<SEC-DOCUMENT>0000061004-12-000044.txt : 20120814
<SEC-HEADER>0000061004-12-000044.hdr.sgml : 20120814
<ACCEPTANCE-DATETIME>20120814171058
ACCESSION NUMBER:		0000061004-12-000044
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20120630
FILED AS OF DATE:		20120814
DATE AS OF CHANGE:		20120814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LGL GROUP INC
		CENTRAL INDEX KEY:			0000061004
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS, NEC [3679]
		IRS NUMBER:				381799862
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00106
		FILM NUMBER:		121034212

	BUSINESS ADDRESS:	
		STREET 1:		2525 SHADER ROAD
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32804
		BUSINESS PHONE:		(407) 298-2000

	MAIL ADDRESS:	
		STREET 1:		2525 SHADER ROAD
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32804

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LYNCH CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>lgl10-q20120630_q22012.htm
<DESCRIPTION>LGL FORM 10-Q DATED 6/30/2012
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">UNITED STATES</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">SECURITIES &amp; EXCHANGE COMMISSION</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">WASHINGTON, D.C. 20549</div>

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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">FORM 10-Q</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">(Mark One)</div>
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<td style="WIDTH: 12.78%; VERTICAL-ALIGN: middle">
<div style="TEXT-ALIGN: left; FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">x</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</div>
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<div>&#160;</div>
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<td style="BORDER-BOTTOM-COLOR: ; WIDTH: 87.22%; VERTICAL-ALIGN: middle">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">For the quarterly period ended <font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt"><u>June 30, 2012</u></font></div>
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<div>OR</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: Wingdings; COLOR: #000000; FONT-SIZE: 8pt">o</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</div>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">For the transition period from ____________ to ____________</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Commission File No. <font style="BORDER-BOTTOM: 2px solid; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">1-106</font></div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 12pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

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<div style="MARGIN-TOP: 2pt"><br>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">(Exact Name of Registrant as Specified in Its Charter)</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Delaware</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 53.58%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">38-1799862</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">(State or Other Jurisdiction of</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">Incorporation or Organization)</div>
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<td style="WIDTH: 53.58%; BORDER-TOP: #000000 0.5pt solid">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(I.R.S. Employer Identification No.)</div>
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<div>&#160;</div>
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<td style="WIDTH: 53.58%">
<div>&#160;</div>
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<div>&#160;</div>
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<td style="WIDTH: 53.58%">
<div>&#160;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">2525 Shader Rd., Orlando, Florida</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 53.58%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">32804</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(Address of principal executive offices)</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(Zip Code)</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 100%; VERTICAL-ALIGN: bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(407) 298-2000</div>
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<td style="WIDTH: 100%; BORDER-TOP: #000000 0.5pt solid" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(Registrant's telephone number, including area code)</div>
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<div>&#160;</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 53.58%">
<div>&#160;</div>
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<td style="WIDTH: 100%; BORDER-TOP: #000000 0.5pt solid" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">(Former name, former address, and former fiscal year if changed since last report)</div>
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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">No <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>
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<div style="TEXT-ALIGN: left; TEXT-INDENT: 17.3pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 8pt; MARGIN-RIGHT: 22.3pt">Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">No <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>
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<div>&#160;</div>
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<div style="TEXT-ALIGN: justify; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 8pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. &#160;See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. &#160;(Check one):</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Large accelerated filer <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Accelerated filer <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>
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<div>&#160;</div>
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<td style="WIDTH: 38.53%">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Non-accelerated filer <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">(Do not check if a smaller reporting company)</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Smaller reporting company <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">x</font></div>
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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</div>

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<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">Yes <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">o</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 8pt">No <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 8pt">x</font></div>
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<div>&#160;</div>
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<div><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 8pt">Indicate the number of shares outstanding of each of the issuer's&#160;classes of common stock, as<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt"> of the latest practicable date.</font></div>

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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 45.04%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">Class</div>
</td>
<td style="WIDTH: 12.32%">
<div>&#160;</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 42.65%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">Outstanding at August 13, 2012</div>
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<td style="WIDTH: 45.04%; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 0.5pt solid">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">Common Stock, $0.01 par value</div>
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<td style="WIDTH: 12.32%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 42.65%; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 0.5pt solid">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt">&#160;2,599,497</div>
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<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
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<td style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 100%"><strong>INDEX</strong></td>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div><br>
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<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART I.</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">FINANCIAL INFORMATION</div>
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<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
</tr>

<tr>
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 1.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Financial Statements (Unaudited)</div>
</td>
<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Condensed Consolidated Balance Sheets:</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
</td>
<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1</div>
</td>
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<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">- &#160; &#160; &#160; &#160; As of June 30, 2012</div>
</td>
<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">- &#160; &#160; &#160; &#160; As of December 31, 2011</div>
</td>
<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Condensed Consolidated Statements of Operations:</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
</td>
<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">3</div>
</td>
</tr>

<tr>
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">- &#160; &#160; &#160; &#160; Three and six months ended June 30, 2012 and 2011</div>
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<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Condensed Consolidated Statements of Comprehensive Income (Loss):</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">4</div>
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<div>&#160;</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">- &#160; &#160; &#160; &#160; Three and six months ended June 30, 2012 and 2011</div>
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<div>&#160;</div>
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<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Condensed Consolidated Statement of Stockholders' Equity:</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">5</div>
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<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="text-indent: 24.65pt; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt;">-&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Six months ended June 30, 2012 </div>
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<div>&#160;</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Condensed Consolidated Statements of Cash Flows:</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">6</div>
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<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">- &#160; &#160; &#160; &#160; Six months ended June 30, 2012 and 2011</div>
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<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
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<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Notes to Condensed Consolidated Financial Statements:</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">7</div>
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<tr>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 2.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Management's Discussion and Analysis of Financial Condition and</div>
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<div>&#160;</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 38.15pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Results of Operations</font><font style="FONT-SIZE: 5.05pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">13</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 3.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Quantitative and Qualitative Disclosures About Market Risk</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">19</div>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 4.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Controls and Procedures</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">19</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART II.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">OTHER INFORMATION</div>
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<td style="WIDTH: 6.58%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 1.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Legal Proceedings</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 1A.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Risk Factors</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 2.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Unregistered Sales of Equity Securities and Use of Proceeds</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 3.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Defaults Upon Senior Securities</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 10.43%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 4.</div>
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<td style="WIDTH: 82.99%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Mine Safety Disclosures</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 5.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Other Information</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">21</div>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Item 6.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 24.65pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Exhibits</font><font style="FONT-SIZE: 5.03pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">22</div>
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<tr style="BACKGROUND-COLOR: #ffffff; HEIGHT: 42px">
<td style="WIDTH: 93.42%; VERTICAL-ALIGN: bottom" colspan="2">
<div>&#160;</div>

<div>&#160;</div>

<div style="TEXT-ALIGN: left"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">SIGNATURES</font><font style="FONT-SIZE: 5.05pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">23</div>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART I</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">FINANCIAL INFORMATION</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 1.</font><font style="FONT-SIZE: 5.4pt; FONT-WEIGHT: bold">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px; FONT-WEIGHT: bold">&#160;&#160;</font>Financial Statements.</font></div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Dollars in Thousands)</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; PADDING-BOTTOM: 2px; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011 (A)</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</div>
</td>
</tr>

<tr>
<td valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">ASSETS</div>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 12px" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 6px" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Current Assets:</div>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 12px" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 6px" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Cash and cash equivalents</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">7,926</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">13,709</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Restricted cash (Note D)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Accounts receivable, less allowances of $75 and $131, respectively</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,245</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,309</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Inventories, net (Note C)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">5,908</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">5,676</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Deferred income taxes</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">960</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">960</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Prepaid expenses and other current assets</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">259</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">292</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Current Assets</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">23,298</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">24,946</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Property, Plant and Equipment:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Land</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">640</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">640</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Buildings and improvements</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">3,776</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">3,620</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Machinery and equipment</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">15,374</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">15,001</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Gross property, plant and equipment</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">19,790</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">19,261</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Less: &#160;accumulated depreciation</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(14,977</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(14,731</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Net property, plant, and equipment</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,813</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,530</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Deferred income taxes, net</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,762</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,385</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Other assets, net</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">536</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">560</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Assets</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">31,409</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">32,421</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 1 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div><br>
</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED, continued</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Dollars in Thousands, Except Per Share Amounts)</div>

<div>
<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 92px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="HEIGHT: 14px">
<td style="PADDING-BOTTOM: 2px" valign="bottom">
<div>&#160;</div>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 7px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 87px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011 (A)</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</div>
</td>
</tr>

<tr>
<td valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">LIABILITIES AND STOCKHOLDERS' EQUITY</div>
</td>
<td style="WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 7px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 87px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Current Liabilities:</div>
</td>
<td style="WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 7px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 87px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Note payable to bank (Note D)</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,517</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">3,026</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Accounts payable</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,057</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">1,755</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Accrued compensation and commissions expense</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">1,328</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">1,102</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Other accrued expenses</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">310</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">545</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 12.25pt; FONT-SIZE: 10pt">Current maturities of long-term debt (Note D)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">231</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">400</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Current Liabilities</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">6,443</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">6,828</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Long-term debt, net of current portion (Note D)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Liabilities</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">6,443</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">6,828</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Commitments and Contingencies</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Stockholders' Equity</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Common stock, $0.01 par value - 10,000,000 shares authorized; 2,635,320 shares issued and 2,599,866 shares outstanding at June 30, 2012, and 2,628,188 shares issued and 2,592,734 shares outstanding at December 31, 2011</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">26</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">26</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Additional paid-in capital</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">27,834</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">27,656</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Accumulated deficit</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(2,607</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(1,799</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Treasury stock; 35,454 shares held in treasury at cost at June 30, 2012 and December 31, 2011</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(315</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(315</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Accumulated other comprehensive income</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">28</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">25</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Stockholders' Equity (Note J)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">24,966</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">25,593</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 21.25pt; FONT-SIZE: 10pt">Total Liabilities and Stockholders' Equity</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">31,409</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">32,421</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<br>
</div>

<div>&#160;</div>

<div>
<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 8.65%; FONT-SIZE: 10pt; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif">(A)</div>
</td>
<td style="WIDTH: 91.35%; FONT-SIZE: 10pt">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif">The Condensed Consolidated Balance Sheet as of December 31, 2011, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.</div>
</td>
</tr>
</table>
</div>

<div>
<div><br>
</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">&#160;</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">See Accompanying Notes to Condensed Consolidated Financial Statements.</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">&#160;</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt">- Page 2 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div></div>

<div style="TEXT-ALIGN: center"><br>
</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Dollars in Thousands, Except Per Share Amounts)</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 12px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 203px" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Six Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">REVENUES<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">7,582</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">9,646</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">14,756</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">18,666</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Cost and expenses:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Manufacturing cost of sales<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">5,575</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">6,583</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">11,152</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">12,661</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Engineering, selling and administrative</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,297</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,499</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">4,695</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">5,058</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Total Cost and Expenses<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">7,872</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">9,082</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">15,847</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">17,719</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">OPERATING INCOME (LOSS)<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(290</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">564</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(1,091</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">947</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Other income (expense):</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Interest expense<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(28</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(29</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(54</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(41</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Other income (expense)<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(8</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">5</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(40</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">14</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">&#160;&#160;&#160;Total Other Income (Expense)</font><font style="FONT-SIZE: 5.02pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(36</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(24</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(94</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(27</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">INCOME (LOSS) BEFORE INCOME TAXES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(326</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">540</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(1,185</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">920</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Income tax benefit (provision)<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">111</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(194</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">377</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(333</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">NET INCOME (LOSS)<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(215</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">346</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(808</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">587</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Weighted average number of shares used in basic and diluted net income (loss) per common share calculation<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">.</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,599,866</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,617,260</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,597,554</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,549,580</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(0.08</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">0.13</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.07%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(0.31</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.18%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">0.23</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div style="TEXT-ALIGN: left"><br>
</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">See accompanying Notes to Condensed Consolidated Financial Statements.</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 3 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div></div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - UNAUDITED</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Dollars in Thousands)</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 204px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Six Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">NET INCOME (LOSS)</div>
</td>
<td style="WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 7px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; VERTICAL-ALIGN: bottom" valign="bottom">(215</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;)</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; VERTICAL-ALIGN: bottom" valign="bottom">346</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; VERTICAL-ALIGN: bottom" valign="bottom">(808</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">)&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; VERTICAL-ALIGN: bottom" valign="bottom">587</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Other comprehensive income:</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Unrealized gain (loss) on available-for-sale securities</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(4</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">3</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">14</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 4.85pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Deferred gain on swap liability on hedge contracts</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">42</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">47</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7; HEIGHT: 14px">
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">COMPREHENSIVE INCOME (LOSS)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; WIDTH: 7px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">(215</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;)</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">384</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">(805</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;)</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">648</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div>&#160;</div>

<div><br>
</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">See accompanying Notes to Condensed Consolidated Financial Statements.</div>

<div><br>
</div>

<div><br>
</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 4 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div></div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - UNAUDITED</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(Dollars in Thousands)</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 92px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Shares of Common Stock Outstanding</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Common Stock</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 12px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; WIDTH: 91px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Additional Paid-In Capital</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Accumulated Deficit</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 10px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; WIDTH: 93px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Accumulated Other Comprehensive</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Income</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Treasury Stock</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 11px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 2px; WIDTH: 92px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt; FONT-WEIGHT: bold">Total</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 16%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Balance at December 31, 2011</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">2,592,734</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">26</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">27,656</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(1,799</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
<td style="WIDTH: 1.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">25</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(315</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">25,593</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 16%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Net loss for period</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(808</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
<td style="WIDTH: 1.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(808</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 16%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Other comprehensive income</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">3</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">3</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff; HEIGHT: 32px">
<td style="WIDTH: 16%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Stock-based compensation (Note E)</div>
</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">7,132</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">178</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">178</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7; HEIGHT: 17px">
<td style="PADDING-BOTTOM: 2px; WIDTH: 16%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Balance at June 30, 2012</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">2,599,866</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">26</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.28%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">27,834</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(2,607</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.07%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; PADDING-BOTTOM: 2px; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">28</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(315</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.17%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9.28%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">24,966</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">See accompanying Notes to Condensed Consolidated Financial Statements.</div>

<div><br>
</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 5 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div></div>

<div style="TEXT-ALIGN: center">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(Dollars in Thousands)</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Six Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="PADDING-BOTTOM: 2px" valign="bottom">
<div style="TEXT-ALIGN: left">&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">OPERATING ACTIVITIES</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Net income (loss)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(808</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">587</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Adjustments to reconcile net income to net cash provided by operating activities:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Depreciation</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">331</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">336</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Amortization of finite-lived intangible assets</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">42</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">72</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Stock-based compensation</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">178</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">118</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Deferred income taxes</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(377</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">213</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Changes in operating assets and liabilities:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 5.25pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;Decrease in accounts receivable</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">64</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">592</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 4.5pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;Increase in inventories</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(232</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(922</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 4.5pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;Increase in trade accounts payable, accrued liabilities and other liabilities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">296</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">717</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 4.5pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;Decrease in other current assets</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">15</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">20</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 5.05pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">Net cash provided by (used in) operating activities</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(491</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,733</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">INVESTING ACTIVITIES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Capital expenditures</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(614</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(1,166</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">Net cash used in investing activities</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(614</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(1,166</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">FINANCING ACTIVITIES</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Net repayments on note payable to bank</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(509</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Increase in restricted cash</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(4,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Proceeds from issuance of common stock</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">6,562</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Payment of expenses related to the public offering</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(158</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Proceeds from long-term debt</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">536</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Repayments on long-term debt</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(169</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(669</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">Net cash provided by (used in) financing activities</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(4,678</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">6,271</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Increase (decrease) in cash and cash equivalents</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">(5,783</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">6,838</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Cash and cash equivalents at beginning of period</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">13,709</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">4,147</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">Cash and cash equivalents at end of period</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">7,926</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">10,985</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 5.05pt">Supplemental Disclosure:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;&#160;&#160;&#160;Cash paid for income taxes</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">24</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">35</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;&#160;&#160;&#160;Cash paid for interest</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">54</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">31</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>
</div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">See accompanying Notes to Condensed Consolidated Financial Statements.</div>

<div><br>
</div>

<div><br>
</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 6 -</div>

<hr style="PAGE-BREAK-AFTER: always; MARGIN: 4px 0px; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; CLEAR: both" id="DSPFPageBreak" noshade="noshade">
</div>

<div></div>

<div style="BORDER-BOTTOM-STYLE: none; BORDER-BOTTOM-COLOR: #000000; TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THE LGL GROUP, INC.</div>

<div style="BORDER-BOTTOM-STYLE: none; BORDER-BOTTOM-COLOR: #000000; TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Serif; MARGIN-BOTTOM: 6pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<br>
</div>

<div>
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<tr>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">A.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Subsidiaries of the Registrant</div>
</td>
</tr>
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<div><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The LGL Group, Inc. (the "Company"), formerly Lynch Corporation, incorporated in 1928 under the laws of the State of Indiana and reincorporated under the laws of the State of Delaware in 2007, is a holding company with subsidiaries engaged in the design, manufacture, and sale of standard and custom engineered electronic components.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">As of June 30, 2012, the subsidiaries of the Company are as follows:</div>

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<div style="TEXT-ALIGN: left">&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Owned By LGL</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 88%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">M-tron Industries, Inc.</div>
</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">100.0</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">%</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 88%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;M-tron Industries, Ltd.</div>
</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">99.9</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">%</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 88%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Piezo Technology, Inc.</div>
</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">100.0</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">%</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 88%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Piezo Technology India Private Ltd.</div>
</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">99.0</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">%</div>
</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 88%" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Lynch Systems, Inc.</div>
</td>
<td style="WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">100.0</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%" valign="bottom" nowrap="nowrap">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">%</div>
</td>
</tr>
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<div style="MARGIN-BOTTOM: 12pt"><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company operates through its principal subsidiary, M-tron Industries, Inc., which includes the operations of M-tron Industries, Ltd. ("Mtron") and Piezo Technology, Inc. ("PTI"). &#160;The combined operations of Mtron and PTI are referred to herein as "MtronPTI." MtronPTI has operations in Orlando, Florida, Yankton, South Dakota and Noida, India. &#160;In addition, MtronPTI has sales offices in Hong Kong and Shanghai, China. During 2007, the Company sold the operating assets of Lynch Systems, Inc., a subsidiary of the Company, to an unrelated third party.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">B.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Basis of Presentation</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2012, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">C.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Inventories</div>
</td>
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</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Inventories are stated at the lower of cost or market value. &#160;The Company reduces the value of its inventories to market value when the value is believed to be less than the cost of the item.</div>

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<tr>
<td valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt; FONT-WEIGHT: bold">&#160;</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 8pt; FONT-WEIGHT: bold"></div>
</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 3.6pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 3.6pt">2012</div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>

<div style="TEXT-ALIGN: center; TEXT-INDENT: 12.1pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 3.6pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 3.6pt">2011</div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 3.6pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 3.6pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Raw materials, net</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,887</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,864</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Work in process, net</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,666</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,384</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Finished goods, net</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,355</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,428</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff; HEIGHT: 15px">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 10.65pt; FONT-SIZE: 10pt">Total Inventories, net</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">5,908</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">5,676</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">The inventory reserve for obsolescence as of June 30, 2012 and December 31, 2011, was $2,091,000 and $1,942,000, respectively.</div>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
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<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">D.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes Payable to Banks and Long-Term Debt</div>
</td>
</tr>
</table>

<div><br>
</div>

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<tr>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 13px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 117px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 13px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 258px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes Payable to Banks:</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 13px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM-COLOR: ; WIDTH: 117px; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM-COLOR: ; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div></div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">MtronPTI revolving loan with J.P. Morgan Chase Bank, N.A. ("Chase") at the greater of Chase's prime rate or the one-month LIBOR rate plus 2.50% per annum (3.25% at June 30, 2012), due June 30, 2013.</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>$&#160;</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">2,517</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">3,026</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div>&#160;</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Long-Term Debt:</div>
</td>
<td style="WIDTH: 1.1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">MtronPTI term loan with Chase due January 31, 2013. The note bears interest<font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">&#160;</font>at a fixed rate of 5.00%</div>
</td>
<td style="WIDTH: 1.1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">231</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">400</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Less: Current maturities<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">231</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">400</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="PADDING-BOTTOM: 2px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Long-Term Debt<font style="FONT-SIZE: 6pt">&#8195;</font></div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1.1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">--</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">--</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; MARGIN-BOTTOM: 12pt"><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On June 30, 2011, certain of the Company's subsidiaries, together referred to as MtronPTI, entered into a loan agreement with Chase (the "Chase Loan Agreement"). The Chase Loan Agreement provides for the following credit facilities: (i) a revolving line of credit in the amount of $4,000,000, to be used solely for working capital needs (the "Chase Revolving Loan"), (ii) a commercial line of credit in the amount of $2,000,000, to be used solely for tangible capital expenditures and, at Chase's sole discretion, business acquisitions (the "Chase Commercial Loan"), and (iii) a term loan in the amount of $536,000 (the "Chase Term Loan"). The Chase Revolving Loan bears interest at the greater of (x) Chase's prime rate or (y) the one-month LIBOR rate plus 2.50% per annum (the "CB Rate"), with interest due and payable on a monthly basis and the outstanding principal balance plus all accrued but unpaid interest due and payable on June 30, 2013. The Chase Commercial Loan bore interest at the CB Rate, with interest due and payable on a monthly basis and the outstanding principal balance plus all accrued but unpaid interest due and payable on June 30, 2012. &#160;There was no amount outstanding under the Chase Commercial Loan as of June 30, 2012, or December 31, 2011. &#160;The Chase Commercial Loan expired on June 30, 2012. &#160;The Chase Term Loan bears interest at 5.00% per annum, with principal and interest due and payable in monthly installments of $29,500 and the outstanding principal balance, plus all accrued but unpaid interest due and payable on January 31, 2013.</div>

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<div></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">All outstanding obligations of MtronPTI under the Chase Loan Agreement are collateralized by a first priority security interest in all of the assets of MtronPTI, excluding real property. Additionally, in connection with the Chase Loan Agreement, PTI entered into a separate agreement with Chase providing that PTI would not mortgage or otherwise encumber certain real property it owns in Florida while the credit facilities under the Chase Loan Agreement are outstanding.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Chase Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to, a financial covenant that MtronPTI maintain tangible net worth not less than the sum of $7,500,000, plus 50% of the net income earned by MtronPTI for the preceding six-month period at June 30, 2011, with the threshold amount continuing to increase at December 31<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;">st</sup> and June 30<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;">th</sup> of each year by 50% of the net income earned by MtronPTI for the preceding six months.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On June 28, 2012, MtronPTI entered into a First Amendment to Master Loan Agreement with Chase, which amended the Chase Loan Agreement to delete financial covenants relating to the maintenance of minimum levels of net income and a minimum debt service coverage ratio. &#160;On May 15, 2012, MtronPTI made a cash collateral deposit of $4,000,000 with Chase as additional security for its obligations under the Chase Loan Agreement and entered into an Assignment of Deposit agreement with Chase providing Chase with a security interest in the account holding the deposit. &#160;The amount of this deposit is included in restricted cash in the accompanying condensed consolidated balance sheet as of June 30, 2012. &#160;The Assignment of Deposit agreement restricts MtronPTI's ability to withdraw any portion of the deposit and does not allow MtronPTI to assign the deposit or any part thereof.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">As of June 30, 2012, MtronPTI was in compliance with all covenants under the Chase Loan Agreement.</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">E.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Stock-Based Compensation</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company estimates the fair value of stock options on the grant date using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. There is no expected dividend rate. Historical Company information was the primary basis for the expected volatility assumption. The fair value of grants was calculated using historical volatility as the Company believes that the historical volatility over the life of the option is indicative of expected volatility in the future. The risk-free interest rate is based on the U.S. Treasury zero-coupon rates with a remaining term equal to the expected term of the option. Accounting Standards Codification ("ASC") 718, <font style="FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Stock Compensation</font>, also requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on past history of actual performance, a zero forfeiture rate has been assumed.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On February 29, 2012, the Board of Directors granted a total of 7,132 restricted shares to 14 employees of the Company under the 2011 Incentive Plan with a grant date fair value of $8.44 per share, 3,733 of which were granted to executive officers. These shares vest as follows: 30% on the first anniversary of the grant date; an additional 30% on the second anniversary of the grant date; and the remaining 40% on the third anniversary of the grant date.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On March 14, 2011, the Board of Directors granted options to purchase a total of 90,000 shares of the Company's common stock to members of senior management and the Company's Chairman of the Board. These stock options have an exercise price of $22.50 and vest as follows: 30% on the first anniversary of the grant date; an additional 30% on the second anniversary of the grant date; and the remaining 40% on the third anniversary of the grant date. &#160;These stock options expire on March 14, 2016.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Restricted stock awards are granted at a value equal to the market price of our common stock on the date of the grant. On December 15, 2010, the Board of Directors granted a total of 12,647 restricted shares to 14 employees of the Company. These shares vest as follows: 30% on the first anniversary of the grant date; an additional 30% on the second anniversary of the grant date; and the remaining 40% on the third anniversary of the grant date.</div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">As of June 30, 2012, there was approximately $724,000 of total unrecognized compensation expense related to unvested share-based compensation arrangements. &#160;There were 15,986 unvested restricted shares, and 63,000 unvested stock options at June 30, 2012.</div>

<div>
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<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">F.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Earnings (Loss) Per Share</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company computes earnings (loss) per share in accordance ASC 260, <font style="FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Earnings Per Share</font> ("ASC 260"). &#160;Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. &#160;Diluted earnings (loss) per share adjusts basic earnings (loss) per share for the effects of stock options, non-participating restricted common stock, and other potentially dilutive financial instruments, only in the periods in which the effects are dilutive. &#160;Shares of restricted stock granted to members of the Board of Directors as a portion of their director fees are deemed to be participating as defined by ASC 260 and therefore are included in the computation of basic earnings (loss) per share.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">For the three and six months ended June 30, 2012, there were options to purchase 90,000 shares of common stock that were excluded from the diluted earnings (loss) per share computation because the impact of the assumed exercise of such stock options would have been anti-dilutive, based on the fact that their exercise price exceeded the market price of the common stock as of June 30, 2012.</div>

<div>
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<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">G.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Fair Value Measurements</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company measures financial and non-financial assets and liabilities at fair value in accordance with ASC 820, <font style="FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Fair Value Measurements and Disclosures</font>.&#160; These measurements involve various valuation techniques and assume that the transactions would occur between market participants in the most advantageous market for the Company.&#160; The following is a summary of valuation techniques utilized by the Company for its significant financial and non-financial assets and liabilities as of June 30, 2012 and December 31, 2011:</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Assets</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">To estimate the fair value of its marketable securities, the Company obtains current market pricing from quoted market sources or uses pricing for identical securities. Assets measured at fair value on a recurring basis are summarized below.</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<div>&#160;</div>

<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Quoted Prices in Active Markets for Identical Assets</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 1)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Significant Other Observable Inputs</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 2)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Significant Unobservable Inputs</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 3)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">June 30,</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td valign="bottom">
<div>&#160;</div>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="14">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Equity securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">43</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">43</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">U.S. Treasury securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">6,838</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">6,838</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 10pt; CLEAR: both" id="DSPFPageBreakArea">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', Times, Serif; FONT-SIZE: 8pt" id="DSPFPageBreakArea">- Page 10 -</div>

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<div></div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Quoted Prices in Active Markets for Identical Assets</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 1)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Significant Other Observable Inputs</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 2)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Significant Unobservable Inputs</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Level 3)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31, </div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td valign="bottom">
<div>&#160;</div>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="14">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 52%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Equity securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">40</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">40</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 52%" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">U.S. Treasury securities</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">10,087</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">--</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">10,087</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div style="TEXT-ALIGN: justify"><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">H.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign Revenues</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">For the three and six months ended June 30, 2012 and 2011, foreign revenues were derived from the following countries:</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 7.5pt">Three Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 7.5pt">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 7.5pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign Revenues:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Malaysia</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,339</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,385</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">China</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">910</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,675</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Thailand</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">403</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">420</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">All other foreign countries</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,285</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,652</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;Total foreign revenues</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">3,937</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">5,132</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 1px; VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="PADDING-BOTTOM: 1px; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 7.5pt">Six Months Ended</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-RIGHT: 7.5pt">June 30,</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1px; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7; HEIGHT: 14px">
<td style="PADDING-BOTTOM: 1px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="VERTICAL-ALIGN: bottom" valign="bottom"></td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="6">
<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; MARGIN-LEFT: 8.9pt; FONT-SIZE: 10pt; MARGIN-RIGHT: 7.5pt">(in thousands)</div>
</td>
<td style="TEXT-ALIGN: left; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7; HEIGHT: 12px">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign Revenues:</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Malaysia</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,418</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,998</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">China</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">1,844</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,952</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Thailand</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">762</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">714</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #a7d1e7; HEIGHT: 15px">
<td style="PADDING-BOTTOM: 1px; WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">All other foreign countries</div>
</td>
<td style="PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">2,235</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">3,315</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;Total foreign revenues</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">7,259</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; WIDTH: 9%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">9,979</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div>&#160;</div>

<div><br>
 &#160;</div>

<div>
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<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">I.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Commitments and Contingencies</div>
</td>
</tr>
</table>
</div>

<div>
<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">In the normal course of business, the Company and its subsidiaries may become defendants in certain product liability, worker claims and other litigation. &#160;The Company and its subsidiaries have no litigation pending at this time.</div>

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<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">J.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Stockholders' Equity</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On August 29, 2011, the Board authorized the Company to repurchase up to 100,000 shares of its common stock in accordance with applicable securities laws. This authorization increased the total number of shares authorized and available for repurchase under the Company's existing share repurchase program to 540,000 shares, at such times, amounts and prices as the Company shall deem appropriate. As of June 30, 2012, the Company has repurchased a total of 35,454 shares of common stock under this program at a cost of $315,000, which shares are currently held in treasury. &#160;The Company did not repurchase any shares of common stock under this program during the six months ended June 30, 2012.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On February 4, 2011, the Company completed a public offering of 350,000 shares of common stock at $20.00 per share. &#160;The aggregate number of shares sold reflects and includes the exercise in full by the underwriter of its over-allotment option to purchase 45,652 additional shares of common stock. &#160;The Company received net proceeds of $6,404,000 from the offering, after deducting the underwriting discounts and commissions and offering expenses. &#160;These proceeds have been and will continue to be used for general corporate purposes, including working capital and potential technology acquisitions or other strategic ventures.</div>

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<tr>
<td style="WIDTH: 18pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">K.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Related Party Transactions</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">At June 30, 2012, the Company had $7,926,000 of cash and cash equivalents compared with $13,709,000 at December 31, 2011. &#160;Of this amount, $6,838,000 at June 30, 2012, compared with $10,087,000 at December 31, 2011, is invested in United States Treasury money market funds for which an entity controlled by a 10% stockholder and for which a Director of the Company serves as a Director, serves as the investment manager. The fund transactions in 2012 and 2011 are directed at the discretion of Company management and carried out by the related party.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">L.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Subsequent Event</div>
</td>
</tr>
</table>

<div style="TEXT-ALIGN: justify; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">On August 9, 2012, the Board of Directors granted a discretionary award of options to purchase a total of 40,000 shares of the Company's common stock to members of senior management. &#160;The stock options vest over three years and have an exercise price of $10.00 per share.</div>
</div>

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<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 2.</font><font style="FONT-SIZE: 5.4pt; FONT-WEIGHT: bold">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px; FONT-WEIGHT: bold">&#160;&#160;</font><font style="FONT-WEIGHT: bold">Management's Discussion and Analysis of Financial Condition and Results of Operations.</font></font></div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cautionary Note Regarding Forward Looking Statements</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Information included or incorporated by reference in this Quarterly Report on Form 10-Q may contain forward-looking statements. &#160;This information may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different than the future results, performance or achievements expressed or implied by any forward-looking statements. &#160;Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may," "should," "expect," "anticipate," "estimate," "believe," "intend" or "project" or the negative of these words or other variations on these words or comparable terminology.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Examples of forward-looking statements include, but are not limited to, statements regarding efforts to grow revenue, expectations regarding fulfillment of backlog, future benefits to operating margins and the adequacy of cash resources.&#160;&#160;Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2012. &#160;In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact be accurate. &#160;Further, we do not undertake any obligation to publicly update any forward-looking statements. &#160;As a result, you should not place undue reliance on these forward-looking statements.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Results of Operations</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three months ended June 30, 2012, compared to three months ended June 30, 2011</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Consolidated Revenues and Gross Margin</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Consolidated revenues decreased by $2,064,000, or 21.4%, to $7,582,000 for the three-month period ended June 30, 2012, from $9,646,000 for the comparable period in 2011.<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt"> &#160;</font>The decrease is primarily due to reduced demand from existing customers for existing products in our Internet Communications Technology ("ICT") and Military, Aeronautics and Instrumentation ("Mil/Aero") market segments, as well as the effects of weakness in the global macroeconomic environment. &#160;Specifically, decreases in ICT were driven by weakness in telecommunications network infrastructure spending during the second half of 2011 and the first half of 2012, and decreases in Mil/Aero were due to uncertainty related to government budget and spending cycles. &#160;<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">The Company is continuing its efforts to gain market share with new and existing customers in all of its geographic regions, and by focusing research and development efforts on the development of products that will serve additional segments of the timing and frequency control markets, such as wireless infrastructure, energy exploration, homeland security, avionics and military personnel protection.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">&#160;</font>As of June 30, 2012, the Company's order backlog was $9,526,000, which was an increase of 7.1% compared to the backlog as of March 31, 2012, which was $8,895,000, and a decrease of 21.2% compared to the backlog as of June 30, 2011, which was $12,093,000.&#160;&#160;The increase in backlog from March 31, 2012, is primarily due to a modest increase in order activity from our existing customers in the Mil/Aero market segment, as well as requests to accelerate existing order request dates to fall within the 12-month timeframe reflected in the order backlog.<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt"> &#160;</font>The backlog of unfilled orders includes amounts based on signed contracts as well as other agreements we have determined are legally binding and likely to proceed. &#160;Although backlog represents only business that is considered likely to be performed, cancellations or scope adjustments may and do occur.&#160;&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost, and sales of subsidiaries, if any. &#160;The Company expects to fill substantially its entire current backlog within the next twelve months, but cannot provide assurance as to the portion of the backlog to be fulfilled in a given year.</div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Consolidated gross margin, which is consolidated revenues less manufacturing cost of sales, as a percentage of revenues decreased to 26.5% for the three months ended June 30, 2012, from 31.8% for the comparable period in 2011. &#160;This decrease is due primarily to the 21.4% decrease in revenues from the comparable period in 2011, which eroded gross margin by spreading fixed infrastructure costs over a smaller revenue base. &#160;The Company is continuing its efforts to improve gross margins by increasing its revenue base and by seeking cost efficiencies within its manufacturing supply chain.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Operating Income (Loss)</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Operating loss was ($290,000) for the three months ended June 30, 2012, compared to operating income of $564,000 for the comparable period in 2011. &#160;This decrease is primarily the result of the 21.4% decrease in revenues as compared to the same period in 2011. &#160;The decrease was offset by a reduction of $202,000 in engineering, selling and administrative expenses as compared to the same period in 2011, primarily due to the consolidation of certain administrative functions into the Company's headquarters in Orlando, Florida, and a decrease in sales commissions paid as a result of the lower level of revenues.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Interest Expense</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Interest expense was $28,000 for the three months ended June 30, 2012, which was a decrease of $1,000 from $29,000 for the three months ended June 30, 2011. &#160;The decrease was due to a reduction in the average outstanding balance on MtronPTI's credit facilities for the quarter ended June 30, 2011, offset by interest expense paid to terminate the interest rate swap agreement related to the prior credit facilities provided by First National Bank of Omaha, N.A., which were terminated when MtronPTI entered into the Chase Loan Agreement on June 30, 2011.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Net Income (Loss)</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The net loss for the three months ended June 30, 2012, was ($215,000) compared to net income of $346,000 for the comparable period in 2011. &#160;The decrease was primarily attributable to a 21.4% decrease in revenues and a 5.3 percentage point decrease in gross margin for the three months ended June 30, 2012, as compared to the same period in 2011. Basic and diluted net loss per share for the three months ended June 30, 2012, was ($0.08) compared with basic and diluted net income per share of $0.13 for the three months ended June 30, 2011.</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Six months ended June 30, 2012, compared to six months ended June 30, 2011</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Consolidated Revenues and Gross Margin</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Consolidated revenues decreased by $3,910,000, or 20.9%, to $14,756,000 for the six-month period ended June 30, 2012, from $18,666,000 for the comparable period in 2011. &#160;</font>The decrease is primarily due to reduced demand from existing customers for existing products in our ICT and Mil/Aero market segments, as well as the effects of weakness in the global macroeconomic environment. &#160;Specifically, decreases in ICT were driven by weakness in telecommunications network infrastructure spending during the second half of 2011 and the first half of 2012, and decreases in Mil/Aero were due to uncertainty related to government budget and spending cycles. &#160;<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">The Company is continuing its efforts to gain market share with new and existing customers in all of its geographic regions, and by focusing research and development efforts on the development of products that will serve additional segments of the timing and frequency control markets, such as wireless infrastructure, energy exploration, homeland security, avionics and military personnel protection.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">As of June 30, 2012, the Company's order backlog was $9,526,000, which was an increase of 10.3% compared to the backlog as of December 31, 2011, which was $8,634,000, and </font>a decrease of 21.2% compared to the backlog as of June 30, 2011, which was $12,093,000<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">. &#160;</font>The increase in backlog from December 31, 2011, is primarily due to a modest increase in order activity from our existing customers in the Mil/Aero market segment, as well as requests to accelerate existing order request dates to fall within the 12-month timeframe reflected in the order backlog.<font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt"> &#160;</font>The</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">backlog of unfilled orders includes amounts based on signed contracts as well as other agreements we have determined are legally binding and likely to proceed. &#160;Although backlog represents only business that is considered likely to be performed, cancellations or scope adjustments may and do occur.&#160;&#160;</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost, and sales of subsidiaries, if any. &#160;The Company expects to fill substantially its entire current backlog in 2011, but cannot provide assurance as to the portion of the backlog to be fulfilled in a given year.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Consolidated gross margin, which is consolidated revenues less manufacturing cost of sales, as a percentage of revenues decreased to 24.4% for the six-month period ended June 30, 2012, from 32.2% for the comparable period in 2011. &#160;This decrease is due primarily to the 20.9% decrease in revenues compared to the comparable period in 2011, which reduced gross margin by spreading fixed infrastructure costs over a smaller revenue base. &#160;The Company is continuing its efforts to further improve its manufacturing and supply chain efficiency.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Operating Income (Loss)</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Operating loss was ($1,091,000) for the six months ended June 30, 2012, compared to operating income of $947,000 for the comparable period in 2011. &#160;This decrease was primarily the result of the 20.9% decrease in revenues as compared to the same period in 2011. &#160;The decrease was offset by a reduction of $363,000 in engineering, selling and administrative expenses as compared to the same period in 2011, primarily due to the consolidation of certain administrative functions into the Company's headquarters in Orlando, Florida, and a decrease in sales commissions paid as a result of the lower level of revenues.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Interest Expense</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Interest expense was $54,000 for the six-month period ended June 30, 2012, which was an increase of $13,000 from $41,000 for the comparable period in 2011. &#160;The increase was due to utilization of the Chase Revolving Loan for working capital and general corporate purposes.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Net Income (Loss)</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Net loss for the six-month period ended June 30, 2012, was ($808,000) compared to net income of $587,000 for the comparable period in 2011. &#160;The decrease was primarily attributable to a 20.9% decrease in revenues and a 7.8 percentage point decrease in gross margin for the six-month period ended June 30, 2012, as compared to the same period in 2011. &#160;Basic and diluted net loss per share for the six months ended June 30, 2012, was ($0.31) compared with net earnings per share of $0.23 for the six months ended June 30, 2011.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Liquidity and Capital Resources</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The Company's cash and cash equivalents at June 30, 2012, were $7,926,000 as compared to $13,709,000 at December 31, 2011. &#160;At June 30, 2012, MtronPTI had approximately $2,517,000 outstanding under the Chase Revolving Loan and available borrowing capacity of $401,000 under the Chase Revolving Loan (total borrowing capacity was below the maximum $4,000,000 available due to certain limitations on the borrowing base as defined in the Chase Loan Agreement), compared with $3,026,000 outstanding and available borrowing capacity of $389,000 at December 31, 2011. &#160;At June 30, 2012, the Company's consolidated working capital was $16,855,000, as compared to $18,118,000 at December 31, 2011. &#160;At June 30, 2012, the Company had current assets of $23,298,000 and current liabilities of $6,443,000. &#160;The ratio of current assets to current liabilities was 3.62 to 1.00 at June 30, 2012, compared to 3.65 to 1.00 at December 31, 2011.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Cash used in operating activities was ($491,000) for the six months ended June 30, 2012, compared to cash provided by operating activities of $1,733,000 for the six months ended June 30, 2011. &#160;The decrease was due to a net loss of ($808,000) for the six months ended June 30, 2012, as compared to net income of $587,000 for the six</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">months ended June 30, 2011. The decrease in net income was partially offset by a decrease in accounts receivable of $64,000 compared to a decrease of $592,000 during the same period in 2011, and a use of cash resulting from an increase in the inventory balance of ($232,000) compared to an increase of ($922,000) during the same period in 2011.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Cash used in investing activities was ($614,000) for the six months ended June 30, 2012, compared to ($1,166,000) for the same period in 2011. &#160;The decrease was due primarily to a reduction in spending on software to replace the Company's enterprise resource planning systems as that project is nearing completion.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Cash used in financing activities was ($4,678,000) for the six months ended June 30, 2012, compared with cash provided by financing activities of $6,271,000 for the same period in 2011. &#160;The change was due primarily to the increase in restricted cash of $4,000,000 which was assigned to Chase as additional security for the MtronPTI's obligations under the Chase Loan Agreement, net repayments on notes payable to bank of $509,000,and &#160;repayments on long-term debt of $169,000 during the six months ended June 30, 2012, and due to the Company's completion of its public offering of 350,000 shares of common stock in February 2011, resulting in net proceeds of $6,404,000.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">At June 30, 2012, total liabilities of $6,443,000 were $385,000 less than the total liabilities at December 31, 2011, of $6,828,000. &#160;The decrease in total liabilities was primarily due to a decrease in borrowings under the Chase Revolving Loan of $509,000, offset by an increase in accounts payable of $302,000, and an increase of $226,000 in accrued compensation and commissions expense. &#160;At June 30, 2012, the Company had $231,000 in current maturities of long-term debt compared with $400,000 at December 31, 2011. &#160;The decrease is due to the scheduled repayments of the Chase Commercial Loan.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On June 30, 2011, MtronPTI entered into the Chase Loan Agreement with Chase. The Chase Loan Agreement provides for the following credit facilities: (i) a revolving line of credit in the amount of $4,000,000, to be used solely for working capital needs, referred to as the Chase Revolving Loan, (ii) a commercial line of credit in the amount of $2,000,000, to be used solely for tangible capital expenditures and, at Chase's sole discretion, business acquisitions, referred to as the Chase Commercial Loan, and (iii) a term loan in the amount of $536,000, referred to as the Chase Term Loan. The Chase Revolving Loan bears interest at the greater of (x) Chase's prime rate or (y) the one-month LIBOR rate plus 2.50% per annum, referred to as the CB Rate, with interest due and payable on a monthly basis and the outstanding principal balance plus all accrued but unpaid interest due and payable on June 30, 2013. The Chase Commercial Loan bore interest at the CB Rate, with interest due and payable on a monthly basis and the outstanding principal balance plus all accrued but unpaid interest due and payable on June 30, 2012. There was no amount outstanding under the Chase Commercial Loan as of June 30, 2012, or December 31, 2011. &#160;The Chase Commercial Loan expired on June 30, 2012. &#160;The Chase Term Loan bears interest at 5.00% per annum, with principal and interest due and payable in monthly installments of $29,500 and the outstanding principal balance, plus all accrued but unpaid interest due and payable on January 31, 2013.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">All outstanding obligations of MtronPTI under the Chase Loan Agreement are collateralized by a first priority security interest in all of the assets of MtronPTI, excluding real property. Additionally, in connection with the Chase Loan Agreement, PTI entered into a separate agreement with Chase providing that PTI would not mortgage or otherwise encumber certain real property it owns in Florida while the credit facilities under the Chase Loan Agreement are outstanding.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Chase Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to a financial covenant that MtronPTI maintain tangible net worth not less than the sum of $7,500,000, plus 50% of the net income earned by MtronPTI for the preceding six-month period at June 30, 2011, with the threshold amount continuing to increase at December 31<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;">st</sup> and June 30<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;">th</sup> of each year by 50% of the net income earned by MtronPTI for the preceding six months.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">On June 28, 2012, MtronPTI entered into a First Amendment to Master Loan Agreement with Chase, which amended the Chase Loan Agreement to delete the financial covenants relating to the maintenance of minimum</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">levels of net income and a minimum debt service coverage ratio. &#160;On May 15, 2012, MtronPTI made a cash collateral deposit of $4,000,000 with Chase as additional security for its obligations under the Chase Loan Agreement and entered into an Assignment of Deposit agreement with Chase providing Chase with a security interest in the account holding the deposit. &#160;The amount of this deposit is included in restricted cash in the accompanying condensed consolidated balance sheet as of June 30, 2012. &#160;The Assignment of Deposit agreement restricts MtronPTI's ability to withdraw any portion of the deposit and does not allow MtronPTI to assign the deposit or any part thereof.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">As of June 30, 2012, MtronPTI was in compliance with all covenants under the Chase Loan Agreement.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The Company believes that existing cash and cash equivalents, cash generated from operations and available borrowings on its revolving line of credit will be sufficient to meet its ongoing working capital and capital expenditure requirements for the next 12 months. &#160;However, the Company may need to seek additional capital to fund future growth in its business, to provide flexibility to respond to dynamic market conditions, or to fund its strategic growth objectives.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Off-Balance Sheet Arrangements</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company does not have any off-balance sheet arrangements.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Critical Accounting Policies</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of such statements requires us to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period and the reported amounts of assets and liabilities as of the date of the financial statements. Our estimates are based on historical experience and other assumptions that we consider to be reasonable given the circumstances. Actual results may vary from our estimates.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The Company's most critical accounting policies include revenue recognition, accounts receivable allowance, valuation of inventories, accounting for warranty obligations, accounting for income taxes, and accounting for stock-based compensation.</div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">The Company recognizes revenue from the sale of its product in accordance with the criteria in ASC 605, <font style="FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Revenue Recognition</font>, which are:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 18pt; FONT-SIZE: 10pt">&#8210;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">The seller's price to the buyer is fixed and determinable; and</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Collectability is reasonably assured.</div>
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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">The Company meets these conditions upon shipment because title and risk of loss passes to the customer at that time. &#160;However, the Company offers a limited right of return and/or authorized price protection provisions in its agreements with certain electronic component distributors who resell the Company's products to original equipment manufacturers or electronic manufacturing services companies. &#160;As a result, the Company estimates and records a reserve for future returns and other charges against revenue at the time of shipment consistent with the terms of sale. The reserve is estimated based on historical experience with each respective distributor. &#160;The amount of these reserves at June 30, 2012, is not material to the financial statements.</div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">The Company recognizes revenue related to transactions with a right of return and/or authorized price protection provisions when the following conditions are met:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Seller's price to the buyer is &#160;fixed or determinable at the date of sale;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Buyer acquiring the product for resale has economic substance apart from that provided by the seller;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 18pt; FONT-SIZE: 10pt">&#8210;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">Seller does not have obligations for future performance; and</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; MARGIN-LEFT: 18pt; FONT-SIZE: 10pt">&#8210;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt">The amount of future returns can be reasonably estimated.</div>
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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Accounts Receivable Allowance</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Accounts receivable on a consolidated basis consists principally of amounts due from both domestic and foreign customers. &#160;Credit is extended based on an evaluation of the customer's financial condition and collateral is not generally required. &#160;In relation to export sales, the Company generally requires letters of credit supporting a significant portion of the sales price prior to production to limit exposure to credit risk. &#160;Certain credit sales are made to industries that are subject to cyclical economic changes. &#160;The Company maintains an allowance for doubtful accounts at a level that management believes is sufficient to cover potential credit losses.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. &#160;Estimates are based on historical collection experience, current trends, credit policy and relationship between accounts receivable and revenues. &#160;In determining these estimates, the Company examines historical write-offs of its receivables and reviews each client's account to identify any specific customer collection issues. &#160;If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payment, additional allowances might be required. &#160;The Company's failure to estimate the losses for doubtful accounts accurately and ensure that payments are received on a timely basis could have a material adverse effect on its business, financial condition and results of operations.</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Inventory Valuation</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Inventories are stated at the lower of cost or market value using the FIFO (first-in, first-out) method.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company maintains a reserve for inventory based on estimated losses that result from inventory that becomes obsolete as of period end. In determining these estimates, the Company performs an analysis on demand and usage for each inventory item over historical time periods. &#160;Based on that analysis, the Company reserves a percentage of the inventory amount within each time period based on historical demand and usage patterns of specific items in inventory.</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Warranties</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">The Company offers a standard one-year warranty. The Company tests its products prior to shipment in order to ensure that they meet each customer's requirements based upon specifications received from each customer at the time its order is received and accepted. The Company's customers may request to return products for various reasons, including but not limited to the customers' belief that the products are not performing to specification. The Company's return policy states that it will accept product returns only with prior authorization and if the product does not meet customer specifications, in which case the product would be replaced or repaired. To accommodate the Company's customers, each request for return is reviewed, and if and when it is approved, a return materials</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">authorization ("RMA") is issued to the customer. Each month the Company records a specific warranty reserve for approved RMAs covering products that have not yet been returned. The Company does not maintain a general warranty reserve because, historically, valid warranty returns resulting from a product not meeting specifications or being non-functional have been immaterial.</div>

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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Income Taxes</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">The Company's deferred income tax assets represent temporary differences between the financial statement carrying amount and the tax basis of existing assets and liabilities that will result in deductible amounts in future years, including net operating loss carryforwards. Based on estimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions. Our judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors. If, in the future, the Company experiences losses for a sustained period of time, the Company may not be able to conclude that it is more likely than not that the Company will be able to generate sufficient future taxable income to realize our deferred tax assets. If this occurs, the Company may be required to increase the valuation allowance against the deferred tax assets resulting in additional income tax expense.</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Stock-Based Compensation</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the requisite service period, typically the vesting period.</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">The Company estimates the fair value of stock options on the grant date using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. There is no expected dividend rate. Historical Company information was the basis for the expected volatility assumption as the Company believes that the historical volatility over the life of the option is indicative of expected volatility in the future. The risk-free interest rate is based on the U.S. Treasury zero-coupon rates with a remaining term equal to the expected term of the option. The Company also estimates forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on past history of actual performance, a zero forfeiture rate has been assumed. &#160;Restricted stock awards are granted at a value equal to the market price of our common stock on the date of the grant.</div>

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<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 3.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Quantitative and Qualitative Disclosures About Market Risk.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Not applicable.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 4.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Controls and Procedures.</font></div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">Evaluation of Disclosure Controls and Procedures</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">As of the end of the period covered by this report, the Company's principal executive officer and principal financial officer evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on their evaluation of the Company's disclosure controls and procedures, the Company's principal executive officer and principal financial officer, with the participation of the Company's management, have concluded that the Company's disclosure controls and procedures were effective as of June 30, 2012, to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">(b) accumulated and communicated to management, including the Company's principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.</div>

<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">Changes in Internal Control Over Financial Reporting</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">During the fiscal quarter ended June 30, 2012, there were no changes in the Company's internal controls over financial reporting, or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.</div>

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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART II</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">OTHER INFORMATION</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 1.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Legal Proceedings.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; COLOR: #000000; FONT-SIZE: 10pt">None.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 1A.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160; Risk Factors.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">None.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 2.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Unregistered Sales of Equity Securities and Use of Proceeds.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">None.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 3.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Defaults Upon Senior Securities.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">None.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 4.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Mine Safety Disclosures.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">None.</div>

<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 5.</font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font>Other Information.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">None.</div>

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<div style="TEXT-ALIGN: left; MARGIN-BOTTOM: 12pt"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 6.<font style="LETTER-SPACING: 9pt; FONT-SIZE: 1px">&#160;&#160;</font></font><font style="FONT-SIZE: 5.4pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exhibits.</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">The following is a list of exhibits filed as part of this Form 10-Q:</div>

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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Exhibit No.</div>
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<div>&#160;</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Description</div>
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<div>&#160;</div>
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<td style="WIDTH: 88.87%; VERTICAL-ALIGN: bottom">
<div>&#160;</div>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">31.1</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*</div>
</td>
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<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">31.2</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">32.1</div>
</td>
<td style="WIDTH: 88.87%">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">32.2</div>
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<td style="WIDTH: 88.87%">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*</div>
</td>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.INS</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">XBRL Instance Document**</div>
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<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.SCH</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">XBRL Taxonomy Extension Schema Document**</div>
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<tr style="BACKGROUND-COLOR: #a7d1e7">
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.CAL</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">XBRL Taxonomy Extension Calculation Linkbase Document**</div>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.DEF</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">XBRL Taxonomy Extension Definition Linkbase Document**</div>
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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.LAB</div>
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<tr style="BACKGROUND-COLOR: #ffffff">
<td style="WIDTH: 11.13%">
<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">101.PRE</div>
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<div style="TEXT-ALIGN: left; MARGIN-TOP: 3pt; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 3pt; FONT-SIZE: 10pt">____________</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">* Filed herewith</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt">** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed as part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. &#160;XBRL Interactive Data files with detailed tagging will be filed by amendment to this Quarterly Report on Form 10-Q within 30 days of the filing date of this Quarterly Report on Form 10-Q, as permitted by Rule 405(a)(2)(ii) of Regulation S-T.</div>

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<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">SIGNATURES</div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 18pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-SIZE: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</div>

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<div style="TEXT-ALIGN: justify; TEXT-INDENT: 5.25pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">THE LGL GROUP, INC.</div>
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<div style="TEXT-ALIGN: justify"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Date:</font><font style="FONT-SIZE: 5.14pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">&#160; August 14, 2012</font></div>
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<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">By:</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 43.62%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">/s/ Gregory P. Anderson</div>
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<div>&#160;</div>
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<div>&#160;</div>
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<td style="WIDTH: 43.62%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Gregory P. Anderson</div>
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<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">President and Chief Executive Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Principal Executive Officer)</div>
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<div style="TEXT-ALIGN: justify"><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Date:</font><font style="FONT-SIZE: 5.24pt">&#8195;&#8195;&#8195;&#8195;&#8195;&#8195;</font><font style="FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">&#160; August 14, 2012</font></div>
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<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">By:</div>
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<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 43.62%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">/s/ R. LaDuane Clifton</div>
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<div>&#160;</div>
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<td style="WIDTH: 43.62%; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 0.5pt solid">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">R. LaDuane Clifton</div>
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<div>&#160;</div>
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<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">Chief Accounting Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">(Principal Financial Officer)</div>
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<div>&#160;</div>

<div>&#160;</div>

<div>&#160;</div>

<div>&#160;</div>

<div>&#160;</div>

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<div><br>
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>ex31-1_ceo302cert.htm
<DESCRIPTION>EXHIBIT 31.1 CEO 302 CERTIFICATION 8/14/2012
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<div style="border-bottom: 2px solid; text-align: justify; font-family: 'Times New Roman', serif; font-size: 9pt;">EXHIBIT 31.1</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">&#160;</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</div>

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<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">I, Gregory P. Anderson, certify that:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended June 30, 2012;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
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<div><br>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(a)</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">&#160;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The registrant's other certifying officer 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 the registrant's board of directors (or persons performing the equivalent functions):</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(a)</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(b)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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.</div>
</td>
</tr>
</table>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 50%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">August 14, 2012</div>
</td>
<td style="WIDTH: 2.89%"></td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 47.11%" colspan="2">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">/s/ Gregory P. Anderson</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Name:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Gregory P. Anderson</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Title:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">President and Chief Executive Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(Principal Executive Officer)</div>
</td>
</tr>
</table>

<div><br>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</body>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>ex31-2_cao302cert.htm
<DESCRIPTION>EXHIBIT 31.2 CAO 302 CERTIFICATION 8/14/2012
<TEXT>
<html>
<head>
<title></title>
<!--Licensed to: The LGL Group, Inc.

    Document created using Disclosure Solutions PROFILE 1.0.1.0

    Copyright 1995 - 2012 Thomson Reuters Accelus.  All rights reserved.-->
</head>
<body style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" bgcolor="#ffffff" text="#000000">
<div>
<div style="border-bottom: 2px solid; text-align: justify; font-family: 'Times New Roman', serif; font-size: 9pt;">EXHIBIT 31.2<br>
</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</div>

<div><br>
</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">I, R. LaDuane Clifton, certify that:</div>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 25.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 7.5pt; FONT-SIZE: 9pt">1.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended June 30, 2012;</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 25.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 7.5pt; FONT-SIZE: 9pt">2.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 25.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 7.5pt; FONT-SIZE: 9pt">3.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 25.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 7.5pt; FONT-SIZE: 9pt">4.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(a)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(b)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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;</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(c)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(d)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">&#160;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 25.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 7.5pt; FONT-SIZE: 9pt">5.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The registrant's other certifying officer 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 the registrant's board of directors (or persons performing the equivalent functions):</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(a)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61.5pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 43.5pt; FONT-SIZE: 9pt">(b)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">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.</div>
</td>
</tr>
</table>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 50%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">August 14, 2012</div>
</td>
<td style="WIDTH: 2.89%"></td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 47.11%" colspan="2">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">/s/ R. LaDuane Clifton</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Name:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">R. LaDuane Clifton</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Title:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Chief Accounting Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(Principal Financial Officer)</div>
</td>
</tr>
</table>

<div><br>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>ex32-1_ceo906cert.htm
<DESCRIPTION>EXHIBIT 32.1 CEO 906 CERTIFICATION 8/14/2012
<TEXT>
<html>
<head>
<title></title>
<!--Licensed to: The LGL Group, Inc.

    Document created using Disclosure Solutions PROFILE 1.0.1.0

    Copyright 1995 - 2012 Thomson Reuters Accelus.  All rights reserved.-->
</head>
<body style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" bgcolor="#ffffff" text="#000000">
<div>
<div style="BORDER-BOTTOM: 2px solid; TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">EXHIBIT 32.2</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">&#160;</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</div>

<div><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 45.8pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">In connection with the quarterly report of The LGL Group, Inc., (the "Company") on Form 10-Q for the quarterly period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory P. Anderson, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:</div>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 36pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 18pt; FONT-SIZE: 9pt">1.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 36pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 18pt; FONT-SIZE: 9pt">2.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</div>
</td>
</tr>
</table>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 50%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">August 14, 2012</div>
</td>
<td style="WIDTH: 2.89%"></td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 47.11%" colspan="2">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">/s/ Gregory P. Anderson</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Name:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Gregory P. Anderson</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Title:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">President and Chief Executive Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(Principal Executive Officer)</div>
</td>
</tr>
</table>

<div><br>
</div>
</div>
</div>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>ex32-2_cao906cert.htm
<DESCRIPTION>EXHIBIT 32.2 CAO 906 CERTIFICATION 8/14/2012
<TEXT>
<html>
<head>
<title></title>
<!--Licensed to: The LGL Group, Inc.

    Document created using Disclosure Solutions PROFILE 1.0.1.0

    Copyright 1995 - 2012 Thomson Reuters Accelus.  All rights reserved.-->
</head>
<body style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" bgcolor="#ffffff" text="#000000">
<div>
<div style="BORDER-BOTTOM: 2px solid; TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">EXHIBIT 32.2</div>

<div><br>
</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER</div>

<div style="TEXT-ALIGN: center; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</div>

<div><br>
</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 45.8pt; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">In connection with the quarterly report of The LGL Group, Inc., (the "Company") on Form 10-Q for the quarterly period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, R. LaDuane Clifton, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:</div>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 36pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 18pt; FONT-SIZE: 9pt">1.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</div>
</td>
</tr>
</table>

<div><br>
</div>

<div>
<table style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 36pt; VERTICAL-ALIGN: top; align: right">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; MARGIN-LEFT: 18pt; FONT-SIZE: 9pt">2.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="TEXT-ALIGN: left; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</div>
</td>
</tr>
</table>

<div><br>
</div>

<table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 50%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 10pt">August 14, 2012</div>
</td>
<td style="WIDTH: 2.89%"></td>
<td style="BORDER-BOTTOM: #000000 2px solid; WIDTH: 47.11%" colspan="2">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">/s/ R. LaDuane Clifton</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Name:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">R. LaDuane Clifton</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%"></td>
<td style="WIDTH: 2.89%"></td>
<td style="WIDTH: 9.4%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Title:</div>
</td>
<td style="WIDTH: 37.71%">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">Chief Accounting Officer</div>

<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', serif; FONT-SIZE: 9pt">(Principal Financial Officer)</div>
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