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<SEC-DOCUMENT>0000897101-06-001074.txt : 20060515
<SEC-HEADER>0000897101-06-001074.hdr.sgml : 20060515
<ACCEPTANCE-DATETIME>20060515123815
ACCESSION NUMBER:		0000897101-06-001074
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20060331
FILED AS OF DATE:		20060515
DATE AS OF CHANGE:		20060515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELECTRO SENSORS INC
		CENTRAL INDEX KEY:			0000351789
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823]
		IRS NUMBER:				410943459
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09587
		FILM NUMBER:		06838577

	BUSINESS ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343-9108
		BUSINESS PHONE:		9529300100

	MAIL ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>electro062052_10qsb.htm
<DESCRIPTION>FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2006
<TEXT>
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<TITLE>Electro-sensors Form 10-QSB dated March 31, 2006 </TITLE>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=4>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=4>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2><b>Washington, DC 20549</b></font></p>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=6><b>Form 10-QSB</b> </FONT></P>


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<HR WIDTH="20%" COLOR="Black">


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<P ALIGN=CENTER><FONT face="Wingdings">x </FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE="3"><B>QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE<BR>SECURITIES EXCHANGE ACT OF 1934</B> </FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>For the quarterly
period ended March 31, 2006 </FONT></H1>

<P ALIGN=CENTER>
<font face=Wingdings>o </font><b><font size=3>TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT</font></B></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>FOR THE TRANSITION
PERIOD FROM&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TO
</FONT></H1>


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<P ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Commission File Number 0-9587</B> </FONT> </P>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=6>ELECTRO-SENSORS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<FONT SIZE="2">(Exact name of small business issuer as specified in its charter) </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>Minnesota</b></p>  </td>
        <td width="19" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="50%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>41-0943459</b></p>  </td> </tr>
    <tr >
        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(State or other jurisdiction of incorporation or<br> organization) </FONT></p> </td>
        <td width="19" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(IRS Employer Identification No.) </FONT></p> </td> </tr>
    <tr >
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>

</table>


<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b>6111 Blue Circle Drive</b><br> <b>Minnetonka, Minnesota 55343-9108</b></p>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>(Address of principal executive offices)</p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=3>(952) 930-0100</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>(Issuer&#146;s telephone number)</p>
<BR>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>Check whether the issuer (1) filed all reports required to be filed by Section 13 of 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.</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<font size=3>Yes </font><font face=Wingdings>x</font><font size=3>&nbsp;&nbsp;&nbsp;No&nbsp;</font><font face=Wingdings>o</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=3>
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
 Yes </font><font face=Wingdings>o</font><font size=3>&nbsp;&nbsp;&nbsp;No&nbsp;</font><font face=Wingdings>x</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>The number of shares outstanding of the registrant&#146;s Common Stock, $0.10 par value, on May 15, 2006 was 3,341,852.</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>
<font size=3>Transitional Small Business Disclosure Format (check one):  Yes </font><font face=Wingdings>o</font><font size=3>&nbsp;&nbsp;&nbsp;No&nbsp;</font><font face=Wingdings>x</font></p>
<BR>



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<DIV STYLE="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV STYLE="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>ELECTRO-SENSORS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Form 10-QSB</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>For the Period Ended March 31, 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>TABLE OF CONTENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="722" style='border-collapse:collapse'>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt;border-color:gray'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>PART I &#150; FINANCIAL INFORMATION</font></b></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_1_financial_statements">Item 1. Financial Statements</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#balance_sheets">Condensed Consolidated Balance Sheet &#150; As of  March 31, 2006</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#statements_of_operations">Condensed Consolidated Statements of Operations &#150; For the Three Months Ended March 31, 2006 and March 31, 2005</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#cash_flows">Condensed Consolidated Statements of Cash Flows &#150; For the Three Months Ended March 31, 2006 and March 31, 2005</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#notes">Notes to Condensed Consolidated Financial Statements</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_2_managements">Item 2. Management&#146;s Discussion and Analysis or Plan of Operation</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_3_controls">Item 3. Controls and Procedures</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>PART II &#150; OTHER INFORMATION</font></b></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_1_legal">Item 1. Legal Proceedings</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_2_unregistered">Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_3_defaults">Item 3. Defaults Upon Senior Securities</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_4_submission">Item 4. Submission of Matters to a Vote of Security Holders</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_5_other">Item 5. Other Information</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>
<A HREF="#item_6_exhibits">Item 6. Exhibits</A></font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2><A HREF="#signatures">SIGNATURES</A></font></B></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="722" valign=top style='padding:0in .7pt 0in .7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2><A HREF="#exhibit_index">EXHIBITS</A></font></B></p> </td> </tr></table>



<BR>
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<BR>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>PART I.   FINANCIAL INFORMATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_1_financial_statements">Item 1. Financial Statements</A></font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>ELECTRO-SENSORS, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CONDENSED CONSOLIDATED <A NAME="balance_sheets">BALANCE SHEETS</A></font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse" ALIGN="CENTER">
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        <TD WIDTH="85%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>March 31,</font></b><br> <b><font size=1>2006</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='padding:0in 0in .7pt 0in; border-bottom: 1px solid black'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>(unaudited)</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
  <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>ASSETS</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>CURRENT ASSETS</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Cash and Cash Equivalents </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="10" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <TD WIDTH="96" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8,312,000</font></b></p> </td>
        <TD WIDTH="17" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Available for Sale Securities </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6,338,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Trade Receivables, </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>586,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">less Allowance for Doubtful Accounts of $8,000 </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Inventories </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>825,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Other Current Assets </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>44,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Total Current Assets</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>16,105,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>PROPERTY AND EQUIPMENT, net</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,325,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom style='border-top:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=bottom style='border-top:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom style='padding:0in 0in .7pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>TOTAL ASSETS</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8; padding:0in 0in .7pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom style='border-bottom: solid black 3pt;background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="96" valign=bottom style='border-bottom: solid black 3pt;background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>17,430,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>CURRENT LIABILITIES</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Accounts Payable </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="96" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>115,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Accrued Expenses </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>160,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Deferred Revenue </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>56,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Accrued Income Tax </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>560,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Deferred Income Tax </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2,312,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total Current Liabilities</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,203,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>COMMITMENTS AND CONTINGENCIES</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>STOCKHOLDERS&#146; EQUITY</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Common Stock par value $0.10 per share; Authorized 10,000,000 shares; </FONT> </p>
<p style='margin-left:30.0pt;text-indent:4.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Issued and Outstanding 3,252,116 </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>325,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Additional Paid-in Capital </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,192,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Retained Earnings </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8,898,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:30.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Accumulated Other Comprehensive Income </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,812,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;</p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total Stockholders&#146; Equity</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14,227,000</font></b></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=bottom style='border-top:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="17" valign=bottom style='padding:0in 0in .7pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8; padding:0in 0in .7pt 0in">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=bottom style='border-bottom: solid black 3pt;background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td width="96" valign=bottom style='border-bottom: solid black 3pt;background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>17,430,000</font></b></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>


<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>See notes to condensed consolidated financial statements</font></p>



<BR><BR>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>ELECTRO-SENSORS, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>CONDENSED CONSOLIDATED <A NAME="statements_of_operations">STATEMENTS OF OPERATIONS</A></B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2><b>(Unaudited)</b> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse" ALIGN="CENTER">
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="75%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="7" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>Three Months Ended</B><br> <B>March</B>&nbsp;<B>31,</B> </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2006</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2005</B> </FONT> </p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Net Sales</B> </FONT> </p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9" valign=bottom style='background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,358,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">1,204,000 </FONT> </p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Cost of Goods Sold</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>516,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">445,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Gross Profit</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>842,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">759,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Operating Expenses:</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Selling and Marketing </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>308,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">308,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">General and Administrative </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>323,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">329,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Research and Development </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>138,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">204,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total Operating Expenses</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>769,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">841,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Operating Income/(Loss)</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>73,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(82,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'><FONT SIZE="2">
) </FONT></td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Non-operating Income (Expense):</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Gain on Sale of Investment Securities </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,230,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">135,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Interest Income </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>73,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">32,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Other Income </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">4,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Stock Option Compensation </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(8,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Equity in Losses of Equity Method Investee </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>0</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(11,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">)&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total Non-operating Income</B> </FONT> </p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,299,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">160,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Income before Income Taxes</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1,372,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">78,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Federal and State Income Taxes</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>552,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">27,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2"><B>Net Income</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$         </font></b></p> </td>
        <td width="73" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>820,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">51,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Other Comprehensive Income:</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-3.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Change in unrealized value of investments, net of income taxes </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$         </font></b></p> </td>
        <td width="73" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>548,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">496,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-3.25pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Reclassification adjustment for gains included in net income </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(734,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(77,000 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total Comprehensive Income</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 3pt; background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$         </font></b></p> </td>
        <td width="73" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>504,000</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 3pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">470,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Net Income per Share Data:</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Basic</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Net Income per Share </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$                             </font></b></p> </td>
        <td width="73" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>0.25</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0.02 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Weighted Average Shares </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,252,116</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">3,219,664 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Diluted</B> </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Net Income per Share </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$               </font></b></p> </td>
        <td width="73" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>0.25</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0.02 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Weighted Average Shares </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3,308,920</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">3,319,730 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Dividends Paid per Share</B> </FONT></p> </td>
        <td width="17" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$               </font></b></p> </td>
        <td width="73" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>0.04</font></b></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="77" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0.04 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
     </table>


<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2">See notes to condensed consolidated financial statements </FONT></p>



<BR>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>
ELECTRO-SENSORS, INC. AND SUBSIDIARIES</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>CONDENSED CONSOLIDATED STATEMENTS OF <A NAME="cash_flows">CASH FLOWS</A></B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>(Unaudited)</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse" ALIGN="CENTER">
    <tr >
        <TD WIDTH="78%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT> </p> </td>
        <td  colspan="7" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>Three Months Ended</B><br> <B>March 31,</B> </FONT> </p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT> </p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="1">&nbsp; </FONT> </p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT> </p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2006</B> </FONT> </p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT> </p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2005</B> </FONT> </p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT> </p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Cash Flows from Operating Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Net Income</B> </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>820,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">51,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Adjustments to reconcile Net Income to net cash used in operating activities: </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Depreciation </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>20,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">24,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Realized gain on Sale of Investments </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>(1,230,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(135,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Equity in losses of Equity Method Investee </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">11,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(Increase)/decrease in: </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Trade Receivables </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>(23,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(8,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Inventory </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>(31,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(12,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Other Current Assets </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>27,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">1,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"> </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Prepaid Income Taxes </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">27,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Accounts Payable </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>58,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">40,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Accrued Expenses </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>4,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">54,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Deferred Revenue </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>4,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">3,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-5.5pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Accrued Income Taxes </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>498,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Net Cash Provided by Operating Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>147,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">56,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Cash Flows from Investing Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Proceeds from Sale of Investments </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,235,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">136,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Purchase of Equity Securities </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Purchase of Property and Equipment </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(22,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Net Cash Provided by Investing Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt;background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,235,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt;background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">114,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Cash Flows from Financing Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Proceeds from Issuance of Stock </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">10,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Dividends Paid </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>(130,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(128,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Net Cash Used in Financing Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt;background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>(130,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2"><B>)</B> </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 3pt;background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(118,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Net Increase in Cash &amp; Cash Equivalents</B> </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,252,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">52,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Cash &amp; Cash Equivalents, Beginning </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>7,060,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">6,464,000 </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2">Cash &amp; Cash Equivalents, Ending </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 3pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT> </p> </td>
        <td width="56" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>8,312,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 3pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="62" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">6,516,000 </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Supplemental Schedule of Non-Cash Investing and Financing Activities</B> </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Net Change in Unrealized Gain/(Loss) on Investments </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT> </p> </td>
        <td width="56" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>299,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="62" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(676,000 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Cash Paid for: </FONT></p> </td>
        <td width="15" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="3" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="14" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="75%" VALIGN="top">
<p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Income Taxes </FONT></p> </td>
        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT> </p> </td>
        <td width="56" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>54,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT> </p> </td>
        <td width="62" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0 </FONT></p> </td>
        <td width="14" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    </table>



<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2">See accompanying notes to condensed consolidated financial statements </FONT></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<font size=2> <B>ELECTRO-SENSORS, INC. AND SUBSIDIARIES</B></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B><A NAME="notes">NOTES</A> TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>(Unaudited)</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>Note 1. Nature of Business</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
The accompanying consolidated financial statements include the accounts of Electro-Sensors, Inc. and its wholly owned subsidiaries, ESI Investment Company and Senstar Corporation. Senstar Corporation does not have any business transactions. Intercompany accounts, transactions and earnings have been eliminated in consolidation. The consolidated entity is referred to as &#147;the Company.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
Electro-Sensors, Inc. operates two distinct businesses. The first is the Controls Division, which manufactures and markets a complete line of speed monitoring and motor control systems for industrial machinery. The Controls Division utilizes leading-edge technology to continuously improve its products and make them easier to use. The Controls Division&#146;s goal is to manufacture the industry-preferred product for every market served. These products are sold through an internal sales staff, manufacturer&#146;s representatives, and distributors to a wide variety of manufacturers, OEM&#146;s and processors to monitor process machinery operations. The Controls Division markets its products to a number of different industries located throughout the United States and abroad.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
The second business is AutoData Systems (ADS). ADS designs and markets a desktop software based system that reads hand printed characters, checkmarks and bar code information from scanned or faxed forms. ADS products are designed to provide capabilities to automate data collection and are sold by internal sales staff to end users, resellers and developers in the United States, Canada, Europe and Asia.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
ESI Investment Company (INV) owns marketable securities. The Company&#146;s investments in marketable securities are subject to normal market risks. See Note 6 for additional information regarding its investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>Note 2. Basis of Presentation</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">
This report should be read together with the Company&#146;s annual report on Form 10-KSB for the year ended December 31, 2005, including the audited financial statements and footnotes therein. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">
It is the opinion of management that the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary to fairly state the financial position and results of operations for the three months ended March 31, 2006 and March 31, 2005. The results of interim periods may not be indicative of results to be expected for the year. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Note 3. Use of Estimates</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>Note 4. Revenue Recognition</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>
Revenue recognition of production monitoring equipment:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
In recognizing revenue, the Company applies the provisions of the Securities and Exchange Commission Staff Accounting Bulletin&nbsp;(SAB) No. 101 (as amended by SAB No. 104), Revenue Recognition. The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed and determinable and collection of the resulting receivable is reasonably assured. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>
Software revenue recognition:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>
The Company recognizes revenue upon shipment of its character recognition software. The product is sold to the end user and risk of loss is transferred, and the Company has no continuing obligations, once its products are delivered to the shipper. To recognize revenue, it must also be probable that the Company will collect the accounts receivable from its customers. In some situations, the Company receives advance payments from its customers. Revenue associated with these advance payments is deferred until the product is shipped. ADS customers pay an annual maintenance fee for software support, which is recognized as deferred revenue on the balance sheet and on a monthly basis, it is recognized as revenue over the life of the contract.</font></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Note 5. Stock-Based Compensation</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In December 2004, the FASB issued Statement of Financial Accounting Standards No.&nbsp;123 (revised 2004), &#147;Share-Based Payment,&#148; (&#147;SFAS 123R&#148;). SFAS&nbsp;No.&nbsp;123R replaces SFAS&nbsp;No.&nbsp;123 &#147;Accounting for Stock-Based Compensation&#148; and supersedes Accounting Principles Board Opinion No.&nbsp;25 (&#147;APB&nbsp;25&#148;), &#147;Accounting for Stock Issued to Employees&#148;. SFAS&nbsp;No.&nbsp;123R requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values, eliminating pro forma disclosure as an alternative. The cost is measured based on the grant-date fair value of the equity or liability instruments issued. SFAS&nbsp;No.&nbsp;123R is effective for small business filers as of the first interim or annual period that begins after December 31, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123 (revised 2004), Share-Based Payment, (&#147;SFAS 123R&#148;) using the modified prospective transition method. Under this transition method, compensation expense recognized during the three months ended March 31, 2006 equals approximately $8,000 and reflects (a) compensation expense for all share-based awards granted prior to, but not yet vested, as of December&nbsp;31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b)&nbsp;compensation expense for all share-based awards granted subsequent to December&nbsp;31, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R. No share-based awards were granted by the Company during the first three months of 2006. In accordance with the modified prospective transition method, the
Company&#146;s Consolidated Financial Statements for prior periods have not been restated to reflect the impact of SFAS 123R. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black Scholes model with the assumptions included in the table below. The Company uses historical data among other factors to estimate the expected price volatility, the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. At March 31, 2006, we had one stock-based employee compensation plan. During the three months ended March 31, 2005, we cancelled 150,000 common share options under this plan and did not issue any common share options. The cancelled options were voluntarily forfeited by Mr.&nbsp;Slye in February 2006, for no consideration from the Company. During the three months ended March 31, 2005, we did not issue or cancel any
common share options. The following table depicts the average of the assumptions that were used to estimate the fair value of options that remain outstanding at March&nbsp;31, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="50%" STYLE="border-collapse:collapse" ALIGN="CENTER">
    <tr >
        <TD WIDTH="228" VALIGN="TOP" STYLE="background:#D6F3E8">
<font size=2>Dividend yield</font> </td>
        <TD WIDTH="120" VALIGN="BOTTOM" STYLE="background:#D6F3E8;">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.00%</font></p> </td>
        <TD WIDTH="12" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="228" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected volatility</font></p> </td>
        <td width="120" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52.19%</font></p> </td>
        <td width="12" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="228" valign=top style='background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate</font></p> </td>
        <td width="120" valign=bottom style='background:#D6F3E8; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.00%</font></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="228" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected lives</font></p> </td>
        <td width="120" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10 years</font></p> </td>
        <td width="12" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Prior to January 1, 2006, the Company accounted for the grants of options and restricted shares using the intrinsic value method of Accounting Principles Board Opinion No. 25, &#147;Accounting for Stock Issued to Employees&#148; and related interpretations. Had compensation cost for share-based awards been determined consistent with SFAS No.&nbsp;123R, the net income and earnings per share would have been adjusted to the following pro forma amounts for the three-month period ended March 31, 2005:   </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" STYLE="border-collapse:collapse;" ALIGN="CENTER">
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="85%" VALIGN="bottom">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Three Months</font></b><br> <b><font size=1>Ended</font></b><br> <b><font size=1>March 31,</font></b></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="bottom">
            <p style='margin-top:1.0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom >
            <p align=center style='margin-top:1.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; '>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center'><b><font size=1>2005</font></b></p> </td>
        <td width="12" valign=bottom >
            <p align=center style='margin-top:1.0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:10.0pt; text-indent:-10.0pt'><font size=2>Net income (loss):</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' background:#D6F3E8'>
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><font size=1>&nbsp;</font></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>As reported</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td>
        <td  colspan="2" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>51,000</font></b></p> </td>
        <td width="12" valign=bottom style='padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>Pro forma</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td>
        <td  colspan="2" valign=bottom style=' background:#D6F3E8'>
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>37,000</font></b></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:10.0pt; text-indent:-10.0pt'><font size=2>Basic net income (loss) per common share:</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><font size=1>&nbsp;</font></p> </td>
        <td width="12" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>As reported</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' background:#D6F3E8'>
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$             </font></b></p> </td>
        <td width="67" valign=bottom style='background:#D6F3E8; '>
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>0.02</font></b></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>Pro forma</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$             </font></b></p> </td>
        <td width="67" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>0.01</font></b></p> </td>
        <td width="12" valign=bottom style='padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:10.0pt; text-indent:-10.0pt'><font size=2>Diluted net income (loss) per common share:</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' background:#D6F3E8'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>As reported</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$             </font></b></p> </td>
        <td width="67" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>0.02</font></b></p> </td>
        <td width="12" valign=bottom style='padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>Pro forma</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' background:#D6F3E8'>
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$             </font></b></p> </td>
        <td width="67" valign=bottom style='background:#D6F3E8; '>
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>0.01</font></b></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:10.0pt; text-indent:-10.0pt'><font size=2>Stock based compensation:</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><font size=1>&nbsp;</font></p> </td>
        <td width="12" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top" STYLE="background:#D6F3E8;">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>As reported</font></p> </td>
        <td width="19" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' background:#D6F3E8'>
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>0</font></b></p> </td>
        <td width="12" valign=bottom style='background:#D6F3E8; '>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <TD WIDTH="85%" VALIGN="top">
            <p style='margin-top:0in;margin-right:0in;margin-bottom:0.5pt;margin-left:20.0pt; text-indent:-10.0pt'><font size=2>Pro forma</font></p> </td>
        <td width="19" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td>
        <td  colspan="2" valign=bottom >
            <p align=right style='margin:0in;margin-bottom:.0001pt;text-align:right'><b><font size=2>14,000</font></b></p> </td>
        <td width="12" valign=bottom >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
     </table>
<BR>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Note 6. Net Income Per Share</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company&#146;s basic net income per share amounts have been computed by dividing net income by the weighted average number of outstanding common shares. The Company&#146;s diluted net income per share is computed by dividing net income by the weighted average number of outstanding common shares and common share equivalents relating to stock options and warrants, when dilutive. For the three months ended March 31, 2006, 56,804 shares of common stock equivalents were included in the computation of diluted net income per share. For the three months ended March 31, 2005, 100,066 shares of common stock equivalents were included in the computation of diluted net income per share. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Options to purchase 9,000 shares of common stock with a weighted average exercise price of $4.49 were outstanding for the three months ending March 31, 2006, but were excluded from the computation of common share equivalents because their exercise prices were greater than the average market price of the common shares for the period.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>Note 7. Investments</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>INV&#146;s investments consist of equity securities, primarily common stocks, government debt securities and money market funds. The estimated fair value of publicly traded equity securities (other than those accounted for based upon the equity method of accounting) is based on quoted market prices, and therefore subject to the inherent risk of market fluctuations. Shares of common stock for which there is no readily determinable value (i.e., no quoted market price) are accounted for on a historical cost method (unless accounted for based upon the equity method of accounting). Management determines the appropriate classification of securities at the date individual investments are acquired, and evaluates the appropriateness of such classification at each balance sheet date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Since the Company generally does not buy investments in anticipation of short-term fluctuations in market prices, investments in equity securities are classified as available-for-sale (unless accounted for on the equity method of accounting). Available-for-sale securities with readily determinable values are stated at fair value, and unrealized holding gains and losses, net of the related deferred tax effect, are reported as separate component of stockholders&#146; equity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Realized gains and losses on securities, including losses from declines in value of specific securities determined by management to be other-than-temporary (unless accounted for on the equity method of accounting), are included in income in the period realized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Prior to February 15, 2006, the Company&#146;s significant investment in equity securities consisted of 569,615 shares of common stock of August Technology Corporation (&#147;August&#148;), which had an approximate cost of $57,000. Rudolph Technologies, Inc. (&#147;Rudolph&#148;) acquired August on February 15, 2006. As a result of Rudolph&#146;s acquisition of August, the Company received 347,224 shares of Rudolph common stock and $1,015,891 in cash. As a result, at March 31, 2006, the Company&#146;s significant investment in equity securities is 347,224 shares of Rudolph. As of March 31, 2006, the aggregate value of the Company&#146;s Rudolph shares as reported on the Nasdaq Stock Exchange was approximately $5,920,000 with an approximate cost of $46,000. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Investment Reported on Equity Method:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>At March 31, 2006, the Company owned 551,759 shares of PPT, which is approximately 14.5% of PPT&#146;s outstanding common stock. The fair value of its holdings based on the quoted market price at March 31, 2006 was approximately $500,000 with an approximate cost of $2,434,000.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Since the Company owns approximately 14.5% of PPT&#146;s outstanding stock, and the Company&#146;s Secretary, Peter R Peterson, owns approximately 38.6% of PPT&#146;s outstanding stock, it has been determined that the Company has &#147;significant influence&#148; over the operations of PPT, and as a result its ownership interest should be reported using the equity method of accounting for investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Under the equity method of accounting, the Company&#146;s proportionate share of PPT net income or loss is included in the Company&#146;s net income (loss) with a corresponding increase or decrease in the carrying value of its investment. Losses in excess of invested amounts are not recognized in the financial statements, but rather are suspended and applied against future equity in earnings for the investee until exhausted. At March 31, 2006, the Company had approximately $1,172,000 in suspended losses from its investment in PPT that will be used to offset future recognition of equity method earnings from the investment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT SIZE="2"><B>Note 8. Segment Information</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company has three reportable operating segments based on the nature of its product lines: Production Monitoring, Character Recognition, and Investments. The Controls Division manufactures and markets a complete line of production monitoring equipment, in particular speed monitoring and motor control systems for industrial machinery. ADS designs and markets a desktop software-based character recognition system that reads hand printed characters, checkmarks, and bar code information from scanned or faxed forms. Sales of this system include software and can include hardware. INV holds investments in marketable and non-marketable securities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accounting policies of the segments are the same as those described in Note 1. In evaluating segment performance, management focuses on sales and income before taxes. The Company has no inter-segment sales.</font></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The following is financial information relating to the continuing operating segments: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" STYLE="border-collapse:collapse" ALIGN="CENTER">
    <tr style='page-break-inside:avoid'>
        <TD WIDTH="78%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td>
        <td  colspan="5" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>Three Months Ended</B><br> <B>March</B>&nbsp;<B>31,</B> </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="bottom">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2006</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="1"><B>2005</B> </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="1">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Net sales</B> </FONT> </p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Production monitoring </FONT></p> </td>
        <TD WIDTH="16" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="9" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT></p> </td>
        <TD WIDTH="60" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,174,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="9" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <TD WIDTH="60" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">1,075,000 </FONT></p> </td>
        <TD WIDTH="16" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Character recognition </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>184,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">129,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:20.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Investments </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>0</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">0 </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total</B> </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8;padding: 0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='border-bottom:solid black 3pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT></p> </td>
        <td width="60" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,358,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='border-bottom:solid black 3pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <td width="60" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">1,204,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Income before income taxes</B> </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-3.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Production monitoring </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT></p> </td>
        <td width="60" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>114,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <td width="60" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">84,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8; padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-3.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Character recognition </FONT></p> </td>
        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>14,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(37,000 </FONT></p> </td>
        <td width="16" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">) </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top" STYLE="background:#D6F3E8">
<p style='margin-left:10.0pt;text-indent:-3.25pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><FONT SIZE="2">Investments </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,244,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="background:#D6F3E8;padding: 0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; background:#D6F3E8'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">31,000 </FONT></p> </td>
        <td width="16" valign=bottom style='background:#D6F3E8; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <TD WIDTH="78%" VALIGN="top">
<p style='margin-left:10.0pt;text-indent:-10.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><FONT SIZE="2"><B>Total</B> </FONT></p> </td>
        <td width="16" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='border-bottom:solid black 3pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>$</B> </FONT></p> </td>
        <td width="60" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>1,372,000</B> </FONT></p> </td>
        <TD WIDTH="5%" VALIGN="BOTTOM" STYLE="padding:0in 0in .7pt 0in">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="9" valign=bottom style='border-bottom:solid black 3pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">$ </FONT></p> </td>
        <td width="60" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 3pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">78,000 </FONT></p> </td>
        <td width="16" valign=bottom style='padding:0in 0in .7pt 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Certain expenses related to the conduct of our investment activities are included in general and administrative expenses in the accompanying consolidated statements of operations, but have been allocated to net income (loss) from our Investments segment in the above table. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>Recent accounting standards:</B> </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Company&#146;s financial statements. </FONT></p>



<BR><BR><BR><BR><BR>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><A NAME="item_2_managements">Item 2. Management&#146;s</A> Discussion and Analysis or Plan of Operation</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>FORWARD-LOOKING STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">
This Form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding the Company&#146;s
expectations, beliefs, intentions or strategies regarding the future.
Forward-looking statements include, but are not limited to, statements regarding
the extent and timing of future revenues and expenses and customer demand, the
market value of our investment securities, future financial condition and
availability of capital resources, changes in worldwide general economic
conditions, cyclical capital spending by customers, the Company&#146;s ability
to keep pace with technological developments and evolving industry standards,
worldwide competition, and the Company&#146;s ability to protect its existing
intellectual property from challenges from third parties and other factors. Any
statement that is not based solely upon historical facts, including strategies
for the future and the outcome of events that have not yet occurred, is
considered a forward-looking statement. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">
All forward-looking statements in this document are based on information
available to the Company as of the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. It is important to
note that the Company&#146;s actual results could differ materially from those
in such forward-looking statements. The forward-looking statements of the
Company are subject to risks and uncertainties. Some of the factors that could
cause future results to differ materially from the Company&#146;s recent results
or those projected in the forward-looking statements are detailed in the
Company&#146;s Annual Report on Form 10-KSB for the year ended December&nbsp;31,
2005, filed with the Securities and Exchange Commission. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>CRITICAL ACCOUNTING POLICIES</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Management uses estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. We do not believe that any of the significant accounting policies described in the notes to the financial statements are critical at this time. A more in-depth description of our accounting policies can be found in the interim financial statements included in this report and in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>RESULTS OF OPERATIONS</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><U><B><I>Net Sales</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Total net sales for the three month period ended March 31, 2006 increased $154,000 or 12.8% when compared to net sales for the same period in 2005. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">For the three months ended March 31, 2006 compared to the same period in 2005, the Controls Division contributed an increase in net sales $99,000 or 9.2%. ADS also experienced an increase in net sales of $55,000 or 42.6% for the three months ended March 31, 2006 compared to the same period in 2005. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">The Controls Division has experienced an increase in net sales for the first quarter of 2006 due in part to the ongoing growth of the US economy, purchases for new plant locations, and increased capital spending by our installed customer base. The bulk of our sales volume continues to be derived from the Speed Monitoring product lines to the grain, feed, biofuel, power generation, and mining industries, as well as other key industrial markets. We are continuing to develop additional channel partners in the form of distributors and independent representatives both domestically and internationally. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">The ADS Division increase in net sales for the first quarter of 2006 is from multiple unit orders of Expertscan product and scanner bundled sales. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT COLOR="#FF0000" SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><U><B><I>Cost of Goods Sold</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT COLOR="#FF0000" SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">The Company&#146;s cost of goods sold increased $71,000 or 16.0% for the three months ended March 31, 2006 compared to the same period in 2005. This increase is primarily a direct result of increased sales. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><U><B><I>Gross Profit</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Gross margins for the three month period ended March 31, 2006 were 62.0% versus 63.0% for the same period in 2005. This slight decrease in margins is mainly due to fuel surcharges added to supply shipments received by the Company. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT SIZE="2"><U><B><I>Operating Expenses</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<FONT SIZE="2">Total operating expenses decreased $72,000 or 8.6% for the three months ended
March 31, 2006 when compared to the same period of the prior year. Of this
decrease, the Controls Division contributed an increase of $18,000 or 2.8%,
offset by a decrease in ADS of $90,000 or 45.0%. </FONT> </p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Selling and marketing costs were consistent for the three months ended March 31, 2006 when compared to the same period in 2005. The Controls Division contributed an increase of $26,000 or 10.5%, which was offset by a decrease from ADS of $26,000 or 41.9%. Sales representative commissions and marketing communications development for product launches, new literature, trade shows and related sales efforts are the predominant expenses that caused the increase for the Controls Division. The decrease in ADS is primarily due to fewer personnel. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">General and administrative costs decreased $6,000 or 1.8% for the three months ended March 31, 2006 compared to the same period in 2005. Of this decrease, the Controls Division contributed an increase of $6,000 or 2.1%, offset by a decrease in ADS of $12,000 or 32.4%. The overall increase in general and administrative costs from the Controls Division was due to a reduction in the amount of expense charged to the ADS division for shared expenses including building expense, utilities, costs of being public, etc. based on sales volume and building space utilized. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Research and development costs decreased $66,000 or 32.4% for the three months ended March 31, 2006 compared to the same period in 2005. Of the decrease, the Controls Division contributed $12,000 or 11.8%, and ADS contributed a decrease of $54,000 or 52.9%. The decrease in the Controls Division was due to decreased costs of product development and product testing. The decrease in ADS was due to decreased costs associated with software development. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><U><B><I>Non-Operating Income (Loss)</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Non-operating income increased by $1,139,000 for the three-month period ended March 31, 2006 compared to the same period for 2005. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Gain on the sale of investment securities increased $1,095,000 for the three month period ended March 31, 2006, compared to the same period in 2005. This increase is a direct result of the August Technology stock sold and the August Technology/Rudolph merger (see Note 6 of our Financial Statements for more detail). In addition to the merger, for the three month period ended March 31, 2006, 17,000 shares of August Technology stock were sold with an average sale price of $11.86 per share, compared to the same period in 2005 in which 11,950 shares of August Technology stock were sold with an average sale price of $11.46 per share. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Interest income increased $41,000 or 128.1% when comparing the three months ended March 31, 2006 to the same period in 2005. This increase was due to the higher interest rates on U.S. Treasury Bills. In addition to the higher interest rates, the Company had additional funds of $1,800 000 invested in Treasury Bills when comparing the three months ended March 31, 2006 to the same period 2005. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Equity in losses of equity method investee decreased $11,000 or 100% for the three months ended March 31, 2006 when compared to the same period in 2005. The $11,000 from the three months ended March 31, 2005 is from the a la mode investment which was recorded by the equity method of accounting until this investment was written off during the 3<SUP>rd </SUP>Quarter of 2005. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><U><B><I>Income (Loss) Before Income Taxes</I></B></U> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Income before income taxes increased $1,294,000 to an income before tax of $1,372,000 for the three-month period ended March 31, 2006 compared to the same period in 2005. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">The Controls Division had income before income taxes of $114,000 for the three months ended March 31, 2006 compared to $84,000 for the same period in 2005, an increase of $30,000. In addition to the increased sales for the Controls Division, our overall efforts to reduce operating expenses contributed to the increase in net income before income taxes. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">ADS had income before income taxes of $14,000 for the three months ended March 31, 2006 compared to the net loss before income taxes of $37,000 for same period in 2005. This increase in net income before income tax is due to increased sales in this division and lowered expenses due to less personnel and lowered General and Administrative expenses (see note in General and Administrative expenses above). </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Investment income from investment securities (not from operations) increased $1,213,000 to an income before income taxes of $1,244,000 for the three months ended March 31, 2006 compared to the same period in 2005. This increase is primarily due to the August Technology/Rudolph merger discussed previously. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B>LIQUIDITY AND CAPITAL RESOURCES</B> </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">

Cash and cash equivalents were $8,312,000 at March 31, 2006 and $7,060,000 at
March 31, 2005. Cash provided by operating activities of $147,000&nbsp;for the
three months ended March 31, 2006 is primarily a result of our net operating
income adjusted for non-cash charges. </FONT></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Cash provided by investing activities was $1,235,000 for the three month period ended March 31, 2006 and $114,000 for the same period in 2005. Proceeds from the sale of investments for the three months ended March 31, 2006 increased to $1,235,000 from $136,000 when compared to the same period in 2005. This is a direct result of the August Technology/Rudolph merger (see Note 6). </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Cash used in financing activities was $130,000&nbsp;and $118,000 for the three months ended March 31, 2006 and March 31, 2005, respectively. During the three months ended March 31, 2006 and 2005, the Company paid aggregate dividends of $130,000 and $128,000, respectively. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">On April 20, 2006, the Company announced that it had declared a quarterly cash dividend of $0.04 per share to shareholders of record on May 5, 2006. The Company also declared a special cash dividend of $1.00 per share to shareholders of record on May 5, 2006. Both dividends are payable on May 19, 2006. These two dividends represent a total of $3,476,000. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">Our ongoing cash requirements will be primarily for capital expenditures, acquisitions, research and development and working capital. Management believes that cash on hand and any cash provided by operations will be sufficient to meet our cash requirements through at least the next 12 months. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">INV&#146;s primary investments are 347,224 shares of Rudolph Technology Corporation and 551,759 shares of PPT Vision, Inc. Rudolph Technology Corporation is listed on the Nasdaq stock market and PPT Vision, Inc. is traded on the OTC exchange. The investment in PPTV is accounted for under the equity method of accounting. These stocks are subject to fluctuations in price and could have a negative effect on the liquidity of the Company. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B><I>Off-balance Sheet Arrangements</I></B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">As of March 31, 2006, the Company had no off-balance sheet arrangements or transactions with unconsolidated, limited purpose entities. </FONT> </p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><A NAME="item_3_controls">Item 3. Controls</A> and Procedures.</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of the Company&#146;s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;)). Based on this evaluation, the principal executive officer and principal financial officer concluded that the Company&#146;s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>There was no change in the Company&#146;s internal control over financial reporting during the Company&#146;s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company&#146;s internal control over financial reporting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b>PART II &#150; OTHER INFORMATION</b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_1_legal">Item 1. Legal</A> Proceedings &#150; None</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_2_unregistered">Item 2. Unregistered</A> Sales of Equity Securities and Use of Proceeds &#150; None</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_3_defaults">Item 3. Defaults</A> Upon Senior Securities &#150; None</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_4_submission">Item 4. Submission</A> of Matters to a Vote of Security Holders &#150; None</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=3><A NAME="item_5_other">Item 5. Other</A> Information &#150; None</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><A NAME="item_6_exhibits">Item 6. Exhibits</A></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="48" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">(a) </FONT></p> </td>
        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Exhibits - See Exhibit Index following signature page. </FONT></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<B><A NAME="signatures">SIGNATURES</A></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2">&nbsp; </FONT></p>


<table border="0" cellspacing=0 cellpadding=0 width="720" style='border-collapse:collapse'>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Electro-Sensors, Inc.</B> </FONT></p> </td>
        <td width="353" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Electro-Sensors, Inc.</B> </FONT></p> </td> </tr>
    <tr >
        <td width="367" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="353" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
        <td width="367" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">May 15, 2006 </FONT></p> </td>
        <td width="353" valign=top style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">/s/ Bradley D. Slye </FONT></p> </td> </tr>
    <tr >
        <td width="367" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="353" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Bradley D. Slye </FONT></p> </td> </tr>
    <tr >
        <td width="367" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="353" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Chief Executive Officer and Chief Financial Officer </FONT></p> </td> </tr></table>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><A NAME="exhibit_index">EXHIBIT INDEX</A></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>ELECTRO-SENSORS, INC.</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2">&nbsp; </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2"><B>FORM 10-QSB FOR QUARTER ENDED March 31, 2006</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="2">&nbsp; </FONT></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Exhibit</B> </FONT></p> </td>
        <TD WIDTH="19" VALIGN="BOTTOM">
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2"><B>Description</B> </FONT></p> </td> </tr>
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        <td width="78" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="19" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="623" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
    <tr >
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">31.1 </FONT></p> </td>
        <td width="19" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="623" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Certification of CEO and CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 </FONT></p> </td> </tr>
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        <td width="78" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="19" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="623" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
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        <td width="78" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">32.1 </FONT></p> </td>
        <td width="19" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="623" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 </FONT></p> </td> </tr></table>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><B><font SIZE=3>EXHIBIT 31.1</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>CERTIFICATION PURSUANT TO</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B>SECTION 302 OF THE SARBANES OXLEY-ACT OF 2002</B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Bradley D. Slye, Chief Executive Officer and Chief Financial Officer of Electro-Sensors, Inc., certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>I have reviewed this report on Form 10-QSB of Electro-Sensors Inc.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The small business issuer&#146;s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:</font></p> </td> </tr></table>


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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the small business issuer&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the small business issuer&#146;s internal control over financial reporting that occurred during the small business issuer&#146;s most recent fiscal quarter (the small business issuer&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer&#146;s internal control over financial reporting; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The small business issuer&#146;s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer&#146;s auditors and the audit committee of the small business issuer&#146;s board of directors (or persons performing the equivalent functions):</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer&#146;s ability to record, process, summarize and report financial information; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.75in;text-align:left;'><font size=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer&#146;s internal control over financial reporting.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">May 15, 2006 </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">/s/ Bradley D. Slye </FONT></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Bradley D. Slye </FONT></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Principal Executive Officer and Chief Financial Officer </FONT></p> </td> </tr></table>



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<TYPE>EX-32.1
<SEQUENCE>3
<FILENAME>electro062052_ex32-1.htm
<DESCRIPTION>CERTIFICATION OF CEO/CFO PURSUANT TO SECTION 906
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<TITLE>Electro-sensors Exhibit 32.1 to Form 10-QSB dated March 31, 2006 </TITLE>
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<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><B><font SIZE=3>EXHIBIT 32.1</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><FONT SIZE="3"><B>CERTIFICATION PURSUANT TO<BR>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B> </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>In connection with the Quarterly Report of Electro-Sensors, Inc. (the &#147;Company&#148;) on Form 10-QSB for the quarter ended March 31, 2006 as filed with the Securities and Exchange Commission (the &#147;Report&#148;), I, Bradley D. Slye, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. &sect;1350, as adopted pursuant to &sect;906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(1)&nbsp;&nbsp;The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(2)&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><FONT SIZE="2">May 15, 2006 </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">/s/ Bradley D. Slye </FONT></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
        <td width="361" valign=top style='padding:0in .7pt 0in .7pt'>
<p style='margin-left:.5in;text-indent:-.5in;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Bradley D. Slye </FONT></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">&nbsp; </FONT></p> </td>
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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><FONT SIZE="2">Principal Executive Officer and Chief Financial Officer </FONT></p> </td> </tr></table>




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