-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 JlARUVqwdFoXshv7VKEqsfjmsO6TgwPtwhctV0ujAKnNKEgfZSbmBylPFlN6LAsV
 JpF+HZDvi5SzLXpEL5AXGg==

<SEC-DOCUMENT>0001003297-04-000422.txt : 20041028
<SEC-HEADER>0001003297-04-000422.hdr.sgml : 20041028
<ACCEPTANCE-DATETIME>20041028161626
ACCESSION NUMBER:		0001003297-04-000422
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20041028
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041028
DATE AS OF CHANGE:		20041028

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:		041102892

	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 8-K</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<br>
Washington,
 D.C.</b><b>&nbsp; 20549</b></p>





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

<p align="center"><b>CURRENT REPORT<br>
Pursuant to Section 13 OR 15(d) of the<br>
Securities Exchange Act of 1934</b></p>



<p align=center style='text-align:center'>Date of Report <br>
(Date of earliest event reported)<b> <br>
October 28, 2004</b></p>





<p align=center style='text-align:center'><b>PRO-DEX, INC.<br>
</b>(Exact name of registrant as specified in its charter)</p>
<div align="center">
	<table border="0" width="740" id="table1">
		<tr>
			<td align="left"><b>COLORADO</b></td>
			<td width="273">



<p align=center style='text-align:center'><b>0-14942</b></p></td>
			<td width="221" align="center"><b>84-1261240</b></td>
		</tr>
		<tr>
			<td align="left">(State or other</td>
			<td width="273">
			<p align="center">(Commission File Number)</td>
			<td width="221" align="center">(IRS
Employer </td>
		</tr>
		<tr>
			<td align="left">jurisdiction of </td>
			<td width="273">&nbsp;</td>
			<td width="221" align="center">Identification Number)</td>
		</tr>
		<tr>
			<td align="left">incorporation)</td>
			<td width="273">

<p style='text-indent:.5in'>&nbsp;</p>

			</td>
			<td width="221" align="center">&nbsp;</td>
		</tr>
	</table>
</div>

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

<p align=center style='text-align:center'><b>(714) 241-4411<br>
</b>(Registrant's Telephone Number, Including Area Code)</p>



<p style='text-autospace:none; margin-top:0; margin-bottom:0.0001pt'>Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions ( <i>see </i>General
Instruction A.2. below): </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.0001pt'>
<font size="2">&nbsp;&nbsp;&nbsp;[ ]
&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
</font> </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.0001pt'>
<font size="2">&nbsp;&nbsp;&nbsp;[ ]
&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
</font> </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.0001pt'>
<font size="2">&nbsp;&nbsp;&nbsp;[ ]
&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) </font> </p>

<p style='text-autospace:none; margin-top:0; margin-bottom:0.0001pt'>
<font size="2">&nbsp;&nbsp;&nbsp;[ ]
&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) </font> </p>





&nbsp;<p>&nbsp;</p>
<hr color="#000000">
<p>&nbsp;</p>
<p><b><u><br
clear=all style='page-break-before:always'>
</u></b></p>





<p><b><u>Item 2.02</u></b><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Results of Operations and
Financial Condition. </u></b></p>

<p style='text-align:justify; text-indent:0.5in'>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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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">On October
28, 2004, Pro-Dex, Inc. issued a press release announcing its financial
performance for the three month period ended September 30, 2004.&nbsp; On that same
date, Pro-Dex, Inc. conducted a conference call concerning its performance for
the three month period ended September 30, 2004.&nbsp; A copy of the news release is
attached to this Form&nbsp;8-K as Exhibit&nbsp;99.1.</p>





<p><b><u>Item 9.01</u></b><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Statements and
Exhibits</u></b></p>

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



<p style='margin-top:12.0pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibit
99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Press release dated October 28, 2004 of Pro-Dex Inc.&nbsp; </p>

&nbsp;<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">2</p>
<hr color="#000000">
<p>&nbsp;</p>
<p>

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


</p>


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





<p align="justify">&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; October 28, 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; <b>PRO-DEX, Inc (Registrant).</b></p>





<p style='margin-left:3.25in'>By:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <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;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Patrick Johnson<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Executive Officer</p>
<p style='margin-left:3.25in'>&nbsp;</p>
<p style='margin-left:3.25in'>&nbsp;</p>
<p style='margin-left:3.25in'>&nbsp;</p>
<p style='margin-left:3.25in'>&nbsp;</p>
<p style='margin-left:3.25in'>&nbsp;</p>
<p align="center">3</p><hr color="#000000">

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


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


<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></b><b>&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 October 28, 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 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' align="center">4</p>





</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>ex991.htm
<TEXT>
<html>

<head>


<title>Exhibit 99.1 Pro-Dex Reports Financial Results by EDGAR2.com</title>



</head>

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



<p style='line-height:normal'><img width=122 height=54
src="image001.jpg"></p>

<div align="left">
	<table border="0" width="740" id="table1">
		<tr>
			<td width="221">&nbsp;</td>
			<td>
			<p align="center">Contact:</td>
			<td width="395">

<p style='line-height:normal'>Patrick
Johnson, President &amp; CEO</p>

			</td>
		</tr>
		<tr>
			<td width="221">&nbsp;</td>
			<td>&nbsp;</td>
			<td width="395">

<p style='text-align:justify'>(714)
241-4411</p>

			</td>
		</tr>
		<tr>
			<td width="221">&nbsp;</td>
			<td>&nbsp;</td>
			<td width="395">

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

			</td>
		</tr>
		<tr>
			<td width="221"><b><i>For
Immediate Release</i></b> </td>
			<td>&nbsp;</td>
			<td width="395">

<p style='text-align:justify'>Jim
White, Investor Relations</p>

			</td>
		</tr>
		<tr>
			<td width="221">&nbsp;</td>
			<td>&nbsp;</td>
			<td width="395">

<p style='text-align:justify'>Kehoe, White &amp; Co., Inc.</p>

			</td>
		</tr>
		<tr>
			<td width="221">&nbsp;</td>
			<td>&nbsp;</td>
			<td width="395">

<p style='text-align:justify'>(562)
437-0655</p>

			</td>
		</tr>
	</table>
</div>

<p style='text-align:justify;line-height:normal'><b>&nbsp;</b></p>

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

<p>&nbsp;</p>

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



<p align="center"><b>EARNINGS INCREASE 140% FROM SAME QUARTER LAST YEAR AND 6% FROM PREVIOUS
QUARTER</b></p>





<p style='text-align:justify;text-indent:.5in'><b>SANTA ANA</b><b>, CA</b><b>,</b> October
28, 2004 - PRO-DEX, INC. (NASDAQ: PDEX) today announced improved financial
results for the quarter ended September 30, 2004.&nbsp; The Company reported
net income for the three months ended September 30, 2004 of $462,000 or $0.05
per share on a basic and diluted basis, as compared to a net income of $193,000
or $0.02 per share on a basic and diluted basis, for the three months ended
September 30, 2003.&nbsp; This represents an increase of 140% or $269,000 over the
first quarter last year and a sequential increase of $25,000 or 6% over the
previous quarter, producing the ninth consecutive increase in quarterly net
profit.&nbsp; </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;The first
quarter of fiscal 2005 was a continuation of the Company's recent history of improved
profit growth as sales of our core products remained stable and we continued to
increase the net profitability of the Company through improved gross margin and
continued expense control.&nbsp; At the end of last year, we consolidated the
Company's operations, merging our subsidiaries into the corporate parent and
eliminating the Company's historical 'holding company' business structure.&nbsp;
Along with this consolidation of the business has come a restructuring of our
Beaverton operations and the integration of our Product Development
capabilities, changes that we believe will enhance the Company's strategic
advantage in the market and our ability to rapidly grow the business in the
future.&nbsp; All of these operational changes were made while we continued to improve
the net profitability of the Company.&quot;&nbsp;&nbsp;&nbsp; </p>



<p style='text-align:justify;text-indent:.5in'>Net sales for
the three months ended September 30, 2004 decreased $196,000 or 5.6% to
$3,332,000, compared to the three months ended September 30, 2003.&nbsp; This
decrease in sales was primarily due to the conversion of revenue generated last
year from HealOzone product sales to royalty payments received this year.&nbsp; The
Company received $40,000 in royalty payments associated with sales of the
HealOzone product during the quarter ended September 30, 2004, revenue that is
reported as Other Income.&nbsp; During the first quarter of fiscal 2004, the Company
had $233,000 in sales of HealOzone product and no sales of that product in the
first quarter of the current year.&nbsp; Excluding the impact of these sales,
consolidated net sales for the three months ending September 30, 2004,
increased 1%.</p>



<p style='text-align:justify;text-indent:.5in'>For the three
months ended September 30, 2004, the Company's consolidated gross profit
increased 21% or $319,000 compared to the same three months in the previous
year.&nbsp; Gross profit as a percentage of sales increased significantly to 55.8%
for the three months ended September 30, 2004 compared to 43.7% for the three
months ended September 30, 2003 and compared to a gross margin percentage of
53.3% for the previous quarter.&nbsp; &quot;We're continuing to see the benefit of an
improved sales product mix and improved manufacturing efficiencies, which was
the primary focus of our management efforts last year,&quot; noted Mr. Johnson.&nbsp;
&quot;Despite a decrease in total sales during the first quarter, we were able to
once again increase gross profit as a percent of sales, primarily due to the
increased proportion of sales coming from the motion control segment of our
business.&nbsp; Sales in this segment were up nearly 30% during the first quarter
this fiscal year.&quot;&nbsp; </p>
<p style='text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='text-align:justify;text-indent:.5in'>&nbsp;</p>
<p class=MsoNormal>&nbsp;</p>

<b><hr color="#000080"><font size="2"><br clear=all
style='page-break-before:always'>
</font>
</b>

<p style='text-align:justify;text-indent:.5in'>&nbsp;</p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>Operating expenses decreased 3.6% to
$1,162,000 for the three months ended September 30, 2004 from $1,206,000 for
the three months ended September 30, 2003.&nbsp; On a sequential basis, operating
expenses decreased 6.8% compared to the previous quarter.&nbsp; This decrease was
due primarily to reduced expenses related to the Company's corporate
administration.&nbsp; Mr. Johnson stated, &quot;During the
first quarter this year, we completed the transition to new auditors, which
resulted in decreased audit related expenses compared to last year.&nbsp; We also
renegotiated all of the Company's insurance coverage at the end of last fiscal
year, resulting in a significant cost savings without changing the breadth of
our overall insurance coverage.&nbsp; During the first quarter this year, we used
this savings in administrative expenses to increase our investment in R&amp;D
activities and increase the bottom-line earnings of the Company.&quot;</p>



<p style='text-align:justify;text-indent:.5in;text-autospace:
none'>Addressing the Company's on-going operations,
Mr. Johnson noted, &quot;The first quarter of this fiscal year built on the solid
foundation we put into place with last year's improved financial performance.&nbsp;
Considering that we launched no new products during the first quarter and with
the loss of revenue from HealOzone product sales, we feel that increasing
bottom line earnings by 140% was an admirable achievement.&quot;&nbsp; Commenting on the
Company's near term prospects, Mr. Johnson said, &quot;First quarter operations
resulted in an increase in our product development activities, which are
currently projected to result in three new product launches in the second
quarter and another three new product launches in the third quarter of the
fiscal year.&nbsp; We have also identified several new product development
opportunities that we believe will translate into new product sales for several
quarters in the future.&nbsp; Based on these developments, we want to reaffirm the
sales and earnings guidance we provided at the beginning of the fiscal year and
thank our shareholders for their continued support.&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 2005 outlook, today at 4:30 p.m. Eastern Time. The call will
be broadcast over the Internet and can be accessed by visiting the Company's
website at <u><font color="#0000FF">www.pro-dex.com</font></u>.&nbsp; An online
replay will be available for 30 days.&nbsp; Additionally, a telephone replay will be
available one hour after the call for 48-hours by dialing (877) 519-4471 for
domestic callers and (973) 341-3080 for international callers; conference ID#
5309613.</p>



<p style='text-align:justify;text-indent:.5in'>Pro-Dex Inc.,
with operations in Santa Ana, California and Beaverton, Oregon, specializes in
bringing speed to market&nbsp;in the&nbsp;development and manufacture
of&nbsp;technology-based solutions that incorporate embedded motion control and
miniature rotary drive systems, serving the medical, dental, semi-conductor,
and scientific research markets.&nbsp; Pro-Dex's products are found in
hospitals, dental offices, medical engineering labs, scientific research
facilities and high tech manufacturing operations&nbsp;around the world.</p>



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



<p align="justify"><font size="2">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.</font></p>



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

<b><hr color="#000080"><font size="2"><br clear=all
style='page-break-before:always'>
</font>
</b>

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





<div align="left">





<table class=MsoNormalTable border=0 cellpadding=0 width=603
 style='width:740px;margin-left:0pt;border-collapse:collapse'>
 <tr style='height:15.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><b><font size="2">PRO-DEX, INC.<br>
	BALANCE SHEETS</font></b></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'>&nbsp;</p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.75pt'>
  <p align=center style='text-align:center'><b><font size="2">&nbsp;</font></b></p>
  </td>
  <td width=124 nowrap valign=bottom style='width:93.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.75pt'>

  </td>
  <td width=124 nowrap valign=bottom style='width:93.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:15.75pt'>

  </td>
 </tr>
 <tr style='height:25.5pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:25.5pt'>

  </td>
  <td valign=top style='border:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">September 30,2004
  <br>
	(unaudited)</font></i></p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">June 30,2004 <br>
	(audited)</font></i></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;border:solid windowtext 1.0pt;
  border-bottom:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>
  <p><b><font size="2">ASSETS</font></b></p>
  </td>
  <td width=124 nowrap valign=top style='width:93.2pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>

  </td>
  <td width=124 nowrap valign=top style='width:93.2pt;border:none;border-right:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">Current
  assets:</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Cash and cash equivalents </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,097,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,070,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Accounts receivable, net of allowance for doubtful </font> </p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  accounts of $45,000 at Sept. 30 and $40,000 at June 30</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p align="right"><font size="2">2,086,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,370,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Inventories, net </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,885,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,542,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Prepaid expenses </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  266,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  76,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Deferred income taxes</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  793,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  793,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total current assets </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,127,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  7,851,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">&nbsp;
  </font>
  </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><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> </p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  994,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,030,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">Other
  assets:</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Goodwill</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,110,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,110,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Deferred income taxes</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  788,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  788,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Other </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  46,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  16,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;Total other assets </font> </p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,944,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,914,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total assets</font></p>
  </td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  11,065,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  10,795,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;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'>

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><b><font size="2">&nbsp;</font></b></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><b><font size="2">LIABILITIES
  AND SHAREHOLDERS' EQUITY</font></b></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">Current
  liabilities:</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Current portion of long term debt to shareholder</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  71,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  70,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Accounts payable</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  545,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  397,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Accrued expenses</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  401,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;780,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Income taxes payable </font> </p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  786,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  809,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total current liabilities </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,803,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,056,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">Long-term
  debt to a shareholder, net of current portion</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  57,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  75,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">Total
  liabilities</font></p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  1,860,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,131,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">Commitments
  and contingencies </font> </p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>
  <p><font size="2">Shareholders'
  equity:</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Series A convertible preferred shares; no par value; liquidation</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  preference of $3.60 per share; 10,000,000 shares authorized;</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  78,129 shares issued and outstanding</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  283,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  283,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Common shares; no par value; 50,000,000 shares authorized;</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,858,600 shares issued and outstanding,</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  15,148,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  15,075,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Accumulated deficit </font> </p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (6,207,000)&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (6,669,000)&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  9,224,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,689,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">Receivable
  for stock purchase </font> </p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (19,000)&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (25,000)&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:15.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;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:12.75pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total shareholders' equity</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  9,205,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,664,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:15.75pt'>

  </td>
  <td valign=top style='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' align="right">

  </td>
  <td valign=top style='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' align="right">

  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=355 nowrap valign=top style='width:266.15pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:double windowtext 2.25pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Total liabilities and shareholders' equity</font></p>
  </td>
  <td valign=top style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:2.25pt double windowtext;
  border-right:1.0pt solid windowtext;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  11,065,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <p><font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  10,795,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.5pt'>

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=355 nowrap valign=bottom style='width:266.15pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=124 nowrap valign=bottom style='width:93.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=124 nowrap valign=bottom style='width:93.2pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
 </tr>
</table>











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

<b><hr color="#000080"><font size="2"><br clear=all
style='page-break-before:always'>
</font>
</b>

<p>&nbsp;</p>
<div align="left">











<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:740px;margin-left:-.75pt;border-collapse:collapse' id="table3">
 <tr style='height:15.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><b><font size="2">PRO-DEX, INC.<br>
	CONSOLIDATED
  STATEMENTS OF OPERATIONS<br>
	Three months ended
  September 30 (unaudited)</font></b></p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'>&nbsp;</p>
  </td>
 </tr>
 <tr style='height:15.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'>&nbsp;</p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 nowrap valign=top style='width:2.6in;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=236 nowrap colspan=2 valign=top style='width:176.8pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>
  <p align=center style='text-align:center'><i><font size="2">&nbsp;</font></i></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 nowrap valign=top style='width:2.6in;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=top style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">2004</font></i></p>
  </td>
  <td valign=top style='border:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">2003</font></i></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border-top:solid windowtext 1.0pt;
  border-left:solid windowtext 1.0pt;border-bottom:none;border-right:none;
  padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Net
  sales </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  3,332,000 </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  3,528,000 </font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Cost
  of sales </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,472,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,987,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Gross
  profit </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,860,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,541,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Operating
  expenses: </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Selling </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 200,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 205,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  General and administrative expenses </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 544,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 614,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Research and development costs </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;418,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 387,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Total
  operating expenses </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,162,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,206,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Income
  from operations </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 698,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 335,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Other
  income (expense): </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Other income, net </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 39,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Royalty income </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 40,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Interest (expense) </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7,000)</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;(19,000)</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Total</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 72,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (13,000)</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Income
  before income taxes provision</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 770,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 322,000
	</font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Income
  taxes provision</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 308,000
	</font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;129,000
	</font>
  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <font size="2">Net
  income</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:double windowtext 2.25pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  462,000 </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:solid windowtext 1.0pt;border-bottom:double windowtext 2.25pt;
  border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  193,000 </font>
  </td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=250 valign=top style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Net
  Income per share:</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Basic</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  0.05 </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  0.02 </font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Diluted</font></td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  0.05 </font>
  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border-top:none;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  0.02 </font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>

  </td>
  <td width=118 nowrap valign=top style='width:88.4pt;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:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
  <font size="2">Weighted
  average shares outstanding - basic</font></td>
  <td width=118 valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,863,902 </font>
  </td>
  <td width=118 valign=top style='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'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,776,000 </font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;
  border-right:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
  <font size="2">Weighted
  average shares outstanding - diluted</font></td>
  <td width=118 valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  9,470,127 </font>
  </td>
  <td width=118 valign=top style='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'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  9,413,505 </font>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=118 nowrap valign=bottom style='width:88.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=118 nowrap valign=bottom style='width:88.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=250 valign=bottom style='width:2.6in;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=118 nowrap valign=bottom style='width:88.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=118 nowrap valign=bottom style='width:88.4pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
 </tr>
 </table>











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

<b><hr color="#000080"><font size="2"><br clear=all
style='page-break-before:always'>
</font>
</b>

<div align="left">











<table class=MsoNormalTable border=0 cellpadding=0 width=627
 style='width:740px;margin-left:-.75pt;border-collapse:collapse' id="table2">
 <tr style='height:12.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><b><font size="2">PRO-DEX, INC.<br>
	CONSOLIDATED
  STATEMENTS OF CASH FLOWS<br>
	Three months ended
  September 30 (unaudited)</font></b></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'>&nbsp;</p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td colspan=3 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'>&nbsp;</p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=95 nowrap valign=bottom style='width:71.45pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td width=102 nowrap valign=bottom style='width:76.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=top style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">2004</font></i></p>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
  <p align=center style='text-align:center'><i><font size="2">2003</font></i></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;border:solid windowtext 1.0pt;
  border-bottom:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Cash
  Flows from Operating Activities: </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="center">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="center">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Net
  Income</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  462,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  193,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Adjustments to reconcile net income to net cash used in operating activities:</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Depreciation and amortization </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  84,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  90,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Provision for doubtful accounts</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  5,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  20,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (Recovery) reserve for obsolete inventory</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  29,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (122,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Stock based compensation</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  6,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  6,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Deferred taxes</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Changes in:</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (Increase) decrease in accounts receivable</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  278,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (651,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (Increase) in inventories</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (372,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (110,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;border:none;border-left:
  solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase) in prepaid expenses</font></td>
  <td valign=top style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (190,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (12,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&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 valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (30,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  9,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Increase (decrease) in accounts payable and accrued expenses</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (232,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  34,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Increase (decrease) in income taxes payable</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (22,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  129,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Net
  Cash provided by (used in) Operating Activities </font>
  </td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  18,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (394,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Cash
  Flows From Investing Activities: </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Purchases of equipment and leasehold improvements</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (47,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (90,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Net
  Cash (used in) Investing Activities </font>
  </td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (47,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(90,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Cash
  Flows from Financing Activities:</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Principal payments on long-term shareholder borrowings </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (17,000)&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (22,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Net borrowings on line of credit </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  - &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;284,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
  Proceeds from option and warrant exercise </font>
  </td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  73,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  35,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Net
  Cash provided by Financing Activities</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  56,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  297,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=bottom style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Net
  Increase (decrease) in Cash and Cash Equivalents </font>
  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  27,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (187,000)&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>
  <font size="2">Cash
  and Cash Equivalents, beginning of period </font>
  </td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,070,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  795,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">
  &nbsp;</td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'>
  <font size="2">Cash
  and Cash Equivalents, end of period </font>
  </td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  2,097,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  608,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:13.5pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;padding:0in 5.4pt 0in 5.4pt;
  height:13.5pt'>

  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=627 nowrap colspan=3 valign=bottom style='width:470.0pt;padding:
  0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <p align=center style='text-align:center'><i><font size="2">Supplemental
  Information</font></i></p>
  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=bottom style='width:322.05pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;border:solid windowtext 1.0pt;
  border-bottom:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Cash
  payments for interest</font></td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  6,600&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  21,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;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:12.75pt'>

  &nbsp;</td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
  <td valign=top style='border-left:medium none; border-top: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' align="right">

  </td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=top style='width:322.05pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'>
  <font size="2">Cash
  payments for income taxes </font>
  </td>
  <td valign=top style='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' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  331,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <td valign=top style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">
  <font size="2">&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  4,000&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
 </tr>
 <tr style='height:12.75pt'>
  <td width=429 nowrap valign=bottom style='width:322.05pt;padding:0in 5.4pt 0in 5.4pt;
  height:12.75pt'>

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="right">

  </td>
 </tr>
 </table>





</div>





</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>image001.jpg
<TEXT>
begin 644 image001.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S<O)BDT*2$B,$$Q-#D[/CX^)2Y$24,\2#<]/CO_
MVP!#`0H+"PX-#AP0$!P[*"(H.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SL[
M.SL[.SL[.SL[.SL[.SL[.SL[.SL[.SO_P``1"``V`'H#`2(``A$!`Q$!_\0`
M'P```04!`0$!`0$```````````$"`P0%!@<("0H+_\0`M1```@$#`P($`P4%
M!`0```%]`0(#``01!1(A,4$&$U%A!R)Q%#*!D:$((T*QP152T?`D,V)R@@D*
M%A<8&1HE)B<H*2HT-38W.#DZ0T1%1D=(24I35%565UA96F-D969G:&EJ<W1U
M=G=X>7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#V:BD9@HRQ
M``[DT@=2,[ACZT`.HI`01D<BEH`*1F"C).!03@9/2JDDAD;/;L*`*]_JXLI8
MUD39#+\JSGE5?L&';/8UE3ZSJ5M-]GG9(Y#_`*MP@V2_3T/M^57=<1)-"OE<
M`CR&//J!D5CV]M=:GX9C2^4([1CR3SN&!\K'W_I6D4K792L'_"<36-R(K^U$
ML9&=\7##\#UKI],U:RUBV^T6,ZRH.&'1D/H1V->6WLK7B^:RD/%&%DX_BSS_
M`"K.@U2[\/7Z:M9,1M($\1X65.X-;.DI+3<TY$]CV^EJGI>IVVL:;!J%F^^&
M=`RGN/4'W!XJY7+L8A1110`4444`<M\3+I+3X>:S(Y^]!Y8^K$*/YUX_\-OA
M^OC:TOKF[U*ZM8K=UCC\KG<Q!)SGTX_.N[^.VI?9O"%K8J<->70R/]E`2?U*
MUR/@U/B58>%E@\.:7"ME>,94N2$WG/&<EO;C(H`I>$K[4_"/Q270;6_ENK;[
M<;25"3MD7.,[<\$=?PKT6;XT>'HM7_L\VMXGER,D\LJJJQ;<Y/!)/3IWK-\!
M_#2?PW=3>*/$LJR7L*O*D2MN"'!)=F[MUKA_AAX=MO&7C2YGU2+SK:%6N9(S
MT=F;@'VR2?PH`]=\*>/[;QM<WL6GZ=<16UKM_?RD?.2>!@=.F>M=#-+;V[I'
M/.B._P!U>I^OTIFFZ-IFBN8=,L(;2.3+L(4"@MP,GWQ34EWWL_'S-)Y8^@X_
MGD_C0!/<6Z/&T,RAXY`05/1AW%4KQPJ''8=JL:A=PP74"2N5559WP"2!T'3U
M/\JR-5U/3#:,+69WG)`"LC`#GD\CTJHH:19:==%\)2WD:*SJ&=`XR-S-QGVR
M:R/#OB=]>O/[,U2SM)4F5MI2/C@9((.>U3>/9_L'@^WM\X,DB(1]`3_,"N1^
M&EK)>>+FNL'R[2%F8]@6^4#\L_E6T8)TW-FBC>+D=EH1L_#.KZUHXD6"P@C6
M_BWM\L*-D.,^@*Y_&N=G^-"7,]P-!\-7NIV]MS)."5`7UP%.!]:Y3XI:W*VN
M:TMNQ$4L4-F64]0K%B/^^E-9WA/5O%</A2;0O#?AZ5C?LQFOQ&Q+`C;P3A1@
M<9Y[UE-:W(DM3UWPU\0(/%7AN]U/3M/E-U9`^99-(,L<9&&QW`...HK.\(?%
MK3O%6K2V#6+Z?Y<#3>9+,"I"XR.@QQD_@:M?#'P5-X.T&1+UU-[>.))E4Y6,
M`8"Y[]\_6O#/&D>F6GC74H]%N]UDTI&^/HN?OJ/5021[BH)/;?#GQ/'BKQ%)
MI>E:'/+!$YWWAF`18\X#D8[]AUKO*YWP1X:TKPSX>@@TLB59T65[GO.2/O?3
MT':NBH`\S^(GP]\1>-M7CEBO[&"RM4VV\;E]V3C<3@8ZBN\T+3O[(T*QTWY<
MVMND1*]"0`"1^-:%%`&5XGL+W5?#=_I^GRQPW-U"8D>3.U0W!Z>V:Y?X9>`+
MSP2-1:^N+>>2Z*!&ASPJYSG('<UWM%`&=K<UU:Z<]W9A6E@^<HW1U[C^OX5R
M(\>'?O71HXYSUD\TL,_0`9KOB`1@C(KS#QGX=N](G>_L(6EL'.651DP'Z?W?
M?M6M)1D[,T@D]&+/XAGF9Y`K-+(?FDD&T#TP/0=A54ZO$U]!]ID98!(IDVJ6
M.`>>!7*-JTF,J1CUJV6GGLT:UD3<X&7/;UKL]FHF_+9'<>(O%'@K78([?5;B
M]C$+;U"0NISCZ50A\6:3IVDRVGA.PEMHY/OWDZ[23CE@#RQQW.`*XY=.MK<^
M??S+(W7,APO_`->M[PYX<NO%MRA\I[?14(,LS+M-R!_`@]#W-9NG&,=7H0XQ
M2'V?@.7Q7X"OKA2L5Y>SK-9M+G!2,$+D_P"UESGW%9_A]_BQX5L?[&L]$$]O
M&Q\KSD5Q'DY.U@PXSD\U[;%$D,2QQHJ(@"JJC``'0"GUR2ES.YA)W=SR_7#\
M2;CPA;Z9;V3R:A=*SWUVLD:[`6.(T`/'&,FLG4_@ZUO\/8([&V%QKZRK+*P8
M#<#PR`GC`SG\*]FHJ1'&_#&U\0:9X:&D^(+-H)+-MMNY=6WQGD#@]CD?3%=E
M110`4444`%%%%`!28SQ110!R>M?#7P]K,CS"&2RG<Y+VS;03ZE3Q^E8"?!M(
MG)A\1W<:'J%B`/YYHHK55II63+522TN;.D_"WP[I\JSW2S:G,O(:[;<H_P"`
HCC\\UV*(J($10JJ,``8`%%%9N<I;LER;W'4444A!1110`4444`?_V3\_
`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
