<SEC-DOCUMENT>0000061004-14-000048.txt : 20140814
<SEC-HEADER>0000061004-14-000048.hdr.sgml : 20140814
<ACCEPTANCE-DATETIME>20140814171034
ACCESSION NUMBER:		0000061004-14-000048
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20140814
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20140814
DATE AS OF CHANGE:		20140814

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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00106
		FILM NUMBER:		141044162

	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>
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<TYPE>8-K
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<FILENAME>lgl8k_20140814.htm
<DESCRIPTION>LGL Q2 2014 EARNINGS RELEASE
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">UNITED STATES</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">SECURITIES AND EXCHANGE COMMISSION</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Washington, D.C. 20549</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">FORM 8-K</div>

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

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Pursuant to Section 13 or 15(d) of the<font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><br>
</font> Securities Exchange Act of 1934</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">Date of report (Date of earliest event reported): <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><u>August 14, 2014</u></font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">THE LGL GROUP, INC.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">1-106</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">(Commission<font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">(IRS Employer<font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">2525 Shader Road, Orlando, FL</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: center">Registrant's Telephone Number, Including Area Code: <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><u>(407) 298-2000</u></font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-STYLE: italic">see</font> General Instruction A.2. below):</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: justify">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: justify">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: justify">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Results of Operations and Financial Condition.</td>
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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">The information contained in Item 7.01 is incorporated by reference into this Item 2.02.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Regulation FD Disclosure.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">On August 14, 2014, The LGL Group, Inc. (the "Company") issued a press release (the "Press Release") announcing its financial results for the three and six months ended June 30, 2014, and other financial information. A copy of the Press Release is attached hereto as <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif"><u>Exhibit 99.1</u></font> and is incorporated herein by reference.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">The information furnished pursuant to this Current Report on Form 8-K, including the exhibits hereto, shall not be considered "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Exchange Act, unless the Company expressly sets forth in such future filing that such information is to be considered "filed" or incorporated by reference therein.</div>

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<div style="MARGIN-BOTTOM: 12pt; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold">Item 9.01.</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 5.14pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold">Financial Statements and Exhibits.</font></div>

<div style="MARGIN-BOTTOM: 12pt; TEXT-ALIGN: justify; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(d)</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 5.14pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-STYLE: italic">Exhibits</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">Description</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">99.1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">Press Release dated August 14, 2014.</div>
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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center"><a name="_Aci_Pg3"><!--Anchor--></a>SIGNATURES</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; TEXT-INDENT: 36pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">August 14, 2014</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">THE LGL GROUP, INC.</div>
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<div>/s/ R. LaDuane Clifton</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">R. LaDuane Clifton</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Chief Financial Officer</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">Description</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">99.1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: justify">Press Release dated August 14, 2014.</div>
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<TYPE>EX-99.1
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<FILENAME>lgl8k_20140814_exh991.htm
<DESCRIPTION>EXHIBIT 99.1
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<div><u>Exhibit 99.1</u><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">The LGL Group, Inc. Reports Second Quarter 2014 Financial Results</div>

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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">ORLANDO, FL, August 14, 2014 &#8211; The LGL Group, Inc. (NYSE MKT: LGL) (the "Company"), announced results for the three and six months ended June 30, 2014.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Summary of Q2 2014 Results:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Revenues of $5.9 million, a decrease of 16.0% compared to Q2 2013</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Net loss of ($1.3) million, or ($0.49) per share</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Adjusted EBITDA loss of ($0.5) million, or ($0.21) per share</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Gross margin of 23.3%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Backlog improves to $9.6 million at 6/30/2014 vs. $9.1 million at 3/31/2014</div>
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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Total revenues for Q2 2014 were approximately $5.9 million, a decrease of 16.0% compared to revenues of $7.0 million for the comparable period in 2013.&#160; The Company reported a net loss of ($1.3) million, or ($0.49) per share for Q2 2014, which included a one-time non-cash restructuring charge of ($0.4) million, compared with a net loss of ($5.0) million, or ($1.91) per share for the comparable period in 2013, which included a one-time non-cash charge of ($4.1) million to recognize a valuation allowance against our deferred tax assets as required by U.S. GAAP.&#160; Adjusted EBITDA, which excludes non-cash stock-based compensation and one-time non-cash restructuring charges, was a loss of ($0.5) million, or ($0.21) per share, for Q2 2014, compared to a loss of ($0.4) million, or ($0.16) per share, for the comparable period in 2013.</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Total revenues for the six months ended June 30, 2014, were approximately $12.0 million, a decrease of 16.6% compared to revenues of $14.4 million for the comparable period in 2013.&#160; The Company reported a net loss of ($2.1) million, or ($0.80) per share for the six months ended June 30, 2014, which included a one-time non-cash restructuring charge of ($0.4) million, compared with a net loss of ($5.0) million, or ($1.94) per share for the comparable period in 2013, which included a one-time non-cash charge of ($4.1) million to recognize a valuation allowance against our deferred tax assets.&#160; Adjusted EBITDA, which excludes non-cash stock-based compensation and one-time non-cash restructuring charges, was a loss of ($1.4) million, or ($0.54) per share, for the six months ended June 30, 2014, compared to a loss of ($0.4) million, or ($0.14) per share, for the comparable period in 2013.</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">Gross margin for Q2 2014 was </font>23.3%, which was a decrease of 2.4 percentage points from 25.7% for the comparable period in 2013.&#160; The decrease was due to the 16.0% decrease in revenues for Q2 2014 as compared to the comparable period in 2013, and an increase in accrued warranty expense of $344,000 during Q2 2014, which was related to two isolated product defects.&#160; Excluding the increase in accrued warranty expense, gross margin for Q2 2014 would have been 29.2%.&#160; Gross margin for the six months ended June 30, 2014 <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">was 24.7%, which was a decrease compared to 29.2% for the comparable period in 2013.</font></div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Michael Ferrantino, Sr., LGL's Executive Chairman and CEO, said "2014 is a transition year for our Company, and our Q2 2014 results reflect the work that remains to be done.&#160; During the quarter, we embarked on a continuation of our restructuring efforts to improve our cost structure, which we expect will ultimately lead to improved results.&#160; These changes are expected to be substantially completed by the end of Q3 2014.&#160; Management continues to evaluate opportunities to improve our operating leverage, and we're fully committed to restoring sustainable profitability and becoming more competitive within the dynamic markets we serve as a niche designer and manufacturer of highly-engineered electronic components and subsystems."</div>

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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Backlog Improved to $9.6M; Solid Capital Position</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">At June 30, 2014, the Company's order backlog was $9.6 million, an increase of 4.8% compared to $9.1 million at March 31, 2014, and an increase of 5.4% compared to $9.1 million as of June 30, 2013.&#160; The backlog increase is due to an increase in repeat orders for existing products and new orders resulting from our recent acquisition of certain filter product line assets from Trilithic on January 31, 2014.</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Cash and cash equivalents as of June 30, 2014, was $6.1 million, or $2.36 per share, and cash-adjusted working capital (accounts receivable, plus inventory, less accounts payable) remained at $5.9 million, or $2.26 per share, at June 30, 2014, as compared to March 31, 2014.</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; COLOR: #000000; TEXT-ALIGN: justify">Mr. Ferrantino said, "Our strategy remains to transform our business by leveraging our core strength as an engineering and technical leader within our markets, and by revitalizing our intellectual property through both organic development and strategic investments that will strengthen MtronPTI's RF/microwave portfolio."</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">The Company also announced that due to the focus on its ongoing restructuring, it will not hold an earnings conference call to review financial results for the next several quarters.&#160; However, the Company will continue to provide vital and timely financial information through its website, <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">www.lglgroup.com</font>, and through its press releases and periodic SEC filings.&#160; Investors are also invited to join the Company's mailing list to receive press releases directly by e-mail:&#160; <font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">http://www.lglgroup.com/content/contact-lgl-group</font>.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: justify">About The LGL Group, Inc.</div>

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<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">The LGL Group, Inc., through its wholly-owned subsidiary MtronPTI, manufactures and markets highly-engineered electronic components used to control the frequency or timing of signals in electronic circuits.&#160; These devices are used extensively in electronic systems for military applications, avionics, earth-orbiting satellites, medical devices, instrumentation, industrial devices and global positioning systems.&#160; They are also used in infrastructure equipment for the telecommunications and network equipment industries.&#160; The Company has operations in Orlando, Florida, Yankton, South Dakota, Yantai, China and Noida, India, and sales offices in Sacramento, California, Hong Kong and Shanghai, China.</div>

<div style="MARGIN-BOTTOM: 12pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">For more information on the Company and its products and services, contact R. LaDuane Clifton, Chief Financial Officer, The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804, (407) 298-2000, or visit the Company's Web site: </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #0000ff"><u>www.lglgroup.com</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">.</font></div>

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

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">Information included or incorporated by reference in this Press Release 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>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">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; 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 31, 2014, as updated by our subsequently filed quarterly reports on Form 10-Q.&#160; In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Press Release 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>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left">R. LaDuane Clifton</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left">The LGL Group, Inc.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left">lclifton@lglgroup.com</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left">(407) 298-2000</div>

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

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">5,850</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">6,965</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">11,981</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">14,363</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

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

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.9pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Manufacturing cost of sales<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">4,485</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">5,177</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">9,020</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">10,173</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.9pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Engineering, selling and administrative</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,246</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,606</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">4,656</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">5,286</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.9pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Restructuring expense<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">397</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">&#8212;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">397</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">&#8212;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 5.05pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">OPERATING LOSS<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,278</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(818</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(2,092</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,096</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

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

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.9pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Interest expense, net<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(8</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(10</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(16</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(29</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.9pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Other income (expense), net<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">17</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">30</div>
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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">&#160;&#160;&#160;Total Other Income (Expense)</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 5.02pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">9</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(11</div>
</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">14</div>
</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(29</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,269</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(2,078</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,125</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(4,135</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(3,922</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left; MARGIN-RIGHT: 5.05pt">NET LOSS<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(1,269</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(2,078</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">$</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(5,047</div>
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<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 5.05pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Weighted average number of shares used in basic and diluted net loss per common share calculation<font style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">.</font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">2,594,743</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">2,602,329</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">2,594,764</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">2,600,248</div>
</td>
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</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">$</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(0.49</div>
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<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(0.80</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">(1.94</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>

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

<div><br>
</div>

<div><br>
</div>

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

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Condensed Consolidated Balance Sheets &#8211; UNAUDITED</div>

<div><br>
</div>

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

<div><br>
</div>

<table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px" valign="bottom">
<div style="TEXT-ALIGN: left"><a name="_Aci_An1_284129"><!--Anchor--></a>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">June 30, 2014</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">December 31, 2013</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

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

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 20.05pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Cash and cash equivalents<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">6,125</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">7,183</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 19.3pt; MARGIN-RIGHT: 12.6pt; TEXT-INDENT: -5.05pt">Restricted cash<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,500</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,500</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 19.3pt; MARGIN-RIGHT: 12.6pt; TEXT-INDENT: -5.05pt">Accounts receivable, less allowances of $45 and $42, respectively</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">3,442</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">3,237</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 19.3pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Inventories, net<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">4,551</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">4,629</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 19.3pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Prepaid expenses and other current assets<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">307</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">405</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">Total current assets<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">15,925</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">16,954</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 5.05pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">&#160;&#160;&#160;&#160;Property, plant and equipment, net<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">3,737</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">3,986</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-RIGHT: 5.05pt">&#160;&#160;&#160;&#160;Other assets, net<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">814</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">323</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: 13.5pt">Total assets<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">20,476</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">21,263</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 5.05pt; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: -5.05pt">LIABILITIES AND STOCKHOLDERS' EQUITY</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Note payable to bank<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,500</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,181</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Accounts payable<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,117</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,978</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Accrued restructuring expense<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">350</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">70</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Other current liabilities<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,643</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">1,279</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Total Liabilities<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">5,610</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">4,508</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 13.5pt; MARGIN-RIGHT: 5.05pt">Stockholders' Equity<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">14,866</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">16,755</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-RIGHT: 5.05pt; TEXT-INDENT: 13.5pt">Total Liabilities and Stockholders' Equity<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">20,476</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">21,263</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

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

<div><br>
</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Reconciliations of GAAP to Non-GAAP Measures</div>

<div><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: justify">To supplement our condensed consolidated financial statements which are presented in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company uses non-GAAP additional measures of operating results, net earnings and earnings per share adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core business segment operational results.&#160; The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.</div>

<div style="FONT-WEIGHT: normal"><br>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: normal; TEXT-ALIGN: left"><u>Reconciliation of GAAP Loss Before Income Taxes to Non-GAAP Adjusted EBITDA Income (Loss)</u></div>

<div><br>
</div>

<table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">For the period ended June 30, 2014 (000's, except shares and per share amounts)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Three months</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Six months</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top" valign="bottom">
<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">
<div></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">
<div></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Net loss before income taxes<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,269</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(2,078</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Interest expense<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">8</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">16</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Depreciation and amortization<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">238</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">473</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Non-cash stock compensation<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">96</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">186</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: One-time restructuring expense<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">397</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">--</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Adjusted EBITDA loss<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(530</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,403</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Weighted average number of shares used in basic and diluted EPS calculation</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,594,743</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,594,764</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

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

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Adjusted EBITDA loss per share<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(0.21</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(0.54</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>
</table>

<div><br>
</div>

<div><br>
</div>

<table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">For the period ended June 30, 2013 (000's, except shares and per share amounts)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Three months</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Six months</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="VERTICAL-ALIGN: top" valign="bottom">
<div>&#160;</div>
</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">
<div></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">
<div></div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Net loss before income taxes<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(829</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(1,125</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Interest expense<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">10</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">29</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Depreciation and amortization<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">248</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">488</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 9pt">Add: Non-cash stock compensation<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">143</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">253</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Adjusted EBITDA income<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(428</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(355</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div>&#160;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 76%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Weighted average number of shares used in basic and diluted EPS calculation</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,602,329</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">2,600,248</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

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

<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif; TEXT-ALIGN: left">Adjusted EBITDA loss per share<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 6pt">&#160;&#160;</font></div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(0.16</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: ''Times New Roman'', Times, serif">(0.14</div>
</td>
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