FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC  20549

                QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934

                      For Quarter Ended August 31, 1996

                       Commission File Number 0-1500

                                  EVANS, INC.
            (Exact name of registrant as specified in its charter)

                  DELAWARE                        36-1050870
     (State or other jurisdiction of              (IRS Employer
     Incorporation or organization)               Identification Number)

  36 South State Street, Chicago, Illinois                 60603
  (Address of principal executive office)                (Zip Code)

Registrant's telephone number, including area code  312-855-2000

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES  X      NO 

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:  as of October 11,
1996 4,918,301 shares of common stock, $.20 par value, were outstanding.

<PAGE>

                         EVANS, INC. AND SUBSIDIARIES

                                    INDEX

                                                                  Page No.
Part I.    Financial Information                                  --------

           Condensed Consolidated Balance Sheets -
           August 31, 1996, August 26, 1995
           and March 2, 1996                                          2

           Condensed Consolidated Statements of Operations -
           Thirteen and Twenty-six weeks ended
           August 31, 1996 and August 26, 1995                        3

           Condensed Consolidated Statements of Cash Flows -
           Twenty-six weeks ended August 31, 1996
           and August 26, 1995                                        4

           Notes to Condensed Consolidated Financial Statements     5 - 6

           Management's Discussion and Analysis of Financial
           Condition and Results of Operations                      7 - 9


Part II.   Other Information                                         10

           Signatures                                                11

           Index to Exhibits                                         12



<PAGE>
<TABLE>
                        PART I.   FINANCIAL INFORMATION
                         Evans, Inc. and Subsidiaries
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

<CAPTION>
                                      August 31,     August 26,      March 2,
                                        1996           1995           1996
                                    ------------   ------------   ------------
<S>                                 <C>            <C>            <C>
ASSETS
------
Current assets:
 Cash and cash equivalents             $764,000       $931,000     $1,378,000
 Accounts receivable (net)           12,577,000     13,547,000     15,984,000
 Merchandise inventories             17,445,000     16,946,000     14,761,000
 Prepaid expenses and other assets    1,244,000        765,000      1,154,000
 Deferred income taxes                1,583,000
                                    ------------   ------------   ------------
Total current assets                 33,613,000     32,189,000     33,277,000
                                    ------------   ------------   ------------

Property and equipment               20,931,000     22,893,000     20,716,000
Accumulated depreciation and
 amortization                       (10,831,000)   (12,416,000)   (10,293,000)
                                    ------------   ------------   ------------
 Net property and equipment          10,100,000     10,477,000     10,423,000

Other assets                          3,353,000      2,870,000      3,469,000
                                    ------------   ------------   ------------
                                    $47,066,000    $45,536,000    $47,169,000
                                    ============   ============   ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
 Notes payable                      $11,707,000     $9,724,000     $9,219,000
 Current portion of long-term debt    1,043,000        692,000      1,043,000
 Accounts payable                     7,361,000      8,050,000      7,769,000
 Accrued liabilities                  5,784,000      7,123,000      5,461,000
                                    ------------   ------------   ------------
Total current liabilities            25,895,000     25,589,000     23,492,000
                                    ------------   ------------   ------------
Long-term debt                        1,569,000      2,612,000      1,888,000
                                    ------------   ------------   ------------
Other liabilities                        11,000         11,000         11,000
                                    ------------   ------------   ------------
Shareholders' equity:
 Preferred stock, 3,000,000 shares
  authorized, none issued
 Common stock, 6,333,433 shares
  issued                              1,267,000      1,267,000      1,267,000
 Capital in excess of par value      15,660,000     15,660,000     15,660,000
 Retained earnings                    7,262,000      4,995,000      9,449,000
                                    ------------   ------------   ------------
                                     24,189,000     21,922,000     26,376,000
                                    ------------   ------------   ------------
Treasury stock (1,415,134 shares
 at cost)                            (4,598,000)    (4,598,000)    (4,598,000)
                                    ------------   ------------   ------------
Total shareholders' equity           19,591,000     17,324,000     21,778,000
                                    ------------   ------------   ------------
                                    $47,066,000    $45,536,000    $47,169,000
                                    ============   ============   ============

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                       - 2 -
<PAGE>
<TABLE>
                         Evans, Inc. and Subsidiaries
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<CAPTION>
                           Thirteen weeks ended        Twenty-six weeks ended
                        --------------------------   --------------------------
                          Aug. 31,      Aug. 26,       Aug. 31,      Aug. 26,
                            1996          1995           1996          1995
                        ------------  ------------   ------------  ------------
<S>                     <C>           <C>            <C>           <C>
Net sales                $6,754,000    $7,999,000    $15,593,000   $20,299,000
Service revenues          4,220,000     4,328,000      8,884,000     9,309,000
                        ------------  ------------   ------------  ------------
                         10,974,000    12,327,000     24,477,000    29,608,000
                        ------------  ------------   ------------  ------------
Costs and expenses:

 Cost of goods and
  services sold, buying
  and occupancy costs     7,706,000     8,978,000     16,197,000    20,956,000
 Selling and general
  expenses                5,239,000     5,396,000     11,169,000    12,021,000
 Provision for doubtful
  accounts                   86,000       102,000        199,000       250,000
 Interest expense           354,000       324,000        687,000       604,000
 Other income, net           (5,000)       --             (5,000)       (3,000)
                        ------------  ------------   ------------  ------------
                         13,380,000    14,800,000     28,247,000    33,828,000
                        ------------  ------------   ------------  ------------

Loss before credit
 for income taxes        (2,406,000)   (2,473,000)    (3,770,000)   (4,220,000)

Credit for income taxes   1,010,000        --          1,583,000        --
                        ------------  ------------   ------------  ------------
Net loss                ($1,396,000)  ($2,473,000)   ($2,187,000)  ($4,220,000)
                        ============  ============   ============  ============

Net loss per common
 share                       ($0.28)       ($0.50)        ($0.44)       ($0.86)
                        ------------  ------------   ------------  ------------

Cash dividends per
 common share                --            --             --            --

Weighted average number
 of common shares
 outstanding              4,918,301     4,918,301      4,918,301     4,918,301
                        ============  ============   ============  ============

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                       - 3 -
<PAGE>
<TABLE>
                         Evans, Inc. and Subsidiaries
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

<CAPTION>
                                                  Twenty-six weeks ended
                                              -------------------------------
                                              Aug. 31, 1996     Aug. 26, 1995
                                              -------------     -------------
<S>                                           <C>               <C>
Cash Flows from Operating Activities:

Net loss                                      ($2,187,000)      ($4,220,000)

Adjustments to reconcile net loss to net
 cash used in operating activities:
  Depreciation and amortization                   681,000           691,000
  Provision for doubtful accounts                 199,000           250,000

Change in assets and liabilities:
  Accounts receivable                           3,208,000         3,308,000
  Merchandise inventories                      (2,684,000)         (545,000)
  Prepaid expenses and other current assets       (90,000)         (253,000)
  Deferred income taxes                        (1,583,000)                0
  Other assets                                     13,000           100,000
  Accounts payable                               (408,000)       (2,627,000)
  Accrued liabilities                             323,000           193,000
  Other liabilities                                     0            (5,000)
                                              ------------      ------------
Net cash used in operating activities          (2,528,000)       (3,108,000)

Cash Flows from Investing Activities:

Proceeds from the sale of property
 and equipment                                      5,000            10,000
Additions to property and equipment              (260,000)         (484,000)
                                              ------------      ------------
Net cash used in investing activities            (255,000)         (474,000)

Cash Flows from Financing Activities:

Proceeds from short-term borrowing              2,488,000         1,654,000
Principal payments on long-term debt             (319,000)          (41,000)
                                              ------------      ------------
Net cash provided by financing activities       2,169,000         1,613,000
                                              ------------      ------------
Net decrease in cash and cash equivalents        (614,000)       (1,969,000)
Cash and cash equivalents at beginning
 of period                                      1,378,000         2,900,000
                                              ------------      ------------
Cash and cash equivalents at end of period       $764,000          $931,000
                                              ============      ============

Supplemental Disclosures of Cash Flow Information:
--------------------------------------------------
Cash paid during the period for:
  Interest                                       $583,000          $532,000
  Income taxes                                     75,000            15,000

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       - 4 -
<PAGE>

                         EVANS, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 (Unaudited)

1.  The financial information included herein was prepared in conformity
    with generally accepted accounting principles and such principles were
    applied on a basis consistent with those reflected in the 1996 Form
    10-K Annual Report filed with the Securities and Exchange Commission.
    The accompanying financial data should be read in conjunction with
    the notes to consolidated financial statements contained in the 1996
    Form 10-K Annual Report.

    The information furnished herein, other than the Condensed Consolidated
    Balance Sheet as of March 2, 1996, is unaudited and includes all adjustments
    and accruals consisting only of normal recurring adjustments which
    are, in the opinion of management, necessary for a fair statement of
    results for the interim periods.  The Condensed Consolidated Balance
    Sheet as of March 2, 1996 has been derived from, and does not include
    all the disclosures contained in the audited financial statements as
    of and for the year ended March 2, 1996.

2.  Because of the seasonal nature of the Company's business, operating
    results for the first twenty-six weeks are not considered to be indicative
    of the results that may be expected for the full year.  Historically,
    the Company realizes a major portion of its annual revenues and most
    of its earnings in the fourth quarter of its fiscal year.

3.  Common share equivalents were not included in the computation of
    earnings per share for the thirteen and twenty-six weeks ended August
    31, 1996 and August 26, 1995, because the periods resulted in net losses
    and the effect would be antidilutive.

4.  Certain reclassifications have been made to the Condensed Consolidated
    Balance Sheets for August 26, 1995 and March 2, 1996 and the Condensed
    Consolidated Statement of Cash Flows for the twenty-six weeks ended
    August 26, 1995 to conform to the presentation for August 31, 1996.
    Such reclassifications did not effect the previously reported operating
    results.

5.  On October 11, 1996, the Company amended its revolving credit agreement
    to reflect its current operating condition.

                                       - 5 - 
<PAGE>

                         EVANS, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued

                                 (Unaudited)

6.  On September 27, 1996, the Company entered into a contract, subject
    to due diligence on behalf of the purchaser, to sell its property in
    Fort Worth, Texas for $350,000.  The purchase agreement, as contemplated,
    is expected to close no later than December 13, 1996.  Proceeds will be
    used to pay down long-term debt as required by the loan agreement.

7.  Subsequent to the second quarter of fiscal 1997, the Company, pursuant
    to the Evans, Inc. 1994 Stock Option Program, granted 41,500 options
    to 62 key employees at the price of $2.25 being 100% of market value
    on the date of grant.

                                       - 6 - 
<PAGE>

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations

Liquidity and Capital Resources

Cash and cash equivalents at August 31, 1996 were $764,000 as compared
to $1,378,000 at March 2, 1996.  The decrease was due to cash used
in operating activities of $2,528,000 and cash used in investing activities
of $255,000, partially offset by cash provided by financing activities
of $2,169,000.

The cash used in operating activities was due primarily to the net
loss of $2,187,000, an increase in merchandise inventories of $2,684,000
due to the seasonal nature of the Company's business and a decrease
in accounts payable of $408,000, partially offset by a decrease in
accounts receivable of $3,208,000.

The cash used in investing activities was largely the result of additions
to property and equipment of $260,000.

The cash provided by financing activities was due primarily to an increase
in notes payable of $2,488,000, partially offset by principal payments
on long-term debt of $319,000.

Working capital at August 31, 1996 was $7,718,000 as compared to $9,785,000
at March 2, 1996.

The revolving line of credit which expires May 31, 1998 is considered
adequate to finance seasonal inventory requirements as well as commitments
for capital expenditures during fiscal 1997.

Results of Operations

Total revenues for the second quarter ended August 31, 1996 decreased
$1,353,000 (11.0%) as compared to the same period last year.  Overall,
fur merchandise sales were comparable with the prior year.  Included
in the second quarter were $335,000 in sales associated with a successful
store closing event related to the termination of the Company's license
agreement with Strawbridge & Clothier partially offset by a $261,000
(8.8%) decrease at comparable locations and an $81,000 decrease associated
with locations closed subsequent to the second quarter of the prior
year.  Women's ready-to-wear sales decreased $1,238,000 (25.0%) due
primarily to a decrease of $1,088,000 (22.6%) in sales at comparable
locations and a decrease of $150,000 in sales associated with a Company
owned location closed subsequent to the second quarter of the prior
year.  Service revenues decreased $108,000 (2.5%) due primarily to
a decrease of $210,000 in sales associated with locations closed subsequent
to the second quarter of the prior year partially offset by an increase
of $102,000 (2.6%) in sales at comparable locations.

                                       - 7 - 
<PAGE>

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations

Results of Operations, continued

Total revenues for the first six months decreased $5,131,000 (17.3%)
as compared to the same period last year.  Fur merchandise sales decreased
$1,573,000 (19.1%) due primarily to a $1,150,000 (15.6%) decrease in
sales at comparable locations and a $758,000 decrease in sales associated
with locations closed during and subsequent to the first quarter of
the prior year.  These decreases were partially offset by $335,000
in sales associated with a successful store closing event as a result
of the termination of the Company's license agreement with Strawbridge
& Clothier.  Women's ready-to-wear sales decreased $3,133,000 (26.0%)
due primarily to a $2,467,000 (21.7%) decrease in sales at comparable
locations and a $666,000 decrease in sales associated with two Company
owned locations closed during and subsequent to the first quarter of
the prior year. The decrease in women's ready-to-wear sales at comparable
locations is indicative of the fiercely competitive retail atmosphere in
women's apparel.  Service revenues decreased $425,000 (4.6%) due primarily
to a $688,000 decrease in sales associated with locations closed during
and subsequent to the first quarter of the prior year, partially offset
by an increase of $263,000 (3.1%) in sales at comparable locations.

Cost of goods and services sold, buying and occupancy costs as a percentage
of total revenues for the second quarter and first six months decreased
(70.2% versus 72.8% and 66.2% versus 70.8%, respectively) in comparison
with the prior year periods.  Cost of goods and services sold as a
percentage of total revenues for the second quarter and first six months
decreased (49.4% versus 52.2% and 47.1% versus 53.5%, respectively)
due primarily to the Company's continuing to achieve higher gross margins
on merchandise sales.  Buying costs as a percentage of total revenues
for the second quarter and first six months were comparable with prior
year levels.  Occupancy costs as a percentage of total revenues for
the second quarter were comparable with the same period last year.
Occupancy costs as a percentage of total revenues for the first six
months increased (15.4% versus 14.3%) due primarily to the impact of
fixed rental costs as measured against the overall decrease in sales.

Total selling and general expenses decreased $157,000 (2.9%) and $852,000
(7.1%) for the second quarter and first six months, respectively, as
compared to the prior year periods.  Payroll and related fringe benefits
decreased $161,000 (4.1%) and $618,000 (7.4%) for the second quarter
and first six months, respectively, due primarily to costs associated
with locations closed during and subsequent to the first quarter of
the prior year and staff reductions initiated subsequent to the second
quarter of the prior year.  Advertising expense decreased $58,000 (16.9%)
and $292,000 (19.5%) for the second quarter and first six months, respectively.

                                       - 8 - 
<PAGE>

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations

Results of Operations, continued

Interest expense for the second quarter and first six months increased
$30,000 (9.3%) and $83,000 (13.7%) respectively, due primarily to higher
average short-term borrowings as compared to the prior year periods.

The lower pre-tax losses for the second quarter and first six months
($2,406,000 versus $2,473,000 and $3,770,000 versus $4,220,000, respectively)
were due largely to the increase in gross margin percentages and the
decrease in selling and general expenses in comparison with the same
periods last year.

The income tax credits for the second quarter and first six months
of the prior year were offset by increases in the Company's valuation
allowance with respect to the future tax benefits of the net operating
losses as a result of the uncertainty of their ultimate realization.

                                       - 9 - 
<PAGE>

                      PART II - OTHER INFORMATION.

Item 6.    Exhibits and Reports on Form 8-K

           (a)  Exhibits

           Part I.  Exhibit 4.53

                       Amendment No. 6 to Loan and Security Agreement between
                       Registrant and Transamerica Business Credit Corporation.

                    Exhibit 11

                       Computation of earnings per share.

           (b)  Reports on Form 8-K  --  There were no reports on Form 8-K
                filed during the thirteen weeks ended August 31, 1996.

    Items other than those listed are omitted because they are not required.

                                      - 10 - 
<PAGE>

                                 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
of the undersigned thereunto duly authorized.

                                           EVANS, INC.   

DATE:   October 11, 1996                   PATRICK J. REGAN
                                           PATRICK J. REGAN
                                           President and
                                           Chief Executive Officer

DATE:   October 11, 1996                   WILLIAM E. KOZIEL
                                           WILLIAM E. KOZIEL
                                           Vice President and
                                           Chief Financial Officer

                                      - 11 - 
<PAGE>

                         EVANS, INC. AND SUBSIDIARIES

                     Exhibit                Page Nos.

                      4.53                   13 - 14

                       11                      15


                                      - 12 - 
<PAGE>

              AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT

  AMENDMENT NO. 6, dated as of October 11, 1996, between TRANSAMERICA
BUSINESS CREDIT CORPORATION ("Lender"), and EVANS, INC. ("Borrower"),
and Borrower's wholly-owned Subsidiaries, KOSLOW'S, INC. ("Koslow")
and EVANS - ROSENDORF OF MARYLAND, INC. ("Rosendorf") (Koslow and Rosendorf
individually, a "Borrowing Subsidiary", and collectively, "Borrowing
Subsidiaries").

  Lender and Borrower and Borrowing Subsidiaries are parties to a Loan
and Security Agreement dated as of May 31, 1995, as amended by Amendment
No. 1 to Loan and Security Agreement dated as of October 3, 1995, by
Amendment No. 2 to Loan and Security Agreement dated as of November
20, 1995, by Amendment No. 3 to Loan and Security Agreement dated as
of January 5, 1996, by Amendment No. 4 to Loan and Security Agreement
dated as of May 30, 1996, and by Amendment No. 5 to Loan and Security
Agreement dated as of July 5, 1996 (the "Loan and Security Agreement").
Lender, Borrower and Borrowing Subsidiaries desire to amend the Loan
and Security Agreement in certain respects and, accordingly, the parties
hereto agree as follows:

  1.  Definitions.  Except as otherwise provided herein, the terms defined
in the Loan and Security Agreement are used herein as defined therein.

  2.  Amendment.  Effective as of August 31, 1996, Section 7.3(E) of
the Loan and Security Agreement is amended and restated as follows:

  "(E)  Average Inventory Days (i) at the end of the second Fiscal Quarter
  of the 1997 Fiscal Year, of not more than 420, (ii) at the end of the
  third Fiscal Quarter of the 1997 Fiscal Year, of not more than 208,
  and (iii) at the end of each Fiscal Quarter, commencing with the fourth
  Fiscal Quarter of the 1997 Fiscal Year, not more than the number set
  opposite such Fiscal Quarter in the following schedule:

          Fiscal Quarter          Average Inventory Days

             First                         300
             Second                        375
             Third                         200
             Fourth                        125"

  3.  Term Note B.  The maturity date of Term Note B is extended to the
earlier of  (a) the date on which Borrower sells its owned Real Property
commonly described as 405 West Seventh Street, Fort Worth, Texas, or
(b) December 31, 1996.

  4.  Representation and Warranty.  Borrower and each Borrowing Subsidiary
represents and warrants to Lender that the execution and delivery by
Borrower and each Borrowing Subsidiary of this Amendment No. 6 are
within Borrower's and each Borrowing Subsidiary's corporate power,
have been duly authorized by all necessary or proper corporate action,

                                      - 13 -
<PAGE>

are not in contravention of any provision of Borrower's or either Borrowing
Subsidiary's Articles or Certificate of Incorporation or By-Laws, will
not violate any law or regulation, or any order or decree of any court
or governmental instrumentality, will not conflict with or result in
the breach or termination of, constitute a default under, or accelerate
any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Borrower or either Borrowing
Subsidiary is a party or by which Borrower or either Borrowing Subsidiary
or any of its property is bound and do not require the consent or approval
of any governmental body, agency, authority or any other person.

  4.  Miscellaneous.  Except as herein provided, the Loan and Security
Agreement shall remain unchanged and in full force and effect.  This
Amendment No. 6 may be executed in any number of separate counterparts,
each of which shall, collectively and separately, constitute one agreement.
This Amendment No. 6 and the obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws
of the State of Illinois applicable to contracts made and performed
in such state, without regard to the principles thereof regarding conflict
of laws, and any applicable laws of the United States of America.

  IN WITNESS WHEREOF, this Amendment No. 6 has been duly executed as
of the day and year specified at the beginning hereof.

TRANSAMERICA BUSINESS CREDIT                EVANS, INC.
CORPORATION

By:        MATTHEW N. MCALPINE              By:        WILLIAM E. KOZIEL
   Name:   MATTHEW N. MCALPINE                 Name:   WILLIAM E. KOZIEL
   Title:  Senior Account Executive            Title:  Vice President and
                                                       Chief Financial Officer

                                            KOSLOW'S, INC.

                                            By:        WILLIAM E. KOZIEL
                                               Name:   WILLIAM E. KOZIEL
                                               Title:  Vice President and
                                                       Chief Financial Officer

                                            EVANS - ROSENDORF OF
                                            MARYLAND, INC.

                                            By:        WILLIAM E. KOZIEL
                                               Name:   WILLIAM E. KOZIEL
                                               Title:  Vice President and
                                                       Chief Financial Officer

                                      - 14 -
<PAGE>
<TABLE>
                                  EXHIBIT 11
                         EVANS, INC. AND SUBSIDIARIES
                      COMPUTATION OF EARNINGS PER SHARE

<CAPTION>
                          Thirteen  weeks  ended      Twenty-six  weeks  ended
                        --------------------------   --------------------------
                          Aug. 31,      Aug. 26,       Aug. 31,      Aug. 26,
                            1996          1995           1996          1995
                        ------------  ------------   ------------  ------------
<S>                     <C>           <C>            <C>           <C>
        Primary:
        --------

Weighted average
 shares outstanding       4,918,301     4,918,301      4,918,301     4,918,301

Incremental shares
 for exercise of
 stock options               99,165        --             42,487        --
                        ------------  ------------   ------------  ------------
Adjusted number of
 common shares
 outstanding              5,017,466     4,918,301      4,960,788     4,918,301
                        ============  ============   ============  ============

Net loss                ($1,396,000)  ($2,473,000)   ($2,187,000)  ($4,220,000)
                        ============  ============   ============  ============

 Net loss per share          ($0.28)       ($0.50)        ($0.44)       ($0.86)
                             =======       =======        =======       =======


     Fully diluted:
     --------------

Weighted average
 shares outstanding       4,918,301     4,918,301      4,918,301     4,918,301

Incremental shares
 for exercise of
 stock options              160,900        --            160,900        --
                        ------------  ------------   ------------  ------------
Adjusted number of
 common shares
 outstanding              5,079,201     4,918,301      5,079,201     4,918,301
                        ============  ============   ============  ============

Net loss                ($1,396,000)  ($2,473,000)   ($2,187,000)  ($4,220,000)
                        ============  ============   ============  ============

 Net loss per share          ($0.27)       ($0.50)        ($0.43)       ($0.86)
                             =======       =======        =======       =======

                                      - 15 -

</TABLE>