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<title>Prepared by E-Services, LLC. - www.edgar2.net</title>



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<p class=MsoNormal align=center style='text-align:center'>SECURITIES AND
EXCHANGE COMMISSION</p>



<p class=MsoNormal align=center style='text-align:center'>Washington, D. C.
20549</p>



<p class=MsoNormal align=center style='text-align:center'>FORM 8-K</p>



<p class=MsoNormal align=center style='text-align:center'>CURRENT REPORT</p>



<p class=MsoNormal align=center style='text-align:center'>Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934</p>



<p class=MsoNormal align=center style='text-align:center'>Date of Report (Date
of earliest event reported): August 14, 2003</p>





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      <td width="758" colspan="4" style="border-bottom-style: solid; border-bottom-width: 1">





<p class=MsoNormal align="center">EVERCEL,
INC.</p>

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      <td width="758" colspan="4" style="border-top-style: solid; border-top-width: 1">

<p class=MsoNormal align=center>(Exact name of
registrant as specified in its charter)</p>





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      <td width="250" colspan="2">&nbsp;</td>
      <td width="508" colspan="2">

<p class=MsoNormal align=center style='text-align:left'>&nbsp;</p>





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      <td width="758" colspan="4" style="border-bottom-style: solid; border-bottom-width: 1">





<p class=MsoNormal align="center">Delaware</p>

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      <td width="758" colspan="4" style="border-top-style: solid; border-top-width: 1">

<p class=MsoNormal align=center>(State or other
jurisdiction of incorporation)</p>



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      <td width="250" colspan="2">
      <p align="center">&nbsp;</td>
      <td width="508" colspan="2">

<p class=MsoNormal align=center style='text-align:left'>&nbsp;</p>



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      <td width="569" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center">001-14919</td>
      <td width="101" colspan="2">



<p class=MsoNormal align="center">&nbsp;&nbsp; </p>

      </td>
      <td width="358" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center">&nbsp;&nbsp;&nbsp; 06-1528142</td>
    </tr>
    <tr>
      <td width="569" style="border-top-style: solid; border-top-width: 1">
      <p align="center">(Commission File Number)</td>
      <td width="101" colspan="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </td>
      <td width="358" style="border-top-style: solid; border-top-width: 1">

<p class=MsoNormal align="center">(IRS
Employer Identification No.)</p>



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      <td width="250" colspan="2">&nbsp;</td>
      <td width="508" colspan="2">

<p class=MsoNormal>&nbsp;</p>



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      <td width="347" style="border-bottom-style: solid; border-bottom-width: 1">
      <p align="center">5 Pond Park Road,  Hingham,  Massachusetts</td>
      <td width="159" colspan="2">&nbsp;&nbsp; </td>
      <td width="252" style="border-bottom-style: solid; border-bottom-width: 1">



<p class=MsoNormal align="center">02043</p>

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      <td width="347" style="border-top-style: solid; border-top-width: 1">
      <p align="center">(Address of Principal Executive Offices)</td>
      <td width="159" colspan="2">&nbsp;&nbsp; </td>
      <td width="252" style="border-top-style: solid; border-top-width: 1">

<p class=MsoNormal align="center">(Zip
Code)</p>



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      <td width="250" colspan="2">&nbsp;</td>
      <td width="508" colspan="2">

<p class=MsoNormal>&nbsp;</p>



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      <td width="758" colspan="4" style="border-bottom-style: solid; border-bottom-width: 1">



<p class=MsoNormal align="center">(781)
741-8800</p>

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      <td width="758" colspan="4" style="border-top-style: solid; border-top-width: 1">

<p class=MsoNormal align=center>(Registrant's
telephone number, including area code)</p>





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    </tr>
  </table>
</div>





<p class=MsoNormal>ITEM 9.&nbsp;&nbsp; </p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Evercel, Inc. has made public its results for
the three months ended June 30, 2003, on the attached press release.</p>



<p class=MsoNormal align=center style='text-align:center'>SIGNATURES</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.</p>



<p class=MsoNormal>Date:&nbsp;&nbsp;&nbsp; August 14, 2003</p>

<p class=MsoNormal style='margin-left:252.45pt'>EVERCEL, INC.</p>





<p class=MsoNormal style='margin-left:252.45pt'>By: <u>/s/ Garry Prime&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Garry Prime<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President</p>

<i><hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</i></p>





<p class=MsoNormal style='margin-left:252.45pt' align="right">
<img src="evercel-logo.jpg" width="328" height="94"></p>

<p align="center" style="text-align:center">Evercel, Inc. &nbsp;</p>
<p align="center" style="text-align:center">5 Pond Park Road &nbsp;</p>
<p align="center" style="text-align:center">Hingham, MA 02043 &nbsp;<br>
Tel: (781)741-8800 Fax: (781)740-8919 </p>
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="732" style="width:549.0pt">
  <tr>
    <td width="252" valign="bottom" style="width: 189.0pt; padding: 0in; background: white">
    <p style="margin-left:14.15pt;text-indent:-14.15pt"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Investor Contact:&nbsp; </b></td>
    <td width="249" valign="bottom" style="width: 186.75pt; padding: 0in; background: white">
    <p class="MsoNormal"><b>Media Contact: </b></td>
  </tr>
  <tr>
    <td width="252" valign="bottom" style="width: 189.0pt; padding: 0in; background: white">
    <p style="margin-left:42.5pt;text-indent:-14.15pt">Anthony Kiernan&nbsp;
    </td>
    <td width="249" valign="bottom" style="width: 186.75pt; padding: 0in; background: white">
    <p class="MsoNormal">Bill Baker&nbsp; </td>
  </tr>
  <tr>
    <td width="252" valign="bottom" style="width: 189.0pt; padding: 0in; background: white">
    <p style="margin-left:42.5pt;text-indent:-14.15pt">Evercel&nbsp;&nbsp; </td>
    <td width="249" valign="bottom" style="width: 186.75pt; padding: 0in; background: white">
    <p class="MsoNormal">Baker Communications Group, LLC</td>
  </tr>
  <tr>
    <td width="252" valign="bottom" style="width: 189.0pt; padding: 0in; background: white">
    <p style="margin-left:42.5pt;text-indent:-14.15pt">781-741-8800 </td>
    <td width="249" valign="bottom" style="width: 186.75pt; padding: 0in; background: white">
    <p class="MsoNormal">860-350-9100 </td>
  </tr>
</table>
<p align="center" style="text-align:center"><b><u>Evercel, Inc., Reports 2003
Second Quarter Results</u></b></p>
<p class="MsoNormal"><b>Hingham, Mass., August 14, 2003 -- Evercel, Inc.
(NASDAQ: EVRC)</b>, a developer and manufacturer of advanced rechargeable
batteries, reported second quarter revenue of $59,000, up from $19,000 in the
second quarter of 2003. Net loss available to common shareholders was $869,000
($0.08 per basic and diluted loss per share) compared to a loss of $691,000
($0.06 per basic and diluted loss per share) in last year's second quarter.</p>
<p class="MsoNormal">For the six months ended June 30, 2003, the company
reported revenues of $148,000, down from&nbsp; $171,000 for the six months ended
June 30, 2002. Net loss available to common shareholders was $1.7 million ($0.16
per basic and diluted loss per share) compared with a net loss of $1.3 million
for the same period in 2002 ($0.12 per basic and diluted loss per share). </p>
<p class="MsoNormal">The revenues in the 2003 and 2002 periods were from the
sale of scooter and marine batteries. </p>
<p class="MsoNormal">&quot;Interest in the unique performance characteristics of our
batteries remains high among OEM manufacturers of battery-powered products and
we plan to translate that interest into sales in the second half of this year
and into next year, &quot; said Garry Prime, president and CEO. &quot;In addition to
educating the market about our products, we are simultaneously pursuing business
opportunities that will help ensure the long-term financial stability and health
of the company and which will enable us to fully realize the commercial
potential of our battery products.&quot;</p>
<p>A conference call to discuss the second quarter results of the company has
been scheduled for Thursday August 14, 2003, at 10:00 A.M. EDT. Interested
parties can listen in via a live webcast at www.evercel.com&nbsp; A replay
version of the conference call will be available for two weeks after the call at
(719) 457-0820.</p>
<p><b>About Evercel</b><br>
Evercel, Inc. (www.evercel.com) is a manufacturer of proprietary
high-performance, environmentally friendly and cost-effective nickel-zinc
rechargeable batteries for a range of applications, including light electric
vehicles such as scooters, bicycles, wheelchairs and other neighborhood electric
vehicles, as well as other applications including trolling motors for boats,
lawn mowers, and other specialized commercial products. The Company is based in
Hingham, MA and operates a manufacturing facility though a Wholly Owned Foreign
Enterprise in Xiamen, China.</p>
<p align="center" style="text-align:center">- MORE - </p>
<p align="center" style="text-align:center">&nbsp;</p>
<i><hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</i></p>
<p><b>Evercel Second Quarter 2003 Results</b></p>
<p><b>Page 2</b></p>
<p><i>This press release contains forward-looking statements, including
statements regarding the Company's plans and expectations regarding the
development and commercialization of its battery technology. All forward-looking
statements are subject to risk and uncertainties that could cause actual results
to differ materially from those projected. Factors that could cause such a
difference include, without limitation, general risks associated with product
development, manufacturing, rapid technological change, and competition, as well
as other risks set forth in the Company's filings with the Securities and
Exchange Commission. The forward-looking statements contained herein speak only
as of the date of this press release. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
such statement to reflect any change in the Company's expectations or any change
in events, conditions or circumstances on which any such statement is based.</i></p>
<p align="center" style="text-align:center"><i>(Financial tables attached)</i></p>
<i><hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</i></p>
<p align="center" style="text-align:center"><i>&nbsp;</i></p>
<p><b>Evercel Second Quarter 2003 Results</b></p>
<p class="MsoNormal" align="center" style="text-align:center">EVERCEL, INC. AND
SUBSIDIARY<br>
STATEMENTS OF OPERATIONS<br>
(Dollars in thousands, except per share amounts)<br>
(Unaudited)</p>
<div align="left">
<table width="740" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0">
    <td width="443" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="margin-left:12.0pt;text-align:center;
  text-indent:-12.0pt"><b><font size="2">&nbsp;</font></b></td>
    <td width="219" colspan="3" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center"><b><font size="2">Three Months Ended</font></b></td>
  </tr>
  <tr style="page-break-inside:avoid">
    <td width="443" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="margin-left:12.0pt;text-align:center;
  text-indent:-12.0pt"><b><font size="2">&nbsp;</font></b></td>
    <td width="72" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="text-align:center"><b><font size="2">June 30,</font></b></td>
    <td width="65" valign="bottom" style="border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
    <td width="74" valign="bottom" style="border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="text-align:center"><b><font size="2">June 30,</font></b></td>
  </tr>
  <tr>
    <td width="443" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="margin-left:12.0pt;text-align:center;
  text-indent:-12.0pt"><b><font size="2">&nbsp;</font></b></td>
    <td width="72" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid black; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="text-align:center"><b><font size="2">2003</font></b></td>
    <td width="65" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
    <td width="74" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid black; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p align="center" style="text-align:center"><b><font size="2">2002</font></b></td>
  </tr>
  <tr>
    <td width="443" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
    <td width="72" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
    <td width="65" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
    <td width="74" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Revenues</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    59&nbsp;</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    19&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Cost and
    expenses: </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    Cost of revenues </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    193&nbsp;</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    102&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    Administrative and selling expenses </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    588&nbsp;</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    598&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    Research and development </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    45&nbsp;</font></u></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    37&nbsp;</font></u></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total operating costs and expenses </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    826&nbsp;</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    737&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Loss from
    operations </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (767)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (718)</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Interest
    income, net </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    5&nbsp;</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    67&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Other
    income (expense), net </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (2)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    3&nbsp;</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Minority
    interest</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    -&nbsp;</font></u></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    52&nbsp;</font></u></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Loss before
    income taxes</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (764)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (596)</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Income tax
    expense (benefit)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    -&nbsp;&nbsp;&nbsp;</font></u></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    -&nbsp;&nbsp;&nbsp;</font></u></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Net loss
    </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (764)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (596)</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Preferred
    stock dividends</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <font size="2">&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (105</u>)</font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <font size="2">&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (95</u>)</font></td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Net loss -
    common shareholders</font></td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="72">
    <div style="width: 59; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (869)</font></div>
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="74">
    <div style="width: 62; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (691)</font></div>
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;&nbsp;&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Basic and
    diluted loss per share </font></td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    <div style="width: 60; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.08)</font></div>
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    <div style="width: 60; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.06)</font></div>
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right" width="74">
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
    <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Basic and
    diluted shares outstanding </font></td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="72">
    <div style="width: 59; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">10,435&nbsp;</font></div>
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="74">
    <div style="width: 59; height: 15; border-bottom-style: double; border-bottom-width: 3">
      <font size="2">10,404&nbsp;</font></div>
    </td>
  </tr>
  <tr>
    <td valign="bottom" style="width:443;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;&nbsp;&nbsp;
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="72">
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="65">
    </td>
    <td valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="74">
    </td>
  </tr>
  </table>
</div>
<p align="center"><font size="2">See condensed notes to consolidated financial
statements.</font></p>
<p align="center">&nbsp;</p>
<hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</p>
<p class="MsoNormal" align="center" style="text-align:center">EVERCEL, INC. AND
SUBSIDIARY<br>
CONSOLIDATED BALANCE SHEETS<br>
(Dollars in thousands, except per share amounts)<br>
(Unaudited)</p>
<div align="left">
  <table width="705" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0">
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <p align="center" style="text-align:center"><b><font size="2">&nbsp;</font></b></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <p align="center" style="text-align:center"><b><font size="2">&nbsp;</font></b></td>
      <td valign="top" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <p align="center" style="text-align:center"><b><font size="2">&nbsp;</font></b></td>
      <td valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="127">
      <p align="center" style="text-align:center"><b><font size="2">June 30,</font></b></td>
      <td colspan="2" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="146">
      <p align="center" style="text-align:center"><b><font size="2">December 31,</font></b></td>
    </tr>
    <tr style="height:.2in">
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <p align="center" style="text-align:center"><b><u><font size="2">ASSETS
      </font></u></b></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <p align="center" style="text-align:center"><b><font size="2">&nbsp;</font></b></td>
      <td valign="top" style="width: 11; height: .2in; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">&nbsp;</font></b></td>
      <td valign="top" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="127">
      <p align="center"><b><font size="2">&nbsp;2003</font></b></td>
      <td colspan="2" valign="top" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="146">
      <p align="center"><b><font size="2">&nbsp;2002</font></b></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Current assets: </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="top" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="127">
      </td>
      <td colspan="2" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right" width="146">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents </font>
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      6,183&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp; 10,377&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      74&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      172&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Inventories </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      582&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      728&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Other current assets </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      517&nbsp;</font></u></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      520&nbsp;</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      current assets </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      7,356&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      11,797&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;&nbsp;&nbsp;&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment, net
      </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1,215&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1,312&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Other assets, net</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2,776&nbsp;</font></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2,977&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;Goodwill </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      342&nbsp;</font></u></td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      -&nbsp;</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;&nbsp;&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">TOTAL ASSETS </font></b></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">&nbsp;</font></b></td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <div style="width: 61; height: 15; border-bottom-style: double; border-bottom-width: 3">
        <b><font size="2">$&nbsp;&nbsp; 11,689&nbsp;</font></b></div>
      </td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <div style="width: 61; height: 15; border-bottom-style: double; border-bottom-width: 3">
        <b><font size="2">$&nbsp;&nbsp; 16,086&nbsp;</font></b></div>
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><u><font size="2">LIABILITIES AND SHAREHOLDERS' EQUITY </font></u></b>
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Current liabilities: </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      116&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      142&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      241&nbsp;</font></u></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      470&nbsp;</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      current liabilities </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      357&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      612&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Other non-current liabilities</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      21&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      44&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Note payable</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2,361&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Minority interest</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      -&nbsp;</font></u></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;</font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;5,005&nbsp;</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2,739&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      5,661&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">Shareholders' equity: </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock ($0.01 par value); 1,000,000 shares <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized: 214,839 and 210,029 issued and outstanding<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; at June 30, 2003 and December 31,
      2002, respectively<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (with cumulative dividends at 8%).</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      2&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Common Stock ($0.01 par value); 30,000,000 shares<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; authorized: 10,435,260 and 10,422,156
      issued and<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; outstanding at June 30, 2003 and
      December 31, 2002,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; respectively.</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      104&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      104&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in-capital </font>
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      58,225&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      58,225&nbsp;</font></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive
      income</font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      1&nbsp;</font></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (49,382)</font></u></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (47,906)</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
      shareholders' equity </font></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      </td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      8,950&nbsp;</font></u></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">&nbsp;&nbsp;&nbsp; </font><u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      10,425&nbsp;</font></u></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">&nbsp; </font></b></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">&nbsp;</font></b></td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <b><font size="2">&nbsp;</font></b></td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <b><font size="2">&nbsp;</font></b></td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">
      <b><font size="2">TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</font></b></td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <div style="width: 64; height: 15; border-bottom-style: double; border-bottom-width: 3">
        <b><font size="2">$&nbsp;&nbsp; 11,689&nbsp;</font></b></div>
      </td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <div style="width: 65; height: 15; border-bottom-style: double; border-bottom-width: 3">
        <b><font size="2">&nbsp;$&nbsp;&nbsp; 16,086&nbsp;</font></b></div>
      </td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
    </tr>
    <tr>
      <td width="388" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </td>
      <td width="13" valign="top" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td valign="bottom" style="width: 11; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white">&nbsp;</td>
      <td width="127" colspan="2" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
      <td width="146" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">&nbsp;</td>
    </tr>
  </table>
</div>
<p class="MsoNormal" align="center" style="text-align:center">See condensed
notes to consolidated financial statements</p>





<p class=MsoNormal style='margin-left:252.45pt'>&nbsp;</p>

<hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</p>
<p>&nbsp;</p>
<p align="center" style="text-align:center">EVERCEL, INC. AND SUBSIDIARY<br>
<a name="SOP">STATEMENTS OF OPERATIONS</a><br>
(Dollars in thousands, except per share amounts)<br>
(Unaudited)</p>
<div align="left">
  <table width="730" cellspacing="0" cellpadding="0" border="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr style="page-break-inside:avoid;height:11.05pt">
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:9.0pt;text-indent:-9.0pt"><b><font size="2">&nbsp;</font></b></td>
      <td width="268" colspan="3" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center"><b><font size="2">Six Months Ended</font></b></td>
    </tr>
    <tr style="page-break-inside:avoid">
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="margin-left:12.0pt;text-align:center;
  text-indent:-12.0pt"><b><font size="2">&nbsp;</font></b></td>
      <td width="103" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="text-align:center"><b><font size="2">June 30,</font></b></td>
      <td width="57" valign="bottom" style="border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      </td>
      <td width="100" valign="bottom" style="border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="text-align:center"><b><font size="2">June 30,</font></b></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="margin-left:12.0pt;text-align:center;
  text-indent:-12.0pt"><b><font size="2">&nbsp;</font></b></td>
      <td width="103" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid black; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="text-align:center"><b><font size="2">2003 </font>
      </b></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      </td>
      <td width="100" valign="bottom" style="border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid black; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p align="center" style="text-align:center"><b><font size="2">2002</font></b></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border:medium none;padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Revenues</font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      148&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">&nbsp;&nbsp; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      171&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Cost and
      expenses: </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Cost of revenues </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">397&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">250&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Administrative and selling expenses </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">1,186&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">1,224&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Research and development </font></td>
      <td width="103" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">57&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">118&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Total operating costs and expenses </font></td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">1,640&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">1,592&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Loss from
      operations </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,492)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,421)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Interest
      income, net </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">25&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">111&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Other
      income (expense), net </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(9)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">37&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Loss
      attributable to minority interest</font></td>
      <td width="103" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">-&nbsp;&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">135&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Loss
      before income taxes</font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,476)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,138)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Income
      tax expense (benefit)</font></td>
      <td width="103" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">-&nbsp;&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">-&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Net loss
      </font></td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,476)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(1,138)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Preferred
      stock dividends</font></td>
      <td width="103" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(210)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-bottom-style:solid; border-bottom-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">(190)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Net loss
      - common shareholders</font></td>
      <td width="103" valign="bottom" style="border-bottom-style: double; border-bottom-width: 3; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,686)</font></td>
      <td width="57" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="100" valign="bottom" style="border-bottom-style: double; border-bottom-width: 3; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,328)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:none; border-bottom-width:medium; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:none; border-bottom-width:medium; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Basic and
      diluted loss per share </font></td>
      <td width="103" valign="bottom" style="border-top-style:none; border-top-width:medium; border-bottom-style:double; border-bottom-width:3; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.16)</font></td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:none; border-top-width:medium; border-bottom-style:double; border-bottom-width:3; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.12)</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:none; border-bottom-width:medium; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style:solid; border-top-width:1; border-bottom-style:none; border-bottom-width:medium; padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in" align="right">
      </td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">
      <p style="margin-left:12.0pt;text-indent:-12.0pt"><font size="2">Basic and
      diluted shares outstanding </font></td>
      <td width="103" valign="bottom" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 3; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">10,435&nbsp;</font></td>
      <td width="57" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 3; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      <font size="2">10,397&nbsp;</font></td>
    </tr>
    <tr>
      <td width="449" valign="bottom" style="padding-left:1.5pt; padding-right:1.5pt; padding-top:0in; padding-bottom:0in">&nbsp;
      </td>
      <td width="103" valign="bottom" style="border-top-style: solid; border-top-width: 1; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="57" valign="bottom" style="padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
      <td width="100" valign="bottom" style="border-top-style: solid; border-top-width: 1; padding-left: 1.5pt; padding-right: 1.5pt; padding-top: 0in; padding-bottom: 0in; background: white" align="right">
      </td>
    </tr>
  </table>
</div>
<p align="center" style="text-indent: -12.0pt; margin-left: 12.0pt">See
condensed notes to consolidated financial statements.</p>
<p align="center" style="text-indent: -12.0pt; margin-left: 12.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<hr color="#000080">
<p><br clear="all" style="page-break-before:always">
</p>

</body>

</html>
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{"company-data": {"conformed-name": "EVERCEL INC", "cik": "0001071119", "assigned-sic": "3690", "irs-number": "061528142", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-14919", "film-number": "03846781"}, "business-address": {"street1": "5 POND PARK ROAD", "city": "HINGHAM", "state": "MA", "zip": "02043", "phone": "781741-8800"}, "mail-address": {"street1": "EVERCEL, INC.", "street2": "5 POND PARK ROAD", "city": "HINGHAM", "state": "MA", "zip": "02043"}}
Prepared by E-Services, LLC. - www.edgar2.net
SECURITIES AND
EXCHANGE COMMISSION
Washington, D. C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date
of earliest event reported): August 14, 2003
EVERCEL,
INC.
(Exact name of
registrant as specified in its charter)
Delaware
(State or other
jurisdiction of incorporation)
001-14919
06-1528142
(Commission File Number)
(IRS
Employer Identification No.)
5 Pond Park Road,  Hingham,  Massachusetts
02043
(Address of Principal Executive Offices)
(Zip
Code)
(781)
741-8800
(Registrant's
telephone number, including area code)
ITEM 9.
Evercel, Inc. has made public its results for
the three months ended June 30, 2003, on the attached press release.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date:    August 14, 2003
EVERCEL, INC.
By:
/s/ Garry Prime
Garry Prime
President
Evercel, Inc.
5 Pond Park Road
Hingham, MA 02043
Tel: (781)741-8800 Fax: (781)740-8919
Investor Contact:
Media Contact:
Anthony Kiernan
Bill Baker
Evercel
Baker Communications Group, LLC
781-741-8800
860-350-9100
Evercel, Inc., Reports 2003
Second Quarter Results
Hingham, Mass., August 14, 2003 -- Evercel, Inc.
(NASDAQ: EVRC)
, a developer and manufacturer of advanced rechargeable
batteries, reported second quarter revenue of $59,000, up from $19,000 in the
second quarter of 2003. Net loss available to common shareholders was $869,000
($0.08 per basic and diluted loss per share) compared to a loss of $691,000
($0.06 per basic and diluted loss per share) in last year's second quarter.
For the six months ended June 30, 2003, the company
reported revenues of $148,000, down from  $171,000 for the six months ended
June 30, 2002. Net loss available to common shareholders was $1.7 million ($0.16
per basic and diluted loss per share) compared with a net loss of $1.3 million
for the same period in 2002 ($0.12 per basic and diluted loss per share).
The revenues in the 2003 and 2002 periods were from the
sale of scooter and marine batteries.
"Interest in the unique performance characteristics of our
batteries remains high among OEM manufacturers of battery-powered products and
we plan to translate that interest into sales in the second half of this year
and into next year, " said Garry Prime, president and CEO. "In addition to
educating the market about our products, we are simultaneously pursuing business
opportunities that will help ensure the long-term financial stability and health
of the company and which will enable us to fully realize the commercial
potential of our battery products."
A conference call to discuss the second quarter results of the company has
been scheduled for Thursday August 14, 2003, at 10:00 A.M. EDT. Interested
parties can listen in via a live webcast at www.evercel.com  A replay
version of the conference call will be available for two weeks after the call at
(719) 457-0820.
About Evercel
Evercel, Inc. (www.evercel.com) is a manufacturer of proprietary
high-performance, environmentally friendly and cost-effective nickel-zinc
rechargeable batteries for a range of applications, including light electric
vehicles such as scooters, bicycles, wheelchairs and other neighborhood electric
vehicles, as well as other applications including trolling motors for boats,
lawn mowers, and other specialized commercial products. The Company is based in
Hingham, MA and operates a manufacturing facility though a Wholly Owned Foreign
Enterprise in Xiamen, China.
- MORE -
Evercel Second Quarter 2003 Results
Page 2
This press release contains forward-looking statements, including
statements regarding the Company's plans and expectations regarding the
development and commercialization of its battery technology. All forward-looking
statements are subject to risk and uncertainties that could cause actual results
to differ materially from those projected. Factors that could cause such a
difference include, without limitation, general risks associated with product
development, manufacturing, rapid technological change, and competition, as well
as other risks set forth in the Company's filings with the Securities and
Exchange Commission. The forward-looking statements contained herein speak only
as of the date of this press release. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
such statement to reflect any change in the Company's expectations or any change
in events, conditions or circumstances on which any such statement is based.
(Financial tables attached)
Evercel Second Quarter 2003 Results
EVERCEL, INC. AND
SUBSIDIARY
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
June 30,
June 30,
2003
2002
Revenues
$           
    59
$           
    19
Cost and
    expenses:
Cost of revenues
193
102
Administrative and selling expenses
588
598
Research and development
45
37
Total operating costs and expenses
826
737
Loss from
    operations
(767)
(718)
Interest
    income, net
5
67
Other
    income (expense), net
(2)
3
Minority
    interest
-
52
Loss before
    income taxes
(764)
(596)
Income tax
    expense (benefit)
-
-
Net loss
(764)
(596)
Preferred
    stock dividends
(105
)
(95
)
Net loss -
    common shareholders
$        (869)
$        (691)
Basic and
    diluted loss per share
$         (.08)
$         (.06)
Basic and
    diluted shares outstanding
10,435
10,404
See condensed notes to consolidated financial
statements.
EVERCEL, INC. AND
SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
June 30,
December 31,
ASSETS
2003
2002
Current assets:
Cash and cash equivalents
$      
      6,183
$     10,377
Accounts receivable
74
172
Inventories
582
728
Other current assets
517
520
Total
      current assets
7,356
11,797
Property, plant and equipment, net
1,215
1,312
Other assets, net
2,776
2,977
Goodwill
342
-
TOTAL ASSETS
$   11,689
$   16,086
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$         
      116
$         
      142
Accrued liabilities
241
470
Total
      current liabilities
357
612
Other non-current liabilities
21
44
Note payable
2,361
Minority interest
-
5,005
Total liabilities
2,739
5,661
Shareholders' equity:
Preferred Stock ($0.01 par value); 1,000,000 shares
authorized: 214,839 and 210,029 issued and outstanding
at June 30, 2003 and December 31,
      2002, respectively
(with cumulative dividends at 8%).
2
2
Common Stock ($0.01 par value); 30,000,000 shares
authorized: 10,435,260 and 10,422,156
      issued and
outstanding at June 30, 2003 and
      December 31, 2002,
respectively.
104
104
Additional paid-in-capital
58,225
58,225
Accumulated other comprehensive
      income
1
Accumulated deficit
(49,382)
(47,906)
Total
      shareholders' equity
8,950
10,425
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$   11,689
$   16,086
See condensed
notes to consolidated financial statements
EVERCEL, INC. AND SUBSIDIARY
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Six Months Ended
June 30,
June 30,
2003
2002
Revenues
$         
      148
$         
      171
Cost and
      expenses:
Cost of revenues
397
250
Administrative and selling expenses
1,186
1,224
Research and development
57
118
Total operating costs and expenses
1,640
1,592
Loss from
      operations
(1,492)
(1,421)
Interest
      income, net
25
111
Other
      income (expense), net
(9)
37
Loss
      attributable to minority interest
-
135
Loss
      before income taxes
(1,476)
(1,138)
Income
      tax expense (benefit)
-
-
Net loss
(1,476)
(1,138)
Preferred
      stock dividends
(210)
(190)
Net loss
      - common shareholders
$      (1,686)
$      (1,328)
Basic and
      diluted loss per share
$        (0.16)
$        (0.12)
Basic and
      diluted shares outstanding
10,435
10,397
See
condensed notes to consolidated financial statements.