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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001104659-01-500538.txt : 20010515
<SEC-HEADER>0001104659-01-500538.hdr.sgml : 20010515
ACCESSION NUMBER:		0001104659-01-500538
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010514

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NORTECH SYSTEMS INC
		CENTRAL INDEX KEY:			0000722313
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS, NEC [3679]
		IRS NUMBER:				411681094
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		
		SEC FILE NUMBER:	000-13257
		FILM NUMBER:		1631741

	BUSINESS ADDRESS:	
		STREET 1:		641 EAST LAKE ST
		STREET 2:		SUITE 234
		CITY:			WAYZATA
		STATE:			MN
		ZIP:			55391
		BUSINESS PHONE:		6124734102

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DSC NORTECH INC
		DATE OF NAME CHANGE:	19901217

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DIGIGRAPHIC SYSTEMS CORP
		DATE OF NAME CHANGE:	19881113
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>j0675_10q.htm
<TEXT>

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<head>
<TITLE>Prepared by MerrillDirect</TITLE>
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<p align=center><b><font size=3>SECURITIES AND
EXCHANGE COMMISSION<br>
WASHINGTON,&nbsp; D.C. 20549</font></b><font><br>
<b>FORM 10-Q</b></font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=3 face=Wingdings>x</font><font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></p>

<p><font size=3>For
the quarterly period ended March 31, 2001.</font></p>

<p><font size=3 face=Wingdings>o</font><font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></p>

<p><font size=3>For
the Transition period from ___________ to ___________.</font></p>

<p><b><font size=3>Commission File Number 0-13257.</font></b></p>

<p><font size=3 face=Times>&nbsp;</font></p>

<div align=center>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="100%" valign=top><b><font size=3   face=Times>NORTECH&nbsp;
  SYSTEMS&nbsp; INCORPORATED</font></b><div align=center><b><font size=3   face=Times><hr size=2 width="80%" noshade color=black align=center></font></b></div></td>
 </tr>
 <tr>
  <td  align=center width="100%" valign=top><font size=2>(Exact name of registrant as specified in its chapter)</font></td>
 </tr>
</TABLE>

</div>

<p align=center><b><font size=3>&nbsp;</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="49%" colspan=2 valign=top><b><font size=3>MINNESOTA</font></b>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td  align=center width="50%" colspan=2 valign=top><b><font size=3>41-1681094</font></b>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td  align=center width="49%" colspan=2 valign=top><font size=2>(State of other
  jurisdiction of</font></td>
  <td  align=center width="50%" colspan=2 valign=top><font size=2>(I.R.S. Employer</font></td>
 </tr>
 <tr>
  <td  align=center width="49%" colspan=2 valign=top><font size=2>Incorporation or
  organization)</font></td>
  <td  align=center width="50%" colspan=2 valign=top><font size=2>Identification No.)<br><br></font></td>
 </tr>
 <tr>
  <td  align=right width="33%" valign=top><b><font size=3>1120 Wayzata Blvd East</font></b>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="33%" colspan=2 valign=top><font size=3>&nbsp;&nbsp;&nbsp;&nbsp;
  <b>Suite 201,&nbsp;&nbsp;&nbsp;&nbsp; Wayzata, MN</b></font>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="33%" valign=top><b><font size=3>55391</font></b>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td  align=center width="66%" colspan=3 valign=top><font size=2>(Address of principal
  executive offices)</font></td>
  <td width="33%" valign=top><font size=2>(Zip
  Code)<br><br></font></td>
 </tr>
 <tr>
  <td  align=center width="49%" colspan=2 valign=top>&nbsp;</td>
  <td  align=center width="50%" colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>&nbsp;</b></font><b><font>(952) 473-4102</font></b>
<hr size=2 width="40%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>(Registrant's
  telephone number, including area code)</font></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>Securities
  registered pursuant to Section 12(b) of the Act:</font></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>None</font></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top>
<hr size=2 width="40%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>Securities
  registered pursuant to Section 12(b) of the Act:</font></td>
 </tr>
 <tr>
  <td width="100%" colspan=4 valign=top><font size=2>Common
  Stock,&nbsp; $.01 per share per value.</font></td>
 </tr>

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  <td width=253></td>
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  <td width=253></td>
 </tr>
</TABLE>

<p><font size=2>Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.</font></p>

<p align=center><font size=2>YES&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2 face=Wingdings>x</font><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NO&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2 face=Wingdings>o</font></p>





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<hr size=2 width="100%" noshade color=black align=right>


<PAGE>


<p><font size=2>&nbsp;</font></p>

<p><font size=2>APPLICABLE ONLY TO CORPORATE REGISTRANTS;</font></p>

<p><font size=2>Indicate the number of shares outstanding
of each of the issuer's classes of <br>
common stock, as of latest practicable data.</font></p>

<p><font size=2>As of April 30, 2001, there were
2,361,192 shares of the Company's $.01<br>
per share par value common stock outstanding.</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>(The remainder of this page was
intentionally left blank.)</font></p>

<PAGE>


<p align=center><font size=3 face=Times>&nbsp;</font></p>

<p align=center><font size=2>NORTECH
SYSTEMS INCORPORATED<br>
FORM 10-Q<br>
QUARTER ENDED MARCH 31, 2001</font></p>

<p align=center><b><font size=2>INDEX</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="93%" colspan=3 valign=bottom><font size=2>PART
  I&nbsp; -&nbsp;
  FINANCIAL INFORMATION</font></td>
  <td  align=right width="6%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top>&nbsp;</td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top><font size=2><a
  href="#NORTECH_SYSTEMS_INCORPORATED_CONSOLIDATE"   title="Click to goto NORTECH SYSTEMS INCORPORATED&#11;CONSOLIDATED BALANCE SHEETS&#11;MARCH 31, 2001 AND DECEMBER 31, 2000">Item
  1-</a></font></td>
  <td width="74%" valign=top><font size=2><a
  href="#NORTECH_SYSTEMS_INCORPORATED_CONSOLIDATE"   title="Click to goto NORTECH SYSTEMS INCORPORATED&#11;CONSOLIDATED BALANCE SHEETS&#11;MARCH 31, 2001 AND DECEMBER 31, 2000">Financial
  Statements<br></a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top>&nbsp;</td>
  <td width="74%" valign=top><font size=2><a
  href="#NOTES_TO_CONDENSED_CONSOLIDATED_FINANCIA"   title="Click to goto NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS">Notes
  to Condensed Consolidated Financial Statements</a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top>&nbsp;</td>
  <td width="74%" valign=top>&nbsp;</td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top><font size=2><a
  href="#ITEM_2__MANAGEMENTS_DISCUSSION_AND_ANALY"   title="Click to goto ITEM 2.   MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.">Item
  2-</a></font></td>
  <td width="74%" valign=top><font size=2><a
  href="#ITEM_2__MANAGEMENTS_DISCUSSION_AND_ANALY"   title="Click to goto ITEM 2.   MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.">Management's
  Discussion and Analysis of Financial Condition<br></a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top>&nbsp;</td>
  <td width="74%" valign=top><font size=2><a
  href="#ITEM_2__MANAGEMENTS_DISCUSSION_AND_ANALY"   title="Click to goto ITEM 2.   MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.">And
  Results of Operations</a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top>&nbsp;</td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top><font size=2>PART
  II&nbsp; -&nbsp;
  OTHER INFORMATION</font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top>&nbsp;</td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="8%" valign=top><font size=2><a
  href="#Item_6__Exhibits_and_Reports_on_Form_8K_"   title="Click to goto Item 6.  Exhibits and Reports on Form 8-K.">Item 6-</a></font></td>
  <td width="74%" valign=top><font size=2><a
  href="#Item_6__Exhibits_and_Reports_on_Form_8K_"   title="Click to goto Item 6.  Exhibits and Reports on Form 8-K.">Exhibits and
  Reports on Form 8-K</a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top>&nbsp;</td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="93%" colspan=3 valign=top><font size=2><a   href="#SIGNATURES" title="Click to goto SIGNATURES">SIGNATURES</a></font></td>
  <td  align=right width="6%" valign=top>&nbsp;</td>
 </tr>
</TABLE>

<PAGE>


<p align=center><a name="NORTECH_SYSTEMS_INCORPORATED_CONSOLIDATE"><b><font size=2>NORTECH SYSTEMS INCORPORATED<br>
CONSOLIDATED BALANCE SHEETS<br>
MARCH 31, 2001 AND DECEMBER 31, 2000</font></b></a></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>MARCH 31</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>DECEMBER 31</font></b></td>
 </tr>
 <tr>
  <td width="70%" valign=bottom><b><font size=2>ASSETS</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>2001</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>2000</font></b></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=center width="14%" valign=top><b><font   size=2>(UNAUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>(AUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Current Assets</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Cash and cash equivalents</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$197,972</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$527,998</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accounts receivable, net</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>8,557,843</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>8,580,791</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Inventories:</font></td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Finished goods</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>2,085,720</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>1,298,626</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Work in process</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>2,020,297</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,848,025</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Raw materials</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>9,073,042</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>8,448,484</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total inventories</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$13,179,059</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$11,595,135</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;</font>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Prepaid expenses and other</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>49,644</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>47,462</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Deferred Tax Asset</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,372,000</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,422,000</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net Current Assets of
  Discontinued Operations</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>0</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>0</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Total current assets</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$23,356,518</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$22,173,386</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>PLANT, Property, and Equipment (at Cost)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Land and Building/leaseholds</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$4,426,249</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$4,386,421</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Manufacturing equipment</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>4,775,662</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>4,594,607</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Office and other equipment</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>2,402,752</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>2,325,189</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=top><font   size=2>$11,604,663</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$11,306,217</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Less accumulated
  depreciation and amortization</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>(5,333,122)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>(4,987,805)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Net Property&nbsp; and Equipment for
  Continuing Operations</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$6,271,541</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$6,318,412</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Other Assets</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Goodwill and other
  intangible assets</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>82,097</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>99,750</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Deferred tax asset</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>6,000</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>31,000</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Other assets from
  Discontinued Operations</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>26,561</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>30,401</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Total Other Assets from Continuing Operations</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$114,658</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>161,151</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$29,742,717</font>
<hr size=2 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$28,652,949</font>
<hr size=2 width="95%" noshade color=black align=right></td>
 </tr>
</TABLE>

<p align=center><font size=2>See notes to consolidated financials statements</font></p>

<PAGE>


<p align=center><b><font size=2>NORTECH SYSTEMS INCORPORATED <br>
CONSOLIDATED BALANCE SHEETS<br>
MARCH 31, 2001 AND DECEMBER 31, 2000</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>SEPT. 30</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>DECEMBER 31</font></b></td>
 </tr>
 <tr height=16>
  <td width="70%" height=16 valign=bottom><b><font size=2>LIABILITIES AND SHAREHOLDERS'
  EQUITY</font></b></td>
  <td  align=center width="14%" height=16 valign=bottom><b><font   size=2>2000</font></b></td>
  <td  align=center width="14%" height=16 valign=bottom><b><font   size=2>2000</font></b></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>(UNAUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>(AUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Current Liabilities:</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Current maturities of
  long-term debt</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$3,280,081</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$3,333,401</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accounts payable</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>5,941,037</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>5,743,836</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Accrued payrolls and
  commissions</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>2,054,727</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,668,748</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accured Income Taxes</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>(8,000)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>182,330</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Other</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,064,366</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>1,200,296</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net Current Liabilities from
  Discontinued Operations</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>452,641</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>411,236</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Current
  Liabilities</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$12,784,852</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$12,539,847</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Long-Term Debt</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Notes Payable (net of
  current maturities shown above)</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$8,015,224</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$7,665,536</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Shareholders' Equity:</font></td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Preferred Stock, $1 par
  value; 1,000,000 shares authorized; 250,000 shares<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; issued and&nbsp; outstanding</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$250,000</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$250,000</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Common Stock - $.01 par
  value; 9,000,000 shares authorized; 2,361,192 and<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,361,055 shares issued and
  outstanding.</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>23,612</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>23,611</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Additional paid-in capital</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>12,159,004</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>12,158,036</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Accumulated deficit</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>(3,489,975)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>(3,984,081)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Shareholders'
  Equity</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$8,942,641</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$8,447,566</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Total Liabilities &amp;
  Shareholders' Equity</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$29,742,717</font>
<hr size=2 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$28,652,949</font>
<hr size=2 width="95%" noshade color=black align=right></td>
 </tr>
</TABLE>

<p align=center><font size=2>See notes to consolidated financials statements</font></p>

<PAGE>


<p align=center><b><font size=2>NORTECH SYSTEMS INCORPORATED<br>
CONSOLIDATED STATEMENTS OF INCOME (LOSS)<br>
FOR THE THREE MONTHS ENDED<br>
MARCH 31, 2001 AND MARCH 31, 2000</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="60%" valign=bottom>&nbsp;</td>
  <td  align=center width="21%" valign=bottom><b><font   size=2>MARCH.&nbsp; 30</font></b></td>
  <td  align=center width="18%" valign=bottom><b><font   size=2>MARCH.&nbsp; 30</font></b></td>
 </tr>
 <tr>
  <td  align=center width="60%" valign=bottom>&nbsp;</td>
  <td  align=center width="21%" valign=bottom><b><font   size=2>2001</font></b></td>
  <td  align=center width="18%" valign=bottom><b><font   size=2>2000</font></b></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=center width="21%" valign=bottom><b><font   size=2>(Unaudited)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="18%" valign=bottom><b><font   size=2>(Unaudited)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="21%" valign=bottom>&nbsp;</td>
  <td  align=right width="18%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="21%" valign=bottom>&nbsp;</td>
  <td  align=right width="18%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Sales</font></td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff"><font   size=2>$14,845,304</font></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>$12,568,981</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="21%" valign=bottom>&nbsp;</td>
  <td  align=right width="18%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Cost of Sales</font></td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff"><font   size=2>12,152,032</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>10,355,960</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="21%" valign=bottom>&nbsp;</td>
  <td  align=right width="18%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp; Gross Profit</font></td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff"><font   size=2>$2,693,272</font></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>$2,213,021</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="21%" valign=bottom>&nbsp;</td>
  <td  align=right width="18%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Selling, General and Admin.</font></td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff"><font   size=2>1,597,428</font></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>1,322,899</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Interest Income</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>(5,418)</font></td>
  <td  align=right width="18%" valign=bottom><font   size=2>(6,119)</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Misc. (Income) Expense, net</font></td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff"><font   size=2>68,650</font></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>(55,281)</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Interest Expense</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>241,506</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom><font   size=2>295,302</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;Net Income Before Income Tax</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>$791,106</font></td>
  <td  align=right width="18%" valign=bottom><font   size=2>$656,220</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp; Income Tax</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>297,000</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom><font   size=2>246,000</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;Net Income</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>$494,106</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom><font   size=2>$410,220</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Income/(Loss) per Share of Common Stock</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>$0.21</font>
<hr size=2 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom><font   size=2>$0.17</font>
<hr size=2 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="21%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Weighted Average Number of Shares Outstanding</font></td>
  <td  align=right width="21%" valign=bottom><font   size=2>2,361,124</font>
<hr size=2 width="95%" noshade color=black align=right></td>
  <td  align=right width="18%" valign=bottom><font   size=2>2,352,933</font>
<hr size=2 width="95%" noshade color=black align=right></td>
 </tr>
</TABLE>

<p align=center><font size=2>See notes to consolidated financials statements</font></p>

<PAGE>


<p align=center>&nbsp;</p>

<p align=center><b><font size=2>NORTECH SYSTEMS INCORPORATED<br>
CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
FOR THE PERIODS ENDED<br>
MARCH 31, 2001 AND MARCH 31, 2000</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="15%" valign=bottom><b><font   size=2>MARCH 31</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>MARCH 31</font></b></td>
 </tr>
 <tr>
  <td  align=center width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="15%" valign=bottom><b><font   size=2>2001</font></b></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>2000</font></b></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=center width="15%" valign=bottom><b><font   size=2>(UNAUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="14%" valign=bottom><b><font   size=2>(UNAUDITED)</font></b><div align=right><b><font   size=2><hr size=1 width="95%" noshade color=black align=right></font></b></div></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash Flows from Operating Activities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Net Income</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$494,106</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$410,220</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Adjustments to reconcile net
  income to</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>net cash provided (used) bycontinuing operation:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Depreciation and
  amortization</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>362,970</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>249,969</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Deferred Taxes</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>75,000</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>0</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Changes in Operating Assets and Liabilities:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accounts receivable</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>22,948</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>(1,566,088)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Inventories</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>(1,583,924)</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>(723,479)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Prepaid expenses</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>(2,182)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>(12,660)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Other assets</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>(13,119)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accounts payable</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>197,201</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>1,089,773</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Accrued payrolls &amp;
  commisions</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>385,979</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>519,358</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Accured income taxes</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>(190,330)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>0</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Other liabilities</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>(135,930)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>225,482</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp; Net cash Provided (Used) by
  Continuing Operations</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$(374,162)</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$179,456</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp; Net Cash (Used) by
  Discontinued Operations</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>45,245</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>270,128</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net Cash Provided (Used) by
  Operating Activities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$(328,917)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$449,584</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash Flows from Investing Activities:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Acquistion of equipment</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$(298,446)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$(680,692)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Net Cash Used by Investing
  Activities</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$(298,446)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom><font   size=2>$(680,692)</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Cash Flows from Financing Activities:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Proceeds from notes payables</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$2,325,000</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$1,050,874</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Payments on notes and
  capital lease payable</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>(2,028,632)</font></td>
  <td  align=right width="14%" valign=bottom><font   size=2>(930,345)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Issuance of common stock</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$969</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$3,493</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Cash Provided by
  Financing Activities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$297,337</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$124,022</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Net Decrease in Cash and Cash Equivalents</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$(330,026)</font></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$(107,086)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash and Cash Equivalents -Beginning</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>527,998</font>
<hr size=1 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>453,500</font>
<hr size=1 width="95%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash and Cash Equivalents -Ending</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$197,972</font>
<hr size=2 width="95%" noshade color=black align=right></td>
  <td  align=right width="14%" valign=bottom bgcolor="#cceeff"><font   size=2>$346,414</font>
<hr size=2 width="95%" noshade color=black align=right></td>
 </tr>
</TABLE>

<p align=center><font size=2>See notes to consolidated financials statements</font></p>

<PAGE>


<p><a name="NOTES_TO_CONDENSED_CONSOLIDATED_FINANCIA"><b><font size=2>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font></b></a></p>

<p><font size=2>NOTE 1.&nbsp;
BASIS OF PRESENTATION&nbsp;&nbsp;&nbsp; </font></p>

<p><font size=2>The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the rules and regulations of the Securities and Exchange
Commission.&nbsp; Accordingly, they do not
include all of the financial information and footnotes required by generally
accepted accounting principles for complete financial statements.&nbsp; In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. </font></p>

<p><font size=2>The operating results of the interim
periods presented are not necessarily indicative of the results expected for
the year ending December 31, 2001 or for any other interim period.&nbsp; The accompanying condensed consolidated
financial statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 2000 included in
the Company&#146;s Annual Report Form 10-K for the year ended December 31, 2000 as
filed with the Securities and Exchange Commission.&nbsp; </font></p>

<p><font size=2>NOTE 2.&nbsp;
DERIVATIVES AND HEDGING ACTIVITES</font></p>

<p><font size=2>In June 1998, Statement of Financial
Accounting Standards No. 133, &#147;Accounting for Derivative Instruments and
Hedging Activities&#148; was issued and in June 2000, it was amended by Statement of
Financial Accounting Standard No. 138, &#147;Accounting for Certain Derivative
Instruments and Certain Hedging Activities&#148; (collectively, &#147;new derivative
accounting&#148;).&nbsp; In reviewing the
provisions of the standard in comparison to our practices, Nortech Systems Inc.
does not engage in transactions that constitute derivatives or hedging
activities.&nbsp; Thus, the new derivative
accounting had no impact on Nortech Systems, Inc. consolidated net income or
shareholders&#146; equity.&nbsp; </font></p>

<p><a name="ITEM_2__MANAGEMENTS_DISCUSSION_AND_ANALY"><b><font size=2>ITEM 2.&nbsp;&nbsp; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.</font></b></a></p>

<p><font size=2>(1.) <u>Results of Operations for Period
Ended March 31, 2001</u></font></p>

<p><font size=2>For the quarter ended March 31, 2001, the
Company had revenues of $14,845,304 compared to revenues of $12,568,981 for the
quarter ended March 31, 2000.&nbsp; The
increase in revenues resulted primarily from the additional revenues generated
from internal growth.&nbsp; The net income
for the three months ended March 31, 2001 was $494,106 or $.21 per share,
compared to a net income of $410,220 or $.17 per share, for the three months
ended March 31, 2000.&nbsp; The favorable
variance in net income for the quarter ended March 31, 2001 over the prior year
quarter was the result of realizing profits on additional revenues that
required no minimal additional fixed costs.&nbsp;
</font></p>

<p><font size=2>Company's 90 day order backlog was
$10,550,000 as of March 31, 2001, compared to $10,600,000 at the beginning of
the quarter.&nbsp; Based on the current
conditions, the Company anticipates revenue levels in the second quarter of
2001 to be consistent with first quarter of 2001.</font></p>

<PAGE>


<p><font size=2>(2.) <u>Liquidity and Capital Resources.<br>
</u>The Company's working capital increased to $10,546,700 during the first
quarter of 2001, compared to $9,633,539 as of December 31, 2000.&nbsp; The Company believes that its financial
stability will continue to improve during 2001 and would expect that its
operating cash flow and available credit faculties will be sufficient to fund
the expected growth in the near term.</font></p>

<p><u><font size=2>Forward-Looking
Statements</font></u></p>

<p><font size=2>Those statements in the foregoing report
that are not historical facts are forward-looking statements made pursuant to
the safe-harbor provisions of the Private Securities Litigation Reform Act of
1995.&nbsp; Such statements generally will be
accompanied by words such as &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;expect,&#148;
&#147;forecast,&#148; &#147;intend,&#148; &#147;possible,&#148; &#147;potential,&#148; &#147;predict,&#148; &#147;project,&#148; or other
similar words that convey the uncertainty of future events or outcomes.&nbsp; Although Nortech Systems, Inc. believes
these forward-looking statements are reasonable, they are based upon a number
of assumptions concerning future conditions, any or all of which may ultimately
prove to be inaccurate.&nbsp; Forward-looking
statements involve a number of risks and uncertainties.&nbsp; Important factors that could cause actual
results to differ materially from the forward-looking statements include,
without limitation:</font></p>

<dir>
<p><font size=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Volatility in the marketplace which
may affect market supply and demand for Nortech Systems, Inc.&#146;s products;<br>
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increased competition;<br>
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in the reliability
and efficiency of the Company&#146;s operating facilities or those of third parties;<br>
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Risks related to availability
of labor;<br>
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General economic, financial
and business conditions which could affect Nortech Systems, Inc.&#146;s financial<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; condition and results of
operations.</font></p>
</dir>

<p><font size=2>The factors identified above are believed
to be important factors) but not necessarily all of the important factors) that
could cause actual results to differ materially from those expressed in any
forward-looking statement made by Nortech Systems, Inc.&nbsp; Unpredictable or unknown factors not
discussed herein could also have material adverse effects on forward-looking
statements.&nbsp; All forward-looking
statements included in this Form 10-Q are expressly qualified in their entirety
by the forgoing cautionary statements.&nbsp;
The Company undertakes no obligations to update publicly any
forward-looking statement (or its associated cautionary language) whether as a
result of new information or future events.&nbsp;
</font></p>

<PAGE>


<p align=center><b><font size=2>PART II&nbsp; - OTHER
INFORMATION</font></b></p>

<p><a name="Item_6__Exhibits_and_Reports_on_Form_8K_"><b><font size=2>Item 6.&nbsp; Exhibits and Reports on Form 8-K.</font></b></a></p>

<p><font size=2>None</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>(The remainder of this page was
intentionally left blank.)</font></p>

<PAGE>


<p>&nbsp;</p>

<p align=center><a name=SIGNATURES><b><font size=2>SIGNATURES</font></b></a></p>

<p><font size=2>Pursuant to the requirements of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.</font></p>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="37%" valign=top><font size=2>Dated:&nbsp; May 11, 2001</font></td>
  <td width="62%" colspan=2 valign=top><font size=2>NORTECH
  SYSTEMS INCORPORATED</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top><font size=2>By:/s/</font></td>
  <td width="55%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quentin
  E. Finkelson</font>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Quentin
  E. Finkelson</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Its
  President and Chief</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Executive
  Officer</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top><font size=2>By:/s/</font></td>
  <td width="55%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Garry
  M. Anderly</font>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Garry
  M. Anderly</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Principal
  Financial</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Officer
  and Principal</font></td>
 </tr>
 <tr>
  <td width="37%" valign=top>&nbsp;</td>
  <td width="6%" valign=top>&nbsp;</td>
  <td width="55%" valign=top><font size=2>Accounting
  Officer</font></td>
 </tr>
</TABLE>

<p><font size=2>&nbsp;</font></p>

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