;border:none">
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash payments for interest</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $33,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; $34,000</font></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt"></td>
      </tr>
      <tr>
        <td width="414" valign="top" style="width:310.5pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">Cash payments for income taxes
        </font> </td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,000</font></td>
        <td width="108" valign="top" style="width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt">
        <p class="MsoNormal"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 2,000</font></td>
      </tr>
    </table>
  </div>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal">&nbsp;</p>

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