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<SEC-DOCUMENT>0001003297-08-000242.txt : 20081113
<SEC-HEADER>0001003297-08-000242.hdr.sgml : 20081113
<ACCEPTANCE-DATETIME>20081113160842
ACCESSION NUMBER:		0001003297-08-000242
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20080930
FILED AS OF DATE:		20081113
DATE AS OF CHANGE:		20081113

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRO DEX INC
		CENTRAL INDEX KEY:			0000788920
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				841261240
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0608

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14942
		FILM NUMBER:		081185087

	BUSINESS ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
		BUSINESS PHONE:		949-769-3200

	MAIL ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>esprodex10q.htm
<TEXT>
<html>

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<h4 style='margin:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid;font-size:12.0pt;font-family:"Times New Roman";font-weight:normal;'>
<b><font style="font-size: 14.0pt">UNITED STATES </font></b></h4>
<h4 style='margin:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid;font-size:12.0pt;font-family:"Times New Roman";font-weight:normal;'>
<b><font style="font-size: 14.0pt">SECURITIES AND EXCHANGE COMMISSION</font></b></h4>
<h5 style='margin-top:12.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in;font-size:13.0pt;font-family:"Times New Roman";font-weight:bold;text-align:center'>Washington, D.C. 20549</h5>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b><font style="font-size: 6.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b><font style="font-size: 6.0pt">&nbsp;</font></b></p>
<h6 style='margin-top:12.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in;font-size:11.0pt;font-family:"Times New Roman";font-weight:bold;text-align:center'>
<font style="font-size: 24.0pt">FORM
  10-Q</font></h6>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 14.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-indent:-.75in;text-autospace:
  none'><b>[X]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>For
  the quarterly period ended September 30, 2008</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b><font style="font-size: 6.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b>OR</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-indent:-.75in;text-autospace:
  none'><b>[&nbsp; ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.&nbsp;&nbsp; </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-indent:-.75in;text-autospace:
  none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-align:center;
  text-indent:-.75in;text-autospace:none'><b>For the transition period from
  ______ to ______.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Commission
  File Number&nbsp;&nbsp;&nbsp; 0-14942 </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 24.0pt">PRO-DEX, INC.&nbsp;&nbsp;&nbsp; </font></b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>(Exact
  name of Registrant as Specified in its Charter)&nbsp;&nbsp;&nbsp;&nbsp; </b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=721
 style='width:100%;border-collapse:collapse'>
		<tr>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b>&nbsp;&nbsp; </b></p></td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b>&nbsp;&nbsp;&nbsp;&nbsp; </b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b><u>Colorado
  </u></b></p></td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b><u>84-1261240
  </u></b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b>(State
  or Other Jurisdiction of&nbsp;&nbsp;&nbsp; </b></p></td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b>(IRS
  Employer Identification No.) </b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b>Incorporation
  or Organization)&nbsp;&nbsp;&nbsp; </b></p></td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b>&nbsp;&nbsp; </b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b>&nbsp;&nbsp; </b></p></td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b>&nbsp;&nbsp;&nbsp;&nbsp; </b></p></td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><u>2361
  McGaw Avenue, Irvine, California 92614&nbsp;&nbsp;&nbsp; </u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>(Address
  of Principal Executive Offices)&nbsp;&nbsp;&nbsp;&nbsp; </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;&nbsp; </font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;&nbsp; &nbsp; </font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Registrant's
  telephone number including area code: <u>949-769-3200&nbsp;&nbsp;&nbsp; </u>
</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<font style="font-size: 10.0pt">Indicate by check mark whether the registrant: (1) has
filed all reports required by Section 13 or 15(d) of the&nbsp; Exchange Act during
the&nbsp; past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past&nbsp; 90 days.&nbsp;&nbsp;&nbsp; Yes [X] No [ ] </font>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<font size="2">Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of&nbsp; &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of
the Exchange Act. (Check one):</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<font size="2">Large Accelerated Filer [&nbsp; ]&nbsp;
Accelerated Filer [&nbsp; ]&nbsp; Non-Accelerated Filer&nbsp; [&nbsp; ]&nbsp; Smaller reporting company
[ x ]</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">Yes
[&nbsp; ] No [X]</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">Indicate
the number of shares outstanding of each of the issuer&#146;s classes of common
equity as of the latest practicable date:&nbsp; 9,702,288 shares of Common Stock, no
par value, as of November 3, 2008. </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>INDEX
</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:9.0pt;margin-right:0in;margin-bottom:0in;
margin-left:0in;margin-bottom:.0001pt;text-align:center'>Pro-Dex, Inc.</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;page-break-after:avoid'>&nbsp;</p>
<div align=center>
	<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width="100%"
 style='width:100.3%;border-collapse:collapse'>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<b><font style="font-size: 10.0pt">Part I.&nbsp;Financial
  Information </font></b></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">2</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;1.&nbsp;Financial
  Statements: </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">2</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Condensed consolidated
  balance sheets &#150; June 30, 2008 and September&nbsp;30, 2008 (unaudited)</font></p>
			</td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">2</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Condensed consolidated
  statements of operations (unaudited) &#150; Three months ended September 30, 2008
  and 2007</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">3</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Condensed consolidated
  statements of cash flows (unaudited) &#150; Three months ended September 30, 2008
  and 2007</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">4</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Notes to condensed
  consolidated financial statements (unaudited) &#150; September 30, 2008</font></p>
			</td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">5</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;2.&nbsp;Management&#146;s
  Discussion and Analysis of Financial Condition and Results of Operations
			</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">11</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;3.&nbsp;Quantitative
  and Qualitative Disclosures About Market Risk </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">17</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;4.&nbsp;Controls
  and Procedures </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">17</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.55pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:-2.3pt;text-align:right;
  text-indent:2.3pt; margin-right:0in; margin-top:0in'><font size="2">&nbsp;</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:18.15pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:18.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<b><font style="font-size: 10.0pt">Part II.&nbsp;Other
  Information </font></b></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">18</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:6.75pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:6.75pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:15.75pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:15.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;1.&nbsp;Legal
  Proceedings </font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">18</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:4.0pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:4.0pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:.2in'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:.2in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;2. Unregistered
  Sales of Equity Securities and Use of&nbsp; Proceeds </font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'><font size="2">18</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:5.85pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:5.85pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:4.5pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:4.5pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;3. Defaults Upon
  Senior Securities </font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">19</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:4.5pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:4.5pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;4. Submissions of
  Matters to a Vote of Securities Holders </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">19</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:7.65pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:7.65pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:17.1pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:17.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;5. Other
  Information </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">19</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:5.4pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:5.4pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.55pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:8.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Item&nbsp;6.&nbsp;Exhibits </font>
			</p></td>
			<td colspan=2 style='padding:0in;
  ' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right;text-indent:2.3pt'>
			<font style="font-size: 10.0pt">&nbsp;20</font></p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:8.1pt'>
			<td width=649 style='width:486.75pt;padding:0in 0in 0in 0in;height:8.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
			<font size="2">&nbsp;</font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:-2.3pt;text-align:right;text-indent:2.3pt'>&nbsp;</p></td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr style='height:6.4pt'>
			<td width=649 valign=top style='width:486.75pt;padding:0in 0in 0in 0in;
  height:6.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: 10.0pt">Signatures </font></p></td>
			<td colspan=2 style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:.75pt;
  margin-left:0in;text-align:right;text-indent:2.3pt'><font size="2">20</font></p>
			</td>
			<td style='border:none;padding:0in 0in 0in 0in' width=17>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
		</tr>
		<tr height=0>
			<td width=674 style='border:none'></td>
			<td width=11 style='border:none'></td>
			<td width=48 style='border:none'></td>
			<td width=18 style='border:none'></td>
		</tr>
	</table></div>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b><font style="font-size: 11.0pt">Item 1. &nbsp;&nbsp;&nbsp;&nbsp; </font>Financial
Statements</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=663
 style='width:100%;border-collapse:collapse' id="table1">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<b>&nbsp;</b></p></td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
			<td valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>CONSOLIDATED&nbsp;BALANCE&nbsp;SHEETS</b></p></td>
			<td valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:26.15pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:26.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:26.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>September&nbsp;30,&nbsp;2008</i></p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>(unaudited)</i></p></td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:26.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>June&nbsp;30,2008</i></p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>(audited)</i></p></td>
			<td valign=bottom style='padding:1.1pt;
  height:26.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<b>ASSETS</b></p></td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Current&nbsp;assets:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash&nbsp;and&nbsp;cash&nbsp;equivalents</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>384,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>517,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts&nbsp;receivable,&nbsp;net&nbsp;of&nbsp;allowance&nbsp;for&nbsp;doubtful&nbsp;accounts</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of&nbsp;$130,000&nbsp;at&nbsp;September&nbsp;30,&nbsp;2008&nbsp;and&nbsp;$144,000&nbsp;at&nbsp;June&nbsp;30,&nbsp;2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,183,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,842,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other&nbsp;current&nbsp;receivables</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>205,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,640,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,101,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>265,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>214,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>869,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>860,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,182,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,176,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;current&nbsp;assets</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10,523,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10,915,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:7.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:7.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:7.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:7.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Property,&nbsp;plant,&nbsp;equipment,&nbsp;net</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,416,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,470,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Other&nbsp;assets:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,997,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,997,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangibles&nbsp;-&nbsp;Patents,&nbsp;net</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,197,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,221,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>62,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>68,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;other&nbsp;assets</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,256,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,286,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:8.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:8.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:8.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:8.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:8.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;assets</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,195,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,671,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:8.7pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:8.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:8.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:8.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:8.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<b>LIABILITIES&nbsp;AND&nbsp;SHAREHOLDERS'&nbsp;EQUITY</b></p></td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Current&nbsp;liabilities:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit&nbsp;Line</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,600,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,000,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts&nbsp;payable</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,303,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,736,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,712,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,053,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income&nbsp;taxes&nbsp;payable</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>114,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current&nbsp;portion&nbsp;of&nbsp;term&nbsp;note</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>333,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>396,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current&nbsp;portion&nbsp;of&nbsp;real&nbsp;estate&nbsp;loan</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>31,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>30,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;current&nbsp;liabilities</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,979,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,329,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Long-term&nbsp;liabilities</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real&nbsp;estate&nbsp;loan</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,553,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,560,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patent&nbsp;deferred&nbsp;payable</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>44,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>44,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>290,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>290,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;rent</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>167,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>150,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;long-term&nbsp;liabilities</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,054,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,044,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;liabilities</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>8,033,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>8,373,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Commitments&nbsp;and&nbsp;contingencies</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Shareholders'&nbsp;equity:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common&nbsp;shares;&nbsp;no&nbsp;par&nbsp;value;&nbsp;50,000,000&nbsp;shares&nbsp;authorized;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,738,437&nbsp;shares&nbsp;issued&nbsp;and&nbsp;outstanding&nbsp;September&nbsp;30,&nbsp;2008,</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,803,366&nbsp;shares&nbsp;issued&nbsp;and&nbsp;outstanding&nbsp;June&nbsp;30,&nbsp;2008,</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>16,527,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>16,545,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated&nbsp;deficit</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(3,365,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(3,247,000)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:9.45pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;shareholders'&nbsp;equity</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13,162,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13,298,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:9.45pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:9.45pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:2.25pt double windowtext;border-right:
  1.0pt solid windowtext;padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;liabilities&nbsp;and&nbsp;shareholders'&nbsp;equity</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,195,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,671,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:3.65pt'>
			<td valign=bottom style='padding:1.1pt;
  height:3.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:3.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:3.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:3.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=616
 style='width:100%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<font style="font-size: 10.0pt">&nbsp;</font></p></td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.8pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
		</tr>
		<tr style='height:14.8pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;OPERATIONS</b></p></td>
		</tr>
		<tr style='height:14.8pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30&nbsp;(unaudited)</b></p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>2008</i></p></td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>2007</i></p></td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;sales</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,656,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,992,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cost&nbsp;of&nbsp;sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,902,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,839,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;profit</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,754,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,153,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Operating&nbsp;expenses:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>344,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>323,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General&nbsp;and&nbsp;administrative&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>835,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>735,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research&nbsp;and&nbsp;development&nbsp;costs</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>731,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>575,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;operating&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,910,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,633,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Income&nbsp;(loss)&nbsp;from&nbsp;operations</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(156,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>520,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Other&nbsp;income&nbsp;(expense):</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other&nbsp;expense,&nbsp;net</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty&nbsp;income</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest&nbsp;expense</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(61,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(47,000)</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(59,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(35,000)</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Income&nbsp;(loss)&nbsp;before&nbsp;provision&nbsp;(benefit)&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(215,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>485,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Provision&nbsp;(benefit)&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(97,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>159,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;income&nbsp;(loss)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(118,000)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>326,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;income&nbsp;(loss)&nbsp;per&nbsp;share:</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(0.01)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.03&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(0.01)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.03&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Weighted&nbsp;average&nbsp;shares&nbsp;outstanding&nbsp;-&nbsp;basic</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,783,407&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,718,366&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Weighted&nbsp;average&nbsp;shares&nbsp;outstanding&nbsp;-&nbsp;diluted</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,783,407&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,947,884&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.0pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.95pt'>
			<td valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:11.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i>&nbsp;</i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">See notes to consolidated financial statements.</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>3</p>
			</td>
		</tr>
	</table></div>&nbsp;<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";text-align:center'>&nbsp;</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i>&nbsp;</i></p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=708
 style='width:100%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<font style="font-size: 10.0pt">&nbsp;</font></p></td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
		</tr>
		<tr style='height:12.2pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;CASH&nbsp;FLOWS</b></p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td colspan=5 valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30&nbsp;(unaudited)</b></p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>2008</i></p></td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>2007</i></p></td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;Flows&nbsp;from&nbsp;Operating&nbsp;Activities:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Income&nbsp;(Loss)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(118,000)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>326,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments&nbsp;to&nbsp;reconcile&nbsp;net&nbsp;income&nbsp;to&nbsp;net&nbsp;cash&nbsp;provided&nbsp;by&nbsp;operating&nbsp;activities:</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>&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:1.1pt; height:12.2pt'>&nbsp;</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>&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:1.1pt; height:12.2pt'>&nbsp;</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation&nbsp;and&nbsp;amortization</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>222,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>120,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock&nbsp;based&nbsp;compensation</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>48,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Recovery&nbsp;of)&nbsp;provision&nbsp;for&nbsp;doubtful&nbsp;accounts</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(14,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(12,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision&nbsp;for&nbsp;slow&nbsp;moving&nbsp;and&nbsp;obsolete&nbsp;inventory</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>15,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease)&nbsp;in&nbsp;deferred&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes&nbsp;in:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase)&nbsp;decrease&nbsp;in&nbsp;accounts&nbsp;receivable</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(122,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>481,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease&nbsp;in&nbsp;inventories</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>461,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>172,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase)&nbsp;in&nbsp;prepaid&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(50,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(51,000)</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase)&nbsp;decrease&nbsp;in&nbsp;other&nbsp;assets</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(12,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease)&nbsp;Increase&nbsp;in&nbsp;accounts&nbsp;payable&nbsp;and&nbsp;accrued&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(756,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>58,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease)&nbsp;in&nbsp;income&nbsp;taxes&nbsp;payable</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(124,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(53,000)</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Cash&nbsp;(used&nbsp;by)&nbsp;provided&nbsp;by&nbsp;Operating&nbsp;Activities</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(459,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,092,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;Flows&nbsp;From&nbsp;Investing&nbsp;Activities:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases&nbsp;of&nbsp;equipment&nbsp;and&nbsp;leasehold&nbsp;improvements</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(144,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(344,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Cash&nbsp;used&nbsp;in&nbsp;Investing&nbsp;Activities</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(144,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(344,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;Flows&nbsp;from&nbsp;Financing&nbsp;Activities:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net&nbsp;borrowing&nbsp;(payments)&nbsp;on&nbsp;line&nbsp;of&nbsp;credit</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>600,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(300,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal&nbsp;payments&nbsp;on&nbsp;term&nbsp;note</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(63,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(63,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal&nbsp;payments&nbsp;on&nbsp;mortgage</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(7,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(7,000)</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock&nbsp;Repurchases</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(60,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Cash&nbsp;provided&nbsp;by&nbsp;(used&nbsp;by)&nbsp;Financing&nbsp;Activities</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>470,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(370,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Increase&nbsp;(decrease)&nbsp;in&nbsp;Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(133,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>378,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents,&nbsp;beginning&nbsp;of&nbsp;period</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>517,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>403,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents,&nbsp;end&nbsp;of&nbsp;period</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>384,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>781,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td colspan=5 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<i>Supplemental&nbsp;Information</i></p></td>
		</tr>
		<tr style='height:12.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;payments&nbsp;for&nbsp;interest</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:12.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>56,000&nbsp;</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:12.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.95pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>45,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;payments&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>215,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i>&nbsp;</i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i>&nbsp;</i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<i>&nbsp;</i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i>&nbsp;</i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">&nbsp;</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">See notes to consolidated financial statements.</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>4</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PRO-DEX,
INC. AND SUBSIDIARIES </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BASIS OF PRESENTATION</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The accompanying unaudited consolidated financial statements of Pro-Dex,
Inc. (&#147;we&#148;, &#147;us&#148;, &#147;our&#148;, &#147;Pro-Dex&#148; or the &#147;Company&#148;) have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation S-K.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
These financial statements should be read in conjunction with the audited
financial statements presented in our Annual Report for the fiscal year ended
June 30, 2008.&nbsp; In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. The results of operations
for such interim periods are not necessarily indicative of the results that may
be expected for the full year. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended June 30, 2008. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INVENTORIES</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories
are stated at the lower of cost (the first-in, first-out method) or market and
consist of the following: </p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=596
 style='width:90%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="64%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
			</td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="15%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="2%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="16%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="64%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:
  15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>September&nbsp;30,&nbsp;2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2008</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="64%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(unaudited)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(audited)</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Raw&nbsp;Materials</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="15%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			1,683,257&nbsp;</p>
			</td>
			<td width="2%" valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="16%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			1,874,302&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Work&nbsp;in&nbsp;process</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,135,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>993,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.15pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Development&nbsp;costs&nbsp;under&nbsp;contract</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>232,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>200,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1px solid #000000;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Finished&nbsp;goods</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			1,589,743&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			2,033,698&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="63%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt; border-top-color:inherit'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;inventories</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt; border-top-color:inherit'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="15%" valign=bottom style='border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:15.2pt; border-top-color:windowtext'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,640,000&nbsp;</p>
			</td>
			<td width="2%" valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt; border-top-color:inherit'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="16%" valign=bottom style='border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt; border-top-color:inherit'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,101,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WARRANTY</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The warranty reserve is based on historical costs of warranty repairs and
expected future identifiable warranty expenses.&nbsp; As of September 30, 2008, we
carried a warranty reserve of $878,000, which was comprised of $60,000 for
future warranty expenses related to products that are currently in the process
of being repaired, $776,000 for future warranty expenses related to products
that are still in the field, and $42,000 for our legacy dental and industrial
products.&nbsp; Warranty expenses are reflected in the financial statements in cost
of sales (&#147;COS&#148;).&nbsp; The total warranty expense reflected in the cost of sales
was $201,000 for the quarter ended September 30, 2008 and $366,000 for the
quarter ended September 30, 2007.&nbsp; The warranty accrual and expenses for the
three months ended September 30, 2008 and 2007 are presented below:</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=586
 style='width:85%;border-collapse:collapse' id="table2">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="63%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
			</td>
			<td width="2%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="15%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="5%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="14%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td width="63%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Beginning&nbsp;Balance</p>
			</td>
			<td width="2%" valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="15%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>861,000&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>469,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Cash&nbsp;cost&nbsp;reducing&nbsp;accrual</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(184,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(392,000)</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td width="63%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Increased&nbsp;reserve&nbsp;expensed</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>201,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>366,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.25pt'>
			<td width="63%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Ending&nbsp;Balance</p>
			</td>
			<td width="2%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="15%" valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>878,000&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>443,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>5</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NET
INCOME PER SHARE </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
following table reconciles the weighted average shares outstanding for basic
and diluted net (loss) income per share for the periods indicated.&nbsp; For the
period ending September 30, 2008, there were 61,332 potentially dilutive options
not included as they would have been anti-dilutive due to the loss.</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=683
 style='width:95%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="66%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:6.0pt;text-align:center'>&nbsp;</p>
			</td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="13%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="6%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="11%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;(loss)&nbsp;income</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(118,000)</p>
			</td>
			<td width="6%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>326,000&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Basic&nbsp;net&nbsp;(loss)&nbsp;income&nbsp;per&nbsp;common&nbsp;share:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;Weighted&nbsp;average&nbsp;number&nbsp;of&nbsp;common&nbsp;shares&nbsp;outstanding</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,783,407&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,718,366&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Basic&nbsp;net&nbsp;(loss)&nbsp;income&nbsp;per&nbsp;common&nbsp;share</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(0.01)</p>
			</td>
			<td width="6%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.03&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Diluted&nbsp;net&nbsp;(loss)&nbsp;income&nbsp;per&nbsp;share:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;Weighted&nbsp;average&nbsp;of&nbsp;common&nbsp;shares&nbsp;outstanding</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,783,407&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,718,366&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect&nbsp;of&nbsp;potentially&nbsp;dilutive&nbsp;securities&nbsp;(options)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>195,355&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect&nbsp;of&nbsp;potentially&nbsp;dilutive&nbsp;securities&nbsp;(restricted&nbsp;shares)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,038&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect&nbsp;of&nbsp;potentially&nbsp;dilutive&nbsp;securities&nbsp;(warrants)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13,125&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Weighted&nbsp;average&nbsp;number&nbsp;of&nbsp;common&nbsp;and&nbsp;shares&nbsp;-</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td width="66%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Diluted</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,783,407&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,947,884&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td width="66%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Diluted&nbsp;net&nbsp;(loss)&nbsp;income&nbsp;per&nbsp;common&nbsp;share</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(0.01)</p>
			</td>
			<td width="6%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.03&nbsp;</p>
			</td>
			<td width="1%" valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:6.0pt;text-align:center'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>CREDIT FACILITIES</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On November 1,
2007, our existing credit facility with Wells Fargo was replaced with an
expanded facility with a total borrowing capacity of $6,562,500.&nbsp; Included in
the increase is an increase in the credit line borrowing availability from
$2,000,000 to $4,000,000.&nbsp; The credit line&#146;s terms require monthly interest payments
at the prime rate of interest (5.00% at September 30, 2008); or LIBOR (4.0% at September
30, 2008) plus 1.75%, at our discretion, based on outstanding borrowings.&nbsp; The
total effective interest rate at September 30, 2008 for borrowings on the credit
line was 5.0%.&nbsp; The credit facility expires on November 1, 2009.&nbsp; In addition
to the credit line, a term commitment is available for borrowings for amounts
up to $2,000,000.&nbsp; We can take advances against this commitment through
November 1, 2008, at which time the outstanding borrowings against this
commitment will be converted to a term loan, to be amortized and repaid over 60
months. &nbsp;The term commitment&#146;s terms require monthly interest payments at the
prime rate of interest; or LIBOR plus 2.0%, at our discretion, based on
outstanding borrowings.&nbsp; The borrowings from this term commitment were used for
construction financing of tenant improvements for our Irvine, California
facility.&nbsp; The term loan that was entered into in January 2006 to finance the
Astromec purchase remains in place.&nbsp; As of September 30, 2008, there was a
principal balance on this term loan of $333,333 which is required to be fully
paid-off in January 2010, in accordance with its amortization schedule.&nbsp; The
term loan&#146;s terms require monthly interest payments at the prime rate of
interest; or LIBOR plus 2.5%, at our discretion, based on outstanding
borrowings, with no minimum interest charge.&nbsp; The total effective interest rate
at September 30, 2008 for borrowings on the term loan was 5.0%. &nbsp;All assets of
the Company except our Carson City land and building secure the outstanding
borrowings from Wells Fargo. There was $2,600,000 borrowed under the credit
line and nothing borrowed against term commitment facility as of September 30,
2008.&nbsp; The total eligible additional borrowing capacity at September 30,
2008 was $3,400,000.&nbsp; See Note 11 for additional information concerning the
tenant improvement credit facility. &nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>6</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In March 2006,
we entered into a 10-year mortgage with Union Bank of California for
$1,650,000.&nbsp; Its terms require monthly interest payments at a fixed rate
of 6.73% based on outstanding borrowings.&nbsp; The principal payments on the
mortgage note are based on a 25-year amortization of the note and are $11,000
per month beginning May 1, 2006.&nbsp; The outstanding borrowings are secured by our
Carson City land and building.&nbsp; There was an outstanding balance of approximately
$1,583,000 under the terms of this mortgage as of September 30, 2008.&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>There
are certain financial and non-financial covenants that we must meet to be in
compliance with the terms of the Wells Fargo credit facility (which includes
the term loan and the line of credit), as amended, and the Union Bank
mortgage.&nbsp; At September 30, 2008, we had a net loss which violated the quarterly
loss covenant in the Wells Fargo credit facility.&nbsp; This covenant was waived by
Wells Fargo at a charge of $5,000.&nbsp; Consequently, we have included $83,000 of
debt related to the term note to short term debt from long term debt.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INCOME
TAXES</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Deferred income taxes are provided on a liability method whereby deferred
tax assets and liabilities are recognized for temporary differences.&nbsp; Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases.&nbsp; Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.&nbsp; We have tax credit carry forwards
totaling $247,000 for state tax purposes that do not expire and can be carried
forward indefinitely until fully utilized.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Significant
management judgment is required in determining our provision for income taxes
and the recoverability of our deferred tax asset.&nbsp; Such determination is based
on our estimates of future taxable income by jurisdictions in which we operate
and the period over which our deferred tax assets will be recoverable.&nbsp; In the
event that actual results differ from these estimates or we adjust these
estimates in future periods, we may need to establish a valuation allowance,
which could result in a tax provision up to the carrying value of our deferred
tax assets.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As of September 30, 2008, we have accrued $88,000 of uncertain
tax positions related to various federal and state income tax matters.&nbsp; Of this
total, $79,000 relates to R&amp;D credits and would reduce the Company&#146;s income
tax expense if recognized and would result in a corresponding decrease in the
Company&#146;s effective tax rate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>During the quarter, the Internal Revenue Service
effectively settled its audit of our federal income tax returns for the fiscal
years ended June 30, 2004 through June 30, 2006.&nbsp; This settlement resulted in
the reversal of $41,000 of unrecognized tax benefits associated with Section
263A costs we reported, which reduced our tax expense by $6,000, thereby
reducing our income tax benefit for the three months ended September 30, 2008.&nbsp;
Our remaining FIN 48 tax liability as of September 30, 2008, related to the
fiscal years ended June 30, 2004 through June 30, 2006, is $88,000.&nbsp; We have
not identified any new unrecognized tax benefits.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>A
reconciliation of the beginning and ending amount of unrecognized tax benefits
is as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<div align="left">
	<table border="0" style="border-collapse: collapse" width="64%" id="table3">
		<tr>
			<td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
			Balance at July 1, 2008</p></td>
			<td width="307" align="right">$114,000&nbsp;</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
			Additions based on tax positions related to the current year</p>
			</td>
			<td width="307" align="right">0&nbsp;</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>Additions
for tax positions of prior years</p></td>
			<td width="307" align="right">$&nbsp; 15,000 &nbsp;</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-left:0in; margin-right:0in; margin-top:0in'>
			Reductions for tax positions of prior years</p></td>
			<td width="307" align="right">0&nbsp;</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
			Reduction for Settlements</p></td>
			<td width="307" align="right">($ 41,000)</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;
			</p></td>
			<td width="307" align="right">-----------</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td width="1065">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
			Balance at September 30, 2008</p></td>
			<td width="307" align="right">$&nbsp; 88,000&nbsp;</td>
		</tr>
	</table>
</div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>7</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We recognize
accrued interest and penalties related to unrecognized tax benefits in income
tax expense. As of September 30, 2008, we had
approximately $26,000 in accrued interest and penalties which is included as a
component of the $88,000 unrecognized tax benefit noted above. The liability
for the payment of interest and penalties has increased by approximately
$15,000 for the three months ended September 30, 2008.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Pro-Dex and its
subsidiary are subject to U.S. federal income tax, as well as income tax of
multiple state tax jurisdictions. We are currently
open to audit under the statute of limitations by the Internal Revenue Service
for the years ended June 30, 2007 through June 30, 2008.&nbsp; The Company&#146;s state
income tax returns are open to audit under the statute of limitations for the
years ended June 30, 2004 through June 30, 2008. The company does not
anticipate a significant change to the total amount of unrecognized tax
benefits within the next 12 months.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SHARE-BASED COMPENSATION</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Share-based compensation expense recognized under SFAS 123(R) for the
three months ended September 30, 2008 and 2007 was $42,000 and $48,000,
respectively, which was related to stock options and restricted stock grants vesting
in 2008 and 2007.&nbsp; Share-based compensation expense reduced our results of
operations as follows: </p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=647
 style='width:90%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="4%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b>&nbsp;</b></p></td>
			<td width="62%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="14%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="13%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.4pt'>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='padding:1.1pt;
  height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(unaudited)</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Share-based&nbsp;compensation&nbsp;expense&nbsp;recognized:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td width="4%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>General&nbsp;and&nbsp;administrative,&nbsp;options</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13,000&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>19,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td width="4%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>General&nbsp;and&nbsp;administrative,&nbsp;restricted&nbsp;stock</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>29,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>29,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Subtotal&nbsp;expense</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>48,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td width="4%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Related&nbsp;deferred&nbsp;tax&nbsp;benefit</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(12,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(12,000)</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Decrease&nbsp;in&nbsp;net&nbsp;income</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-top:2.25pt double windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>30,000&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>36,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.4pt'>
			<td width="4%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="62%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:7.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Decrease&nbsp;in&nbsp;basic&nbsp;earnings&nbsp;per&nbsp;share</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.00&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.00&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Decrease&nbsp;in&nbsp;diluted&nbsp;earnings&nbsp;per&nbsp;share</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="14%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.00&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.00&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As of September 30, 2008, there was $98,736 of total unrecognized
compensation cost related to 146,750 non-vested outstanding stock options with
a per share weighted average price of $1.46.&nbsp; The unrecognized expense is
anticipated to be recognized on a straight-line basis over a weighted average
period of 1.0 years. &nbsp;The following is a summary of stock option activity in
the three months ending September 30:</p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=709
 style='width:100%;border-collapse:collapse' id="table4">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  padding:1.1pt;height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:.35in'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:.35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:.35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:
  .35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:.35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:.35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:.35in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<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:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fixed&nbsp;Options</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Shares</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise&nbsp;Price</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Shares</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise&nbsp;Price</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Outstanding&nbsp;at&nbsp;beginning&nbsp;of&nbsp;fiscal&nbsp;year&nbsp;(7/1)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,109,500&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.58&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,038,500&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.60&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Granted</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>30,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.96&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>30,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.55&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Exercised</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.8pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Forfeited</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Outstanding&nbsp;at&nbsp;end&nbsp;of&nbsp;period&nbsp;(9/30)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,139,500&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.58&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,068,500&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.60&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Exercisable&nbsp;at&nbsp;end&nbsp;of&nbsp;period&nbsp;(9/30)</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>992,750&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.60&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>881,250&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.56&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Weighted-average&nbsp;fair&nbsp;value&nbsp;per</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<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:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Option&nbsp;granted&nbsp;during&nbsp;the&nbsp;period</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.45&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.81&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>8</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>The following
table summarizes information regarding options outstanding and options
exercisable at September 30, 2008: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=716
 style='width:100%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
			<b>&nbsp;</b></p></td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Options&nbsp;Outstanding</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=5 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Options&nbsp;Exercisable</p>
			</td>
		</tr>
		<tr style='height:28.25pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
			<td colspan=2 valign=bottom style='border:medium none;
  padding:1.1pt;height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Aggregate</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:
  28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:28.25pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Aggregate</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Range&nbsp;of</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Number</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Remaining</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Intrinsic</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Number</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Intrinsic</p>
			</td>
		</tr>
		<tr style='height:16.6pt'>
			<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:1.1pt;height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise&nbsp;Price</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Outstanding</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Contractual&nbsp;Life</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Price</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Value</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Outstanding</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Price</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Value</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.1pt' align="left">
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>$0.42&nbsp;to&nbsp;$0.81</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>260,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>3.5&nbsp;years</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.70&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>65,400&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>260,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.70&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>65,400&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.1pt' align="left">
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>$1.08&nbsp;to&nbsp;$1.56</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>462,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>6.4&nbsp;years</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.32&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>450&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>327,750&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.15pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.15pt' align="left">
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>$1.74&nbsp;to&nbsp;$2.18</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>242,500&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>3.5&nbsp;years</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.04&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>242,500&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.04&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:14.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:16.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:16.6pt' align="left">
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>$2.44&nbsp;to&nbsp;$3.30</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>175,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>6.8&nbsp;years</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.77&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>162,500&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.79&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:16.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;padding:1.1pt;height:14.1pt' align="left">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,139,500&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>5.2&nbsp;years</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.58&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>65,850&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>992,750&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.60&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>65,400&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Restricted Stock</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following is a summary of restricted share activity in the three months
ending September 30:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=730
 style='width:95%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="44%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
			</td>
			<td width="9%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="4%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="11%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="5%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="11%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td width="5%" valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:24.7pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:
  24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-Average</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:24.7pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Weighted-</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Restricted&nbsp;shares</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Shares</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise&nbsp;Price</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Shares</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Exercise&nbsp;Price</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Outstanding&nbsp;at&nbsp;beginning&nbsp;of&nbsp;fiscal&nbsp;year&nbsp;(7/1)</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>170,000&nbsp;</p>
			</td>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border:medium none;padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>255,000&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Granted</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Issued</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.55pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;Forfeited</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.55pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Outstanding&nbsp;at&nbsp;end&nbsp;of&nbsp;period&nbsp;(9/30)</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>170,000&nbsp;</p>
			</td>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border:medium none;padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>255,000&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='padding:1.1pt;
  height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td width="44%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Exercisable&nbsp;at&nbsp;end&nbsp;of&nbsp;period&nbsp;(9/30)</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>120,417&nbsp;</p>
			</td>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1.38&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="9%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:12.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As of September 30, 2008, there was $166,175 of total unrecognized
compensation cost related to 120,417 non-vested outstanding restricted shares
with a per share weighted average price of $1.38.&nbsp; The unrecognized expense is
anticipated to be recognized on a straight-line basis over a period of 1.4 years.&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Stock Warrants </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>At September 30,
2008, warrants to acquire 100,000 shares of common stock were outstanding.
These warrants are fully vested, have a weighted-average exercise price of
$1.25 and a weighted-average remaining life of 0.75 years.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MAJOR CUSTOMERS</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We had two major customers (defined as a customer that represents greater
than 10% of the Company&#146;s total revenues) in the three months ended September
30, 2008 and 2007.&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=514
 style='width:80%;border-collapse:collapse' id="table5">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
			<b>&nbsp;</b></p></td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=9 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=5 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(unaudited)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</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:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:15.15pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Revenues</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Accts.&nbsp;Rec.</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:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Revenues</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Accts.&nbsp;Rec.</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Customer&nbsp;1</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,046,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>409,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,319,000&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>431,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Customer&nbsp;2</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,408,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>978,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,235,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>563,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:12.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>9</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>COMMITMENTS AND CONTINGENCIES</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our manufacture and distribution of certain products involves a risk of
legal action, and, from time to time, we are named as defendants in lawsuits.
It is not reasonably possible to estimate the awards or damages, or the range
of awards or damages, if any, we might incur in connection with such
litigation.&nbsp; Other than the case pending with the Orange County Water District,
management is not aware of any material actual, pending or threatened
litigation at this time.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On June 23,
2008, the Orange County Water District (&#147;OCWD&#148;) filed a complaint in the
Superior Court of the State of California in the County of Orange concerning
remediation of alleged ground water contamination in the Orange County
Groundwater South Basin; <u>Orange County Water District v. Sabic Innovative Plastics
U.S. LLC, et al.</u>, Case No. 00078246.&nbsp; The South Basin underlies parts of
Santa Ana, California and adjacent cities.&nbsp; The complaint identifies 17 named
defendants, including Pro-Dex, and also designates 400 unnamed Doe defendants.&nbsp;
..&nbsp; The Company moved out of this Santa Ana site in April, 2008 and has no
remaining operations there.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The complaint
alleges that the defendants contaminated the South Basin with volatile organic
chemicals (&#147;VOCs&#148;) and perchlorate through various activities at properties
each defendant now controls or has controlled in the past.&nbsp; Through its
lawsuit, the OCWD seeks compensatory relief for all its own remedial
activities, and injunctive relief to compel the defendants to undertake
remedial activities in general.&nbsp; The complaint does not, however, specify any
remedial activities that the OCWD has undertaken to date or any remedial
activities that it seeks any particular defendants to undertake.&nbsp; Moreover,
from our investigation of OCWD&#146;s remedial activities to date, we have
determined that the OCWD is in the early stages of its remedial investigation
for the South Basin groundwater contamination.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As noted above,
16 other entities are named defendants in this case along with Pro-Dex.&nbsp; While
some are small businesses, others are larger corporations or their
subsidiaries.&nbsp; Further, as this case progresses, the OCWD is likely to add at
least a few more named defendants to the case from the 400 Doe defendants it
has designated in the current complaint.&nbsp; In the indeterminable event that
Pro-Dex would be held liable in the case, OCWD&#146;s total recovery probably would
be allocated among several defendants, each of which would pay only a
proportionate share of that total recovery.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Because of the
vagueness of the complaint, the early stage of the OCWD&#146;s remedial activities
in the South Basin, and the likelihood that any recovery the OCWD may gain will
be allocated among several defendants, our liability, as well as our costs of
defending, monitoring and concluding our involvement in this case are
uncertain, and those costs cannot now be estimated.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUBSEQUENT EVENT</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;On October
1, 2008, we converted the full $2,000,000 available under the term commitment
portion of the credit facility from the open credit facility to the term
commitment.&nbsp; This facility is expected to be converted to a five year term loan
in November 2008, and amortized and repaid over 60 months. &nbsp;Its initial terms were
to require monthly interest payments at the prime rate of interest (5.0% at
September 30, 2008); or LIBOR (4.0% at September 30, 2008) plus 2.0%, at our
discretion, based on outstanding borrowings, but now are expected to be
effectively fixed at a rate of approximately 5.9%. &nbsp;As of November 11, 2008,
the conversion to a five-year loan has not taken place and the amount borrowed remains
as a short term credit line with the interest rates at the prime rate of
interest; or LIBOR plus 2.0%, at our discretion.&nbsp; &nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>10</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>COMPANY OVERVIEW</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following discussion and analysis provides information that the
Company's management believes is relevant to an assessment and understanding of
our results of operations and financial condition for each of the three month
periods ended September 30, 2008 and 2007.&nbsp; This discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this Report. This Report contains certain forward-looking
statements and information. The cautionary statements included herein should be
read as being applicable to all related forward-looking statements wherever
they may appear.&nbsp; Our actual future results could differ materially from those
discussed herein.&nbsp; Our critical accounting policies relate to inventory valuation
for slow moving items, impairment of goodwill, warranty reserves, and
recoverability of deferred income taxes.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Except for the historical information contained herein, the matters
discussed in this Quarterly Report on Form 10-Q, including discussions of our
product development plans, business strategies and market factors influencing
our results, are forward-looking statements that involve certain risks and
uncertainties. Actual results may differ from those anticipated by us as a
result of various factors, both foreseen and unforeseen, including, but not
limited to, our ability to continue to develop new products and increase
systems sales in markets characterized by rapid technological evolution,
consolidation within our target marketplace and among our competitors, and
competition from larger, better capitalized competitors.&nbsp; Many other economic,
competitive, governmental and technological factors could impact our ability to
achieve our goals.&nbsp; Interested persons are urged to review the risks described
herein, as well as in our other public disclosures and filings with the
Securities and Exchange Commission.&nbsp; We refer you to the risk factors and
cautionary language contained in our reports filed with the Securities and
Exchange Commission from time to time, including, but not limited to, those
risks and uncertainties which may be listed in our Annual Report on Form 10-K
or 10-KSB.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Pro-Dex, Inc.
(&#147;Company,&#148; &#147;Pro-Dex&#148;, &#147;we,&#148; &#147;our,&#148;, &#147;us&#148;), with
operations in Irvine, California, Beaverton, Oregon and Carson City, Nevada, provides
a pathway to product solutions never envisioned by customers.&nbsp; A unique
blend of creativity and systemic discipline enables us to develop and
manufacture innovative designs that powerfully complete a customer&#146;s strategic
product offering. Pro-Dex leverages extraordinary human collaboration and
superior technical capability to power and control products used in medical,
aerospace, military, research and industrial applications requiring high
precision in harsh environments.&nbsp; With expertise in multi-axis motion
control, fractional horsepower motors and rotary drive systems, we identify and
create unexpected value for our customers.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Pro-Dex's products are found in hospitals,
dental offices, medical engineering labs, commercial and military aircraft,
scientific research facilities and high tech manufacturing operations around
the world. The names of Micro Motors, Oregon Micro Systems, and Astromec
are used for marketing purposes as brand names.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Pro-Dex&#146;s principal headquarters changed April 28, 2008 and we are
located at 2361 McGaw Avenue, Irvine, California 92614 and our phone number
also changed to 949-769-3200.&nbsp; Our Internet address is  www.pro-dex.com .&nbsp; Our annual reports on Form
10-KSB, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments
to those reports and other SEC filings, are available free of charge through
our website as soon as reasonably practicable after such reports are
electronically filed with, or furnished to, the SEC.&nbsp; In addition, our Code of
Ethics and other corporate governance documents may be found on our website at
the Internet address set forth above.&nbsp; Our filings with the SEC may also be read and copied at the SEC&#146;s Public Reference Room at 100
F Street, N.E., Washington, D.C. 20549.&nbsp; You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.&nbsp;
The SEC maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC at  www.sec.gov . </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>11</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Description of Business</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The majority of our revenue is derived from designing, developing and
manufacturing rotary drive systems for the medical device and dental
industries, motion control software and hardware for industrial and scientific
applications and fractional horsepower DC motors for aerospace, medical and
military applications. A large part of the revenue of the Company has been driven
by developing and selling numerous types of private label rotary drive systems
for use in dental procedures, as well as cranial, spinal, arthroscopic and
orthopedic surgery.&nbsp; The Company distributes its own line of pneumatic and
electric dental hand pieces sold under the Micro Motors name utilizing a
network of independent sales representatives across North America.&nbsp; Other
revenue sources include designing and manufacturing miniature pneumatic motors,
fractional horsepower DC motors and motion control systems for industrial
applications in the automotive, aerospace, and apparel industries.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Company-funded research and development supports the development of
generic rotary drive, motion control, and electric motor technology platforms.&nbsp;
Company-funded research and development projects are generally expected to
convert to customer-funded projects within six to eighteen months.&nbsp; Company
funded project costs not associated with signed contracts or purchase orders
are expensed as incurred.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In the three months ended September 30, 2008, $731,000 was expensed for
company-funded research and development; an increase of $156,000 from the $575,000
expensed in the three months ended September 30, 2007.&nbsp; The increase was
attributable to increased labor costs for medical and small motor product
development, improvement and validation.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>We seek customer-funded projects to customize these
platforms to specific customer requirements.&nbsp; For customer-funded development
projects, costs are capitalized and recognized as a cost of sales when specific
deliverables within the development contracts are earned, matching the costs to
the revenue.</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=473
 style='width:75%;border-collapse:collapse' id="table6">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Customer-funded</p>
			</td>
			<td colspan=6 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>development&nbsp;($'000)</p>
			</td>
			<td colspan=3 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.35pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Revenue</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>132&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border:medium none;padding:1.1pt;
  height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>92&nbsp;</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:1.1pt; height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cost&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>57&nbsp;</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:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>31&nbsp;</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:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;margin</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>75&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>57%&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>61&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>66%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.3pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:
0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>Customer-funded research and development fees
increased in the quarter ended September 30, 2008 due to work being completed
on projects signed in the preceding 12 months.&nbsp; The results of customer-funded
development work are intended to provide long-term exclusive manufacturing
agreements and may provide the customer with the retention of the intellectual
property developed.&nbsp; The identity of our customers is generally protected by a
non-disclosure agreement.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>12</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>The
Company&#146;s revenue is derived from five main customer types.&nbsp; The proportion of
total sales to each customer type and sales by location are noted in the tables
below (unaudited):</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=507
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=6 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Sales&nbsp;by&nbsp;customer&nbsp;type&nbsp;($'000)</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Dental</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>731&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13%&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>963&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>16%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Medical</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,676&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>47%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,918&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>49%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.15pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Industrial</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>944&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>17%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,001&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>17%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.15pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Aerospace</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>765&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>14%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>563&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Government,&nbsp;repairs&nbsp;and&nbsp;other</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>540&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>547&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;Sales</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,656&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,992&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:
0in;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Medical product sales represent the manufacture of products that utilize
proprietary designs developed by us under exclusive design and supply
agreements.&nbsp; Our dental products are primarily sold to original equipment
manufacturers and dental product distributors.&nbsp; An independent dealer network
markets our own branded line of dental products; including the Intraflow<sup>TM</sup>
dental anesthesia product.&nbsp; We also design and manufacture embedded multi-axis
motion controllers used to regulate the motion of servo and stepper motors, predominantly
for the factory automation, scientific research, and medical analysis equipment
industries.&nbsp; The controllers support the platforms for PCI, VME, ISA, and cPCI
busses as well as stand-alone requirements.&nbsp; In addition, we make and sell
pneumatic motors for industrial applications that are marketed directly to
end-users and through industrial supply distributors.&nbsp; The Carson City products
include high reliability fractional horsepower DC motors designed for harsh
environments, primarily for the aerospace and medical markets.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We hold the following three independently verified certifications: ISO
9001:2000, ISO 13485 revised 1998, and Medical Device Directive 93\42\EEC Annex
II company.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>At the present time, we are generally able to fill orders within sixty
(60) days.&nbsp; At September 30, 2008, we had a backlog, including orders for
delivery beyond 60 days, of $8.0 million compared with a backlog of $9.4
million at September 30, 2007 and $10.4 million at June 30, 2008.&nbsp; We expect to
ship most of our backlog in fiscal year 2009 and the remainder in fiscal year 2010.&nbsp;
The decreased backlog compared to September 2007 and June 2008 is due to normal
fluctuations in the timing of receipt and shipment of orders.&nbsp; We do not
typically experience seasonal fluctuations in our new order bookings, but may
experience variability in our new order bookings due to the timing of major new
product launches.&nbsp; Similarly, we do not typically experience seasonal
fluctuations in our shipments and revenues.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>13</p>
			</td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'><b>RESULTS OF OPERATIONS </b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>For the Three-Month periods
ended September 30, 2008 and 2007</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>The following table sets forth the
periods indicated and the percentage of net revenues represented by each item
in our Consolidated Statements of Operations. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=609
 style='width:90%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>(In&nbsp;Thousands)</p>
			</td>
			<td colspan=6 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:14.05pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;sales:</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,656&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,992&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cost&nbsp;of&nbsp;sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,902&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>69%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,839&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>64%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.05pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,754&nbsp;</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:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>31%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,153&nbsp;</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:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>36%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Selling,&nbsp;general&nbsp;and&nbsp;administrative&nbsp;expenses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,179&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,058&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>18%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Research&nbsp;and&nbsp;development&nbsp;costs</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>731&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>575&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.05pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Income&nbsp;from&nbsp;Operations</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(156)</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:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-3%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>520&nbsp;</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:1.1pt; height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;interest&nbsp;and&nbsp;other&nbsp;expense</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>59&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>35&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.05pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Earnings&nbsp;before&nbsp;provision&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(215)</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-4%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>485&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>8%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</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:1.1pt; height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Provision&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(97)</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-2%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>159&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;income</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(118)</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-2%&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>326&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.35pt'>
			<td valign=bottom style='padding:1.1pt;
  height:7.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:7.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:7.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='padding:1.1pt;
  height:7.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:1.1pt;
  height:7.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Net Sales.</b>&nbsp;
Consolidated sales decreased from $5,992,000 to $5,656,000 ($336,000 or 6%) for
the quarter ended September 30, 2008 compared to the quarter ended September 30,
2007.&nbsp; The decrease was due to a reduced volume of a single medical customer,
offsetting increases in revenues to the aerospace customers.&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Although
selective price increases and decreases were implemented in response to market
conditions, the majority of the sales changes for each product line are due
primarily to changes in sales volume, not the effect of price changes. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Gross Profit and Gross Profit Percentage of Sales</b>.&nbsp; Our
consolidated gross profit for the quarter ended September 30, 2008 decreased $399,000
or 19% over the same quarter in the previous year due to the lower level of
sales and a less favorable sales mix.&nbsp; Gross profit as a percentage of sales
decreased to 31% for the quarter ended September 30, 2008 compared to 36% for
the quarter ended September 30, 2007.&nbsp; Gross profit margins were reduced
approximately 5 margin points also due to a less favorable sales mix. &nbsp;Gross
profit and gross profit as a percentage of sales were as follows: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=568
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="43%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
  text-autospace:none'><b>&nbsp;</b></p></td>
			<td width="3%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="16%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="6%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="13%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="17%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.85pt'>
			<td width="43%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td width="17%" valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.8pt'>
			<td width="43%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td width="17%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Decrease</p>
			</td>
		</tr>
		<tr style='height:14.85pt'>
			<td width="43%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit</p>
			</td>
			<td width="3%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,754,000&nbsp;</p>
			</td>
			<td width="6%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,153,000&nbsp;</p>
			</td>
			<td width="17%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-19%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.85pt'>
			<td width="43%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>31%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>36%&nbsp;</p>
			</td>
			<td width="17%" valign=bottom style='padding:1.1pt;
  height:14.85pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			14</p></td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Selling, General and Administrative Costs (S, G&amp;A)</b>.&nbsp;
Consolidated S, G &amp; A expenses increased to $1,180,000 for the quarter
ended September 30, 2008 from $1,058,000 for the quarter ended September 30,
2007.&nbsp; The increase in selling expense is mainly due to higher labor and labor
related costs ($14,000) and higher advertising costs ($10,000). The increase in
G &amp; A costs was due to higher labor costs ($50,000) and costs associated
with Sarbanes Oxley compliance ($61,000).&nbsp; As a percentage of sales, S, G&amp;A
expenses increased to 21% of sales from 18% of sales for the quarters ended September
30, 2008 and 2007, respectively.&nbsp; S, G&amp;A costs were as follows:</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=531
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="49%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td width="4%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="13%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="6%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="11%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="15%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td width="49%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td width="15%" valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.8pt'>
			<td width="49%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td width="49%" valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Selling</p>
			</td>
			<td width="4%" valign=bottom style='padding:1.1pt;
  height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>344,000&nbsp;</p>
			</td>
			<td width="6%" valign=bottom style='padding:1.1pt;
  height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>323,000&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>7%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td width="49%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>General&nbsp;and&nbsp;administrative</p>
			</td>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>836,000&nbsp;</p>
			</td>
			<td width="6%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>735,000&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>14%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.8pt'>
			<td width="49%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;S,&nbsp;G&amp;A</p>
			</td>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,180,000&nbsp;</p>
			</td>
			<td width="6%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="11%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,058,000&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.8pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>12%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:14.75pt'>
			<td width="49%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>S,&nbsp;G&amp;A&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>18%&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='padding:1.1pt;
  height:14.75pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Research and
Development (R&amp;D) Costs</b>. &nbsp;Company-funded research and development
expenses increased $156,000 to $731,000 for the quarter ended September 30,
2008 from $575,000 for the quarter ended September 30, 2007, an increase of 27%.&nbsp;
The increase was due to approximately $125,000 in higher labor and related costs
and $22,000 in independent research project costs associated with engineers
working on company-funded projects.&nbsp; As a percentage of sales, company-funded
research &amp; development expenses increased to 13% of sales from 10% of sales
for the quarters ended September 30, 2008 and 2007, respectively.&nbsp;
Company-funded research and development costs were as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=553
 style='width:75%;border-collapse:collapse'>
		<tr style='height:15.4pt'>
			<td colspan=6 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:medium none windowtext; padding:1.1pt; height:15.4pt'>&nbsp;</td>
		</tr>
		<tr style='height:15.35pt'>
			<td width="49%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:medium none windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>&nbsp;</td>
			<td colspan=4 valign=bottom style='border-top:1px solid #000000;
  border-left:medium none;border-bottom:medium none windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td width="15%" valign=bottom style='border-top:1px solid #000000;border-left:
  medium none;border-bottom:medium none windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>&nbsp;</td>
		</tr>
		<tr style='height:15.35pt'>
			<td width="49%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.35pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase</p>
			</td>
		</tr>
		<tr style='height:15.4pt'>
			<td width="49%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Research&nbsp;and&nbsp;Development&nbsp;costs</p>
			</td>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>731,000&nbsp;</p>
			</td>
			<td width="5%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="12%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>575,000&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>27%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.4pt'>
			<td width="49%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>R&nbsp;&amp;&nbsp;D&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10%&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='padding:1.1pt;
  height:15.4pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Operating
Profit (loss) and Operating Profit (loss) </b><b>Percentage of Sales</b>.&nbsp;
Our consolidated operating loss for the quarter ended September 30, 2008 was
($156,000) compared to an operating profit of $520,000 for the same quarter in
the previous year.&nbsp; The decrease in operating profit was due to a lower gross
profit caused by lower sales as previously described,, higher R&amp;D costs and
higher S,G&amp;A.&nbsp; Consequently, operating loss as a percentage of sales was -3%
for the quarter ended September 30, 2008 compared to a 9% profit for the
quarter ended September 30, 2007.&nbsp; Operating profit and margin were as follows:
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=606
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td width="50%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
  text-autospace:none'><b>&nbsp;</b></p></td>
			<td width="4%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="13%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="5%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="12%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width="15%" valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="50%" valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Three&nbsp;Months&nbsp;Ended&nbsp;September&nbsp;30,</p>
			</td>
			<td width="15%" valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="50%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Decrease)</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="50%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Operating&nbsp;Profit</p>
			</td>
			<td width="4%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="13%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(156,000)</p>
			</td>
			<td width="5%" valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td width="12%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>520,000&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-130%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.2pt'>
			<td width="50%" valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Operating&nbsp;Profit&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-3%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9%&nbsp;</p>
			</td>
			<td width="15%" valign=bottom style='padding:1.1pt;
  height:15.2pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Royalties and Other Income. </b>&nbsp;We received $1,600 in royalty income
in the three months ended September 30, 2008 compared to $5,800 in the same
period during the prior year. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Net Interest Expense. </b>&nbsp;Net interest expense for the quarter ended September
30, 2008 was $61,000 compared to $43,000 in the quarter ended September, 2007,
due to the higher debt levels through the quarter ended September 30, 2008.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Income Tax (Benefit) Provision</b>. Our estimated effective combined
federal and state tax rate on income from operations for the quarter ended September
30, 2008 resulted in a 45% credit of earnings before tax compared to a 33%
provision of earnings before tax for the quarter ended September 30, 2007. &nbsp;The
2008 rate is reduced by a recalculation of the FIN 48 estimated tax and
interest liability and the 2007 rate is reduced due to the use of estimated
R&amp;D state tax credits.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			15</p></td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Net (Loss) Income.</b>&nbsp; Our net (loss) income for the three months
ended September 30, 2008 was ($118,000) or ($0.01) per share on a basic and
diluted basis, as compared to a net income of $326,000 or $0.03 per share on a
basic and diluted basis for the three months ended September 30, 2007.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Liquidity and Capital
Resources</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following table presents selected financial information as of the end
of quarters ended September&nbsp;30, 2008 and 2007 as well as of the year ended
June 30, 2008:</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=660
 style='width:90%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  height:.05pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.65pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>As&nbsp;of&nbsp;September&nbsp;30,</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>As&nbsp;of</p>
			</td>
		</tr>
		<tr style='height:15.6pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2008</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2007</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2008</p>
			</td>
		</tr>
		<tr style='height:15.65pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;and&nbsp;cash&nbsp;equivalents</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>384,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>781,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>517,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.6pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Working&nbsp;Capital&#185;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,544,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,621,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,586,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.65pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Credit&nbsp;Line&nbsp;outstanding&nbsp;balance</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,600,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,000,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.6pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Tangible&nbsp;book&nbsp;value/common&nbsp;share&#178;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.92&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.91&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0.93&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.65pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Number&nbsp;of&nbsp;days&nbsp;of&nbsp;sales&nbsp;outstanding&nbsp;(DSO)&nbsp;in</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding:1.1pt; height:15.65pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.6pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			accounts&nbsp;receivable&nbsp;at&nbsp;end&nbsp;of&nbsp;quarter&#179;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>51&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>45&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding:1.1pt;height:15.6pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>48&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<sup>&nbsp;</sup></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-autospace:
none'><sup>1</sup> Working Capital = Ending Current Assets less Ending Current
Liabilities.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-autospace:
none'><sup>2</sup> Tangible book value/common share<sup> </sup>= (Total
shareholders&#146; equity &#150; Net intangible asset (patents) - Goodwill) / (basic
outstanding shares).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-autospace:
none'><sup>3</sup> DSO = Ending Net Accounts Receivable balance / (Previous
Quarter Sales / 91).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our working capital at September 30, 2008 decreased to $4.5 million
compared to $6.6 million at September 30, 2007 and $4.6 million at June 30, 2008.&nbsp;
Cash flow used by operations was $458,000 in the three months ended September
30, 2008 compared to a cash flow provided by operations of $1,092,000 for the three
months ended September 30, 2007.&nbsp; The decrease in working capital and reduction
in operating cash flow was due to an increase in A/R, a reduction in payables and
accrued expenses within our normal payment processing cycle.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>On November 1,
2007, our existing credit facility with Wells Fargo was replaced with an
expanded facility with a total borrowing capacity of $6,562,500.&nbsp; Included in
the increase is an increase in the credit line borrowing availability from
$2,000,000 to $4,000,000.&nbsp; The credit line&#146;s terms require monthly interest
payments at the prime rate of interest (5.00% at September 30, 2008); or LIBOR
(4.0% at September 30, 2008) plus 1.75%, at our discretion, based on
outstanding borrowings.&nbsp; The total effective interest rate at September 30,
2008 for borrowings on the credit line was 5.0%.&nbsp; The credit facility expires
on November 1, 2009.&nbsp; In addition to the credit line, a term commitment is
available for borrowings for amounts up to $2,000,000.&nbsp; We can take advances
against this commitment through November 1, 2008, at which time the outstanding
borrowings against this commitment will be converted to a term loan, to be
amortized and repaid over 60 months. &nbsp;The term commitment&#146;s terms require
monthly interest payments at the prime rate of interest; or LIBOR plus 2.0%, at
our discretion, based on outstanding borrowings.&nbsp; The borrowings from this term
commitment were used for construction financing of tenant improvements for our
Irvine, California facility.&nbsp; The term loan that was entered into in January
2006 to finance the Astromec purchase remains in place.&nbsp; As of September 30,
2008, there was a principal balance on this term loan of $333,333 which is
required to be fully paid-off in January 2010, in accordance with its
amortization schedule.&nbsp; The term loan&#146;s terms require monthly interest payments
at the prime rate of interest; or LIBOR plus 2.5%, at our discretion, based on
outstanding borrowings, with no minimum interest charge.&nbsp; The total effective
interest rate at September 30, 2008 for borrowings on the term loan was 5.0%.&nbsp;
All assets of the Company except our Carson City land and building secure the
outstanding borrowings from Wells Fargo. There was $2,600,000 borrowed under
the credit line and nothing borrowed against term commitment facility as of
September 30, 2008.&nbsp; The total eligible additional borrowing capacity at
September 30, 2008 was $3,400,000.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			16</p></td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>At September 30,
2008, we had cash and cash equivalents of $384,000.&nbsp; We believe that our
cash and cash equivalents on hand, together with cash flows from operations, if
any, and amounts available under the credit facilities will be sufficient to
meet our working capital and capital expenditure requirements for this and the
next year.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In September
2002, our Board of Directors authorized the repurchase on the open market of up
to 500,000 shares of our outstanding Common Stock at a share price no greater
than $1.25, subject to compliance with applicable laws and regulations.&nbsp; There
is no requirement that we repurchase all or any portion of such shares.&nbsp; The
maximum total value of the repurchase is not to exceed $500,000.&nbsp; From the
inception of the repurchase authorization through the fiscal year-end date of
June 30, 2003, we repurchased 75,700 shares of Common Stock for $43,741, at an
average price of $0.58 per share.&nbsp; No additional shares were repurchased in
fiscal years 2004 through 2008. &nbsp;We started repurchasing shares again in the
first quarter of fiscal year 2009.&nbsp; During the quarter, we repurchased 64,929
shares of common stock for $58,924, at an average price of $.91 per share.
Since the initiation of the buyback in 2002 through September 30, 2008, we have
repurchased 140,299 shares for $102,665 at an average price of $0.73 per share.
&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Item 3. Quantitative and Qualitative Disclosures About Market Risk</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>Not
applicable.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Item 4.
Controls and Procedures</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp; The Chief
Executive Officer and Chief Financial Officer (the principal executive officer
and principal financial officer, respectively) conducted an evaluation of the
design and operation of our &#147;disclosure controls and procedures&#148; (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (&#147;Exchange Act&#148;)).&nbsp; Based on that evaluation for the quarter ended September
30, 2008, the Chief Executive Officer and Chief Financial Officer concluded
that the disclosure controls and procedures are effective to ensure that information
required to be disclosed by use in the reports filed or submitted by us under
the Exchange Act is accumulated, recorded, processed, summarized and reported
to management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, and to allow timely decisions regarding whether or not
disclosure is required.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>During the
quarter ended September 30, 2008, there were no changes in our internal
controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			17</p></td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br
clear=all style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>PART II</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>OTHER
INFORMATION</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><font size="3">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal Proceedings
</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On June 23, 2008, the Orange County Water
District (&#147;OCWD&#148;) filed a complaint in the Superior Court of the State of
California in the County of Orange concerning remediation of alleged ground
water contamination in the Orange County Groundwater South Basin; <u>Orange
County Water District v. Sabic Innovative Plastics U.S. LLC, et al.</u>, Case
No. 00078246.&nbsp; The South Basin underlies parts of Santa Ana, California
and adjacent cities.&nbsp; The complaint identifies 17 named defendants,
including Pro-Dex, and also designates 400 unnamed Doe defendants.&nbsp;
<font style="font-size: 10.0pt">The Company moved out of this Santa Ana site in April,
2008 and has no remaining operations there.</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The complaint alleges that the defendants
contaminated the South Basin with volatile organic chemicals (&#147;VOCs&#148;) and
perchlorate through various activities at properties each defendant now
controls or has controlled in the past.&nbsp; Through its lawsuit, the OCWD
seeks compensatory relief for all its own remedial activities, and injunctive
relief to compel the defendants to undertake remedial activities in
general.&nbsp; The complaint does not, however, specify any remedial activities
that the OCWD has undertaken to date or any remedial activities that it seeks
any particular defendants to undertake.&nbsp; Moreover, from our investigation
of OCWD&#146;s remedial activities to date, we have determined that the OCWD is in
the early stages of its remedial investigation for the South Basin groundwater
contamination. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As noted above, 16 other entities are
named defendants in this case along with Pro-Dex.&nbsp; While some are small
businesses, others are larger corporations or their subsidiaries.&nbsp;
Further, as this case progresses, the OCWD is likely to add at least a few more
named defendants to the case from the 400 Doe defendants it has designated in
the current complaint.&nbsp; In the indeterminable event that Pro-Dex would be
held liable in the case, OCWD&#146;s total recovery probably would be allocated
among several defendants, each of which would pay only a proportionate share of
that total recovery. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Because of the vagueness of the complaint,
the early stage of the OCWD&#146;s remedial activities in the South Basin, and the
likelihood that any recovery the OCWD may gain will be allocated among several
defendants, our liability, as well as our costs of defending, monitoring and
concluding our involvement in this case are uncertain, and those costs cannot
now be estimated. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In general, we are from time to time a
party to various legal proceedings incidental to our business, other than the
above, none of which we consider may be material at this time.&nbsp; There can
be no certainty that we may not ultimately incur liability or that such
liability will not be material and adverse. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>
<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font size="3"><b>Item 2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unregistered Sales of
Equity Securities and Use of Proceeds. </b>&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>ISSUER PURCHASES OF SECURITIES</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The table below sets forth
information with respect to purchases of the Company&#146;s common stock made by or
on behalf of the Company during the quarter ended September 30, 2008.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="left">
	<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border-collapse:collapse !msorm;
 border:0px none msorm; ' width="100%">
		<tr>
			<td valign=bottom style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
			<b>Period</b></p></td>
			<td valign=bottom style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>(a)<br><br><br><br><br>Total Number of <br>
			Shares Purchased</b></p></td>
			<td valign=bottom style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>(b)<br><br><br><br><br>&nbsp;Average Price Paid<br>
			Per Share</b></p></td>
			<td valign=bottom style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>(c)<br><br>Total Number of <br>
			Shares Purchased as <br>
			Party of Publicly <br>
			Announced Plans or<br>
  Programs</b></p></td>
			<td valign=bottom style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
			<b>(d)<br>Maximum Number (or <br>
			Approximate Dollar <br>
			Value) of Shares that <br>
			May Yet be
  Purchased <br>
			Under the Plans or <br>
			Programs</b></p></td>
		</tr>
		<tr>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>July 1-31, 2008</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>15,700</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$0.99</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>91,400</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>408,600 ($440,719)</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>August 1-31, 2008</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>7,000</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$0.94</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>98,400</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>401,600 ($434,109)</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>September 1-30, 2008</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42,229</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$0.87</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>140,629</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>359,371 ($397,335)</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>Total</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>64,929</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$0.91</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>140,629</p>
			</td>
			<td valign=top style='border-color:msorm; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>359,371 ($397,335)</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>In September 2002, our Board of Directors authorized
the repurchase on the open market of up to 500,000 shares of our outstanding
Common Stock at a share price no greater than $1.25, subject to compliance with
applicable laws and regulations.&nbsp; There is no requirement that we repurchase
all or any portion of such shares.&nbsp; The maximum total value of the repurchase
is not to exceed $500,000.&nbsp; This repurchase is to be financed with cash
generated by operations.&nbsp; From the inception of the repurchase authorization
through the fiscal year-end date of June 30, 2003, we repurchased 75,700 shares
of Common Stock for $43,741, at an average price of $0.58 per share.&nbsp; No
additional shares were repurchased in fiscal years 2004 through 2008.&nbsp; We
started repurchasing shares again in the first quarter of fiscal year 2009.&nbsp;
During the quarter, we repurchased 64,929 shares of common stock for $58,924,
at an average price of $0.91 per share. Since the initiation of the buyback in
2002 through September 30, 2008, we have repurchased 140,629 shares for
$102,665 at an average price of $0.73 per share.&nbsp; </p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			18</p></td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>
<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font size="3"><b>Item 3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defaults Upon Senior
Securities. </b>&nbsp;</font></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in; margin-right:0in; margin-top:0in'>None.</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify; margin-left:0in; margin-right:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>Item 4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Submissions of Matters
to a Vote of Securities Holders. </b>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in; margin-right:0in; margin-top:0in'>None.</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b><font size="3">Item 5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other Information</font></b></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>&nbsp;</b></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Delisting
Notice</b></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>On September 23, 2008, the Company received a letter
from The Nasdaq Stock Market (&#147;Nasdaq&#148;) indicating that the bid price of its
common stock for the last 30 consecutive business days had closed below the
minimum $1.00 per share required for continued listing under Nasdaq Marketplace
Rule 4310(c)(4). Pursuant to Nasdaq Marketplace Rule 4310(c)(8)(D), the Company
has been provided an initial period of 180 calendar days to regain compliance. The
letter provided for the compliance dates of until March 23, 2009. &nbsp;The letter
states the Nasdaq staff will provide written notification that the Company has
achieved compliance with Rule 4310(c)(4) if at any time before March 23, 2009,
the bid price of the Company&#146;s common stock closes at $1.00 per share or more
for a minimum of 10 consecutive business days, although the letter also states
that the Nasdaq staff has the discretion to require compliance for a period in
excess of 10 consecutive business days, but generally no more than 20
consecutive business days, under certain circumstances. &nbsp;&nbsp;On October 22, 2008,
we received a letter from Nasdaq that extended our compliance deadline from
March 23, 2009 to June 26, 2009.</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>If the Company cannot demonstrate compliance with Rule
4310(c)(4) by June 26, 2009, the Nasdaq staff will determine whether the
Company meets The Nasdaq Capital Market initial listing criteria set forth in
Nasdaq Marketplace Rule 4310(c), except for the bid price requirement. If the
Company meets the initial listing criteria, the Nasdaq staff will notify the
Company that it has been granted an additional 180 calendar day compliance
period. If the Company is not eligible for an additional compliance period, the
Nasdaq staff will provide written notice that the Company&#146;s securities will be
delisted. At that time, the Company may appeal the Nasdaq staff&#146;s determination
to delist its securities to a Listing Qualifications Panel.</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>If our common stock is delisted from the Nasdaq Capital
Market, we could seek to have our common stock listed on other Nasdaq
markets. However, delisting of our common stock from the Nasdaq Capital Market
could hinder your ability to sell, or obtain an accurate quotation for the price of, your shares of our common stock. Delisting could also
adversely affect the perception among investors of Pro-Dex and its
prospects, which could lead to further declines in the market
price of our common stock. Delisting would also make it more difficult and
expensive for us to raise capital. In addition, delisting might
subject us to an Securities and Exchange Commission rule that could
adversely affect the ability of broker-dealers to sell or make a market in our
common stock, thus hindering your ability to sell your shares. </p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Executive
Compensation</b></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mr. Murphy has notified the Company
that he is voluntarily waiving the current annual CPI adjustment to his base
salary for 2008 (an amount equal to approximately $1,220 per month), from
November 1, 2008 until such time as it is reinstated by Mr. Murphy.&nbsp;
Reinstatement will affect future payments only, with no retroactive amounts
due.&nbsp; While not paid to Mr. Murphy, the amount of such CPI increase to Mr.
Murphy&#146;s base salary will be retained for those provisions of his employment
agreement that use a computation which includes the then existing level of base
salary, including future CPI adjustments.</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			19</p></td>
		</tr>
	</table></div>&nbsp;<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>
<b><font size="3">Item 6. &nbsp;&nbsp; Exhibits. </font></b><font size="3">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-indent:.5in'>
<u><font size="3">Exhibits</font></u><font size="3">:</font></p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in; margin-right:0in; margin-top:0in'>31.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certifications of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended,
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:1.0in;text-indent:.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in'>
<font size="3">31.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certifications of Chief Financial
Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as
amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in; margin-right:0in; margin-top:0in'>32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certification of the Chief Executive
Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:2.0in;text-indent:-.5in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>SIGNATURES
</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-indent:.5in; margin-left:0in; margin-right:0in; margin-top:0in'>In
accordance with the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. </p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0 width=684
 style='width:90%;border-collapse:collapse'>
		<tr>
			<td width=306 valign=top style='width:229.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Date:&nbsp; November 13, 2008</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>PRO-DEX INC.
			</p></td>
			<td width=378 valign=top style='width:283.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Date:&nbsp; November 13, 2008</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>PRO-DEX INC.
			</p></td>
		</tr>
		<tr>
			<td width=306 valign=top style='width:229.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>By: / s / Mark Murphy
			</p></td>
			<td width=378 valign=top style='width:283.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>By: / s / Jeffrey J.
  Ritchey </p></td>
		</tr>
		<tr>
			<td width=306 valign=top style='width:229.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Mark Murphy</p>
			</td>
			<td width=378 valign=top style='width:283.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Jeffrey J. Ritchey
			</p></td>
		</tr>
		<tr>
			<td width=306 valign=top style='width:229.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Chief Executive Officer</p>
			</td>
			<td width=378 valign=top style='width:283.5pt;padding:0in 0in 0in 0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Secretary and Chief
  Financial Officer</p>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>(Principal Financial and
  Accounting Officer)</p></td>
		</tr>
	</table></div>
<p style="font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
<p style="font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			20</p></td>
		</tr>
	</table></div>&nbsp;<p>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 16.0pt">End of Filing</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31-1.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 31.1</title>
</head>

<body>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";'>
<b>EXHIBIT
31.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";text-align:center'>
<b><u>CERTIFICATIONS</u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">I, Mark Murphy, certify that:</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed this Form 10-Q of
Pro-Dex, Inc.;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report; </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report; </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f)) &nbsp;for the registrant and have:</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this
report is being prepared;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal
control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluated the
effectiveness of the registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report
any change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant's other certifying officer(s)
and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize and report
financial information; and </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Date: November 13, 2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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><u>/s/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MARK MURPHY<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></u></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mark
Murphy</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief
Executive Officer</font></p>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 31.2</title>
</head>

<body>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";'>
<b>EXHIBIT
31.2</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";text-align:center'>
<b><u>CERTIFICATIONS</u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">I, Jeffrey J. Ritchey,
certify that: </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed this Form 10-Q of
Pro-Dex, Inc.;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report; </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this
report; </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant&#146;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f)) &nbsp;for the registrant and have:</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this
report is being prepared;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Designed such internal control
over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evaluated the
effectiveness of the registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report
any change in the registrant&#146;s internal control over financial reporting that
occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting;&nbsp; and</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The registrant's other certifying
officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent functions):</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:-.5in'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize and report financial
information; and </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.5in'><font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Date: November 13, 2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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><u>/s/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JEFFREY J. RITCHEY</u><font style="font-size: 10.0pt"> _______</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jeffrey
J. Ritchey</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief
Financial Officer</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>

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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>exhibit32.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 32</title>
</head>

<body>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";'>
<b>EXHIBIT 32</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:3.0in;margin-bottom:.0001pt;text-indent:-3.0in'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:3.0in;margin-bottom:.0001pt;text-align:center;
text-indent:-3.0in'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;text-align:center'>
<b>CERTIFICATIONS
OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;text-align:center'>
<b>PURSUANT
TO 18 U.S.C. SECTION 1350, <br>AS ADOPTED PURSUANT TO <br>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;text-align:center'>
<b>&nbsp;</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;text-align:center'>
<b>Certifications
of Chief Executive Officer and Chief Financial Officer</b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-size:11.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;text-align:justify'>&nbsp;</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";margin-top:0in;text-align:justify'>In connection with the
quarterly report on Form 10-Q of Pro-Dex Inc. (the &#147;Company&#148;) for the quarterly
period ended September 30, 2008 (the &#147;Report&#148;), the undersigned hereby certify
in their capacities as Chief Executive Officer and Chief Financial Officer of
the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";text-align:justify'>1.&nbsp;&nbsp; The Report fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended; and</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";text-align:justify'>2.&nbsp;&nbsp; The information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";text-align:justify'>&nbsp;</p>
<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td>Dated: November 13, 2008</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>By:<u>
/s/ &nbsp;&nbsp; MARK MURPHY&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>
		</td>
	</tr>
	<tr>
		<td>&nbsp;</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>Mark
Murphy</p>
		</td>
	</tr>
	<tr>
		<td>&nbsp;</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>Chief
Executive Officer and President<u><br></u></p>
		</td>
	</tr>
	<tr>
		<td>&nbsp;</td>
		<td>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";text-align:justify'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td>Dated: November 13, 2008</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>By:<u>
/s/ &nbsp;&nbsp; JEFFREY J. RITCHEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>
		</td>
	</tr>
	<tr>
		<td>&nbsp;</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>Jeffrey
J. Ritchey</p>
		</td>
	</tr>
	<tr>
		<td>&nbsp;</td>
		<td>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>Chief Financial Officer</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify;text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>A signed original of this written statement required
by Section 906, or other document authenticating, acknowledging, or otherwise
adopting the signatures that appear in typed form within the electronic version
of this written statement required by Section 906, has been provided to the
Company and will be retained by the Company and Furnished to the Securities and
Exchange Commission or its staff upon request.</p>

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