<SEC-DOCUMENT>0001072613-14-000260.txt : 20140516
<SEC-HEADER>0001072613-14-000260.hdr.sgml : 20140516
<ACCEPTANCE-DATETIME>20140516125400
ACCESSION NUMBER:		0001072613-14-000260
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20140516
DATE AS OF CHANGE:		20140516

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NETWORK 1 TECHNOLOGIES INC
		CENTRAL INDEX KEY:			0001065078
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				113027591
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-190719
		FILM NUMBER:		14850613

	BUSINESS ADDRESS:	
		STREET 1:		445 PARK AVENUE
		STREET 2:		SUITE 1018
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		2128295770

	MAIL ADDRESS:	
		STREET 1:		445 PARK AVENUE
		STREET 2:		SUITE 1018
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NETWORK 1 SECURITY SOLUTIONS INC
		DATE OF NAME CHANGE:	19980629
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>form424_17657.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT #2
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<div><font style="FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; DISPLAY: inline">NETWORK-1 TECHNOLOGIES, INC.</font></div>

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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Filed Pursuant to Rule 424(b)(3)</font></div>

<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Registration No. 333-190719</font></div>

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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; DISPLAY: inline">PROSPECTUS SUPPLEMENT NO. 2</font></div>

<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">(To Prospectus dated April&#160;30, 2014)</font></div>

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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">This is a prospectus supplement to our prospectus dated April&#160;30, 2014 (the &#8220;Prospectus&#8221;) relating to the resale from time to time by selling stockholders of up to 6,079,186 shares of our common stock, including shares issuable upon exercise of outstanding warrants.&#160;&#160;On May 16, 2014, we filed with the Securities and Exchange Commission a Current Report on Form 8-K.&#160;&#160;The text of the Current Report on Form 8-K is attached to and a part of this supplement.</font></div>

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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">This prospectus supplement should be read in conjunction with the Prospectus and may not be delivered or utilized without the Prospectus.&#160;&#160;This prospectus supplement is qualified by reference to the Prospectus, except to the extent that the information provided by this prospectus supplement supersedes the information contained in the Prospectus.</font></div>

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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">The securities offered by the Prospectus involve a high degree of risk.&#160;&#160;You should carefully consider the &#8220;Risk Factors&#8221; referenced on pages 7-17 of the Prospectus in determining whether to purchase the common stock.</font></div>

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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">The date of this prospectus supplement is May&#160;16, 2014.</font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">_______________________</font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 16pt; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; DISPLAY: inline">Form 8-K</font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">CURRENT REPORT</font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Pursuant to Section 13 or 15(d) of the</font></div>

<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Securities Exchange Act of 1934</font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Date of Report (Date of earliest event reported):&#160;&#160;<font style="TEXT-DECORATION: underline; DISPLAY: inline"><font style="FONT-WEIGHT: bold">&#160;&#160;&#160;&#160; May 15, 2014&#160;&#160;&#160;&#160;&#160;</font></font></font></div>

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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 20pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 20pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 20pt; FONT-FAMILY: times new roman">Network-1 Technologies, Inc.</font></font></font></div>

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<td width="33%" style="TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">File Number)</font></td>
<td width="33%" style="TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Identification No.)</font></td>
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<div style="TEXT-ALIGN: center; MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline"><font style="FONT-WEIGHT: bold">445 Park Avenue, <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite</font> 912, New York, New York 10022</font></font></font></div>

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<div style="MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>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-STYLE: italic; DISPLAY: inline">see</font> General Instruction A.2. below):</font></div>

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<div style="MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">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.</font></div>

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<td align="left" nowrap valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">/s/ <font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Corey M. Horowitz</font></font></font></font></td>
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<td align="left" nowrap valign="bottom" width="40%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Name:&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Corey M. Horowitz</font></font></font></font></td>
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<td valign="top" width="40%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Title:&#160;&#160;&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Chairman &amp; Chief Executive Officer</font></font></font></font></td>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Network-1 Technologies, Inc.</font></div>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">(212) 829-5770</font></div>
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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline"><font style="FONT-WEIGHT: bold; DISPLAY: inline">New York, New York May 15, 2014 - </font>Network-1 Technologies, Inc. (OTC BB: NTIP) today announced financial results for the quarter ended March 31, 2014.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Network-1 reported net income of net income of $1,396,000 or $0.05 per share (basic) and $0.05 per share (diluted) for the three months ended March&#160;31, 2014 compared with net income of $1,392,000 or $0.06 per share (basic) and $0.05 per share (diluted) for the three months ended March&#160;31, 2013.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline"><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">First quarter 2014 non-cash patent amortization expenses were $409,000 as compared to $16,000 for the first quarter 2013 due primarily to an increase in amortization expenses related to patent portfolios acquired by Network-1 during 2013.&#160;&#160;Non-cash compensation expenses during the first quarter were $27,000 and $112,000, respectively. Exclusive of such non-cash expenses for patent amortization and compensation, net income for the first quarter of 2014</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">&#160;</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">would have been</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff"> $1,679,000 or $0.06 per share (basic) and $0.06 per share (diluted) as compared to</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">&#160;</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">net income of</font><font style="DISPLAY: inline; BACKGROUND-COLOR: #ffffff">&#160;&#160;$1,471,000 or $0.06 per share (basic) and $0.05 per share (diluted) for the first quarter 2013.</font></font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">At March&#160;31, 2014, Network-1 had net operating loss carryforwards (NOLs) totaling approximately $23,145,000 expiring through 2029, with a future tax benefit of approximately $7,869,000. At March 31, 2014 and March&#160;31, 2013, $4,948,000 and $5,579,000, respectively, were recorded as a deferred tax asset on the Company&#8217;s balance sheet.&#160;&#160;During the three month period ended March&#160;31, 2014 as a result of income (before taxes) for the quarterly period of $2,152,000, $756,000 was recorded as income tax expense and the deferred tax asset was reduced by $711,000 to $4,948,000.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">&#8220;It was a record quarter for Network-1&#8221;, commented Corey M. Horowitz, Chairman and CEO of Network-1.&#160;&#160;&#8220;Our licensee running royalty revenue from our Remote Power Patent for the quarter was the largest to date and we now have 16 licensees to this important technology, including some of the largest technology companies in the world&#8221;, he continued.&#160;&#160;&#8220;During the first quarter, we also received two additional patents from the Cox patent portfolio as we continue to develop that technology and we have begun our monetization efforts thereby continuing to expand upon our goal of diversifying our IP monetization efforts across several valuable portfolios,&#8221; he said.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">On April&#160;4, 2014, Network-1 initiated litigation against Google and YouTube in the United States District Court for the Southern District of New York for infringement of several of its patents within Network-1&#8217;s Cox Patent Portfolio which relate to the identification of media content on the Internet.&#160;&#160;The lawsuit alleges that Google and YouTube have infringed and continue to infringe certain of Network-1&#8217;s patents by making, using, selling and offering to sell unlicensed systems and related products and services, which include YouTube&#8217;s Content ID system.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">On May 23, 2013, through its wholly-owned subsidiary Mirror Worlds Technologies, LLC, Network-1 initiated patent litigation in the United States District Court for the Eastern District of Texas, Tyler Division, against Apple, Inc., Microsoft, Inc., Hewlett-Packard Company, Lenovo Group Ltd., Lenovo (United States), Inc., Dell, Inc., Best Buy Co., Inc., Samsung Electronics America, Inc. and Samsung Telecommunications America L.L.C.,&#160;for infringement of the &#8216;227 Patent (one of the patents Network-1 acquired as part of the acquisition of the Mirror Worlds Patent Portfolio).&#160;&#160;Network-1 seeks, among other things, monetary damages based upon reasonable royalties.&#160;&#160;The lawsuit alleges that the defendants have infringed and continue to infringe the claims of the &#8216;227 Patent by making, selling, offering to sell and using infringing products including Mac OS and Windows operating systems and personal computers and tablets that include versions of those operating systems, and by encouraging others to make, sell, and use these products.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Consistent with its activities over the past several years, Network-1 plans on continuing its licensing activities relating to the Remote Power Patent and the development and monetization of the Mirror Worlds Patent Portfolio and the Cox Patent Portfolio.&#160;&#160;In addition, Network-1 may acquire additional intellectual property assets in the future to develop, commercialize, license or otherwise monetize such intellectual property.&#160;&#160;Network-1&#8217;s acquisition strategy is to focus on acquiring high quality patents which management believes has the potential to generate significant licensing opportunities as Network-1 has achieved with respect to Remote Power Patent.&#160;&#160;Network-1&#8217;s Remote Power Patent has generated licensing revenue in excess of $60 million through March 31, 2014.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 36pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">Network-1 Technologies, Inc. is engaged in the development, licensing and protection of its intellectual property and proprietary technologies.&#160;&#160;Network-1 works with inventors and patent owners to assist in the development and monetization of their patented technologies. It currently owns twenty-one (21) patents covering various telecommunications and data networking technologies as well as technologies relating to document stream operating systems and the identification of media content.&#160;&#160;Network-1 currently has sixteen (16) license agreements with respect to its Remote Power Patent, which include, among others, license agreements with Cisco Systems, Inc., Cisco Linksys, Inc., Extreme Networks, Inc., Netgear Inc., Motorola Solutions, Inc., Allied Telesis, Inc., NEC Corporation and several other data networking vendors.&#160;&#160;The Remote Power Patent covers the remote delivery of power over Ethernet networks.&#160;&#160;The Remote Power Patent was granted by the U.S. Office of Patents and Trademarks on April 21, 2001 and expires on March 11, 2020.</font></div>

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<div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; FONT-STYLE: italic; DISPLAY: inline">This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements address future events and conditions concerning Network-1&#8217;s business plans. Such statements are subject to a number of risk factors and uncertainties as disclosed in the Network-1&#8217;s Annual Report on Form 10-K for the year ended December 31, 2013 and its Quarterly Report on Form 10-Q for the three months ended March&#160;31, 2014 including, among others, the continued validity of Network-1&#8217;s Remote Power Patent, the ability of Network-1 to successfully execute its strategy to acquire high quality patents with significant licensing opportunities, Network-1's ability to achieve revenue and profits from the Mirror Worlds Patent Portfolio and the Cox Patent Portfolio as well as intellectual property it may acquire in the future, the ability of Network-1 to enter into additional license agreements, the ability of Network-1 to continue to receive material royalties from its existing license agreements for its Remote Power Patent, the uncertainty of patent litigation, risks related to the Inter Partes Review proceeding and reexamination proceeding involving Network-1&#8217;s Remote Power Patent pending at the United States Patent and Trademark Office, the difficulty in Network-1 verifying royalty amounts owed to it by its licensees, Network-1's ability to enter into strategic relationships with third parties to license or otherwise monetize their intellectual property, the continued viability of the PoE market, future economic conditions and technology changes and legislative, regulatory and competitive developments. Except as otherwise required to be disclosed in periodic reports, Network-1 expressly disclaims any future obligation or undertaking to update or revise any forward-looking statement contained herein.</font></div>

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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Corey M. Horowitz, Chairman and CEO</font></div>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Network-1 Technologies, Inc.</font></div>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">(212) 829-5770</font></div>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">The condensed statements of operations and condensed balance sheets are attached.</font></div>

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<div style="TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Three Months Ended</font></div>

<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">March 31,</font></div>
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<div style="TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">2014</font></font></div>
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<div style="TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">2013</font></font></div>
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<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
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<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td colspan="3" valign="bottom" width="16%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td colspan="2" valign="bottom" width="15%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">ROYALTY REVENUE</font></div>
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<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">4,491,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">4,064,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
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<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">COST OF REVENUE</font></div>
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<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,314,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,225,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
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<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 9pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>GROSS PROFIT</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">3,177,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">2,839,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">OPERATING EXPENSES:</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">General and administrative</font></div>
</td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">598,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">662,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Depreciation and Amortization</font></div>
</td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">409,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">16,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Non-cash compensation</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">27,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">112,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 45pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">TOTAL OPERATING EXPENSES</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,034,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">790,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 45pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">OPERATING INCOME</font></div>
</td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">2,143,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">2,049,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">OTHER INCOME (EXPENSES):</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Interest income, net</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">9,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">6,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">INCOME BEFORE INCOME TAXES</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">2,152,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">2,055,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">INCOME TAXES (BENEFIT)</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Current</font></div>
</td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">45,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">48,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Deferred</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">711,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">615,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Total Income Taxes (Benefits)</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">756,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">663,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">NET INCOME</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,396,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,392,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Net Income per share &#160;</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Basic</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">0.05</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">0.06</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Diluted</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">0.05</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">0.05</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Weighted average number of common shares outstanding:</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Basic</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">25,775,573</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">25,013,484</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Diluted</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">27,793,669</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">27,455,394</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">NET INCOME</font></div>
</td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">1,396,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">1,392,000</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">OTHER COMPREHENSIVE INCOME NET OF TAX:</font></div>
</td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 2px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Unrealized gain (loss) arising during the period</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">(6,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">)&#160;&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">(5,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">)</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="64%" style="PADDING-BOTTOM: 4px">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">COMPREHENSIVE INCOME</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,390,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"><font style="DISPLAY: inline">1,387,000</font></font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr></table>
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<div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; DISPLAY: inline">&#160; </font></div>

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<div id="HDR">
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<div align="left">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; DISPLAY: inline">Condensed Balance Sheet as of March 31, 2014</font></div>
</div>

<div align="left">&#160;</div>

<div align="left">&#160;</div>

<div align="left">&#160;</div>

<div align="left">
<div align="center">
<table cellpadding="0" cellspacing="0" width="80%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Cash and cash equivalents</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">18,362,000</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;&#160;&#160;Total current assets</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">23,620,000</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;&#160;&#160;Total assets</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">33,629,000</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;&#160;&#160;Total current liabilities</font></div>
</td>
<td align="right" valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">1,638,000</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
<div style="MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;&#160;&#160;Total long term liabilities</font></div>
</td>
<td valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">-0-</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td align="left" valign="bottom" width="82%" style="PADDING-BOTTOM: 4px">
<div><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">Total stockholders' equity</font></div>
</td>
<td valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">$</font></td>
<td valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">31,991,000</font></td>
<td nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 4px; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
</tr><tr>
<td valign="bottom" width="82%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160; </font></td>
<td valign="bottom" width="2%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
<td nowrap valign="bottom" width="1%" style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline">&#160;</font></td>
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