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<TITLE>Moto Photo, Inc. and Subsidiaries</TITLE>
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<B><P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">FORM 10-Q</P>
<P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">Washington, D.C. 20549</P>
</B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">(Mark One)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">{X}  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">For the quarterly period ended:  September 30, 1999 </P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">OR </P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">{ }   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">For the transition period from ______________ to ________________</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Commission file number:    <U>0-11927</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<U><P ALIGN="CENTER">		Moto Photo Inc.		</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P><DIR>
<DIR>
<DIR>
<DIR>

<P>	<U>	Delaware 		</U>			     		<U>		31-1080650		</P>
</U></DIR>

<P>(State or other jurisdiction of			(IRS Employer Identification Number)</P>
<P> Incorporation or organization)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P></DIR>
</DIR>
</DIR>

<U><P ALIGN="CENTER">	4444 Lake Center Dr. Dayton, OH  45426	</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> (Address of principal executive offices with Zip Code)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<U><P ALIGN="CENTER">		(937) 854-6686		</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">(Registrant's telephone number, including area code)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<U><P ALIGN="CENTER">		No Change		</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">(Former name, former address, and former fiscal year, if changed since last report)</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">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.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Yes<U>	X	</U>  No<U>		</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">APPLICABLE ONLY TO ISSUERS IN BANKRUPTCY </P>
<P ALIGN="CENTER">PROCEEDINGS DURING THE PRECEDING FIVE YEARS.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">     Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Yes<U>		</U>  No<U>		</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">APPLICABLE ONLY TO CORPORATE ISSUERS</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Indicate the number of shares outstanding of each of the issuer's classes of common stock:</P>
<P ALIGN="CENTER">As of November 10, 1999: </P>
<P ALIGN="CENTER">7,773,178 - Voting Common,   0 - Non - Voting Common</P>
<P ALIGN="CENTER"></P>
<FONT FACE="Times" SIZE=4><P></P>
</FONT><P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER">Index</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Moto Photo, Inc. and Subsidiaries</P>

<P> </P>
</B><P>Part I.	Financial Information</P>
<DIR>

<P>Item 1.	Financial Statements (Unaudited)</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P>Consolidated balance sheets <FONT FACE="Symbol">3⁄4</FONT>
 September 30, 1999 and December 31, 1998</P>

<P>Consolidated statements of operations <FONT FACE="Symbol">3⁄4</FONT>
 Three months ended September 30, 1999 and 1998 and nine months ended September 30, 1999 and 1998.</P>

<P>Consolidated statements of cash flows <FONT FACE="Symbol">3⁄4</FONT>
 Nine months ended September 30, 1999 and 1998</P>

<P>Notes to consolidated financial statements <FONT FACE="Symbol">3⁄4</FONT>
 September 30, 1999</P>

<P>Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations</P>
</DIR>
</DIR>
</DIR>

<P>Part II.	Other Information</P>

<P> </P><DIR>
<DIR>
<DIR>

<P>Signatures</P>
</DIR>
</DIR>
</DIR>

<B><P>Part I.	Financial Information</P>
<P>Item 1.	Financial Statements </P>
<P>Moto Photo, Inc. and Subsidiaries</P>
</B>
<B><P>Consolidated Balance Sheets</P>
<P>(Unaudited)</P>
</B><FONT SIZE=3></FONT>
<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=1 CELLPADDING=1 WIDTH=633>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">September 30,</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">December 31,</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">1999</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">1998</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=21><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=21><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<B><P>Assets</B></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Current Assets:</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Cash </TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,282,193</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">2,918,396</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Accounts receivable, less allowances of $842,000 in 1999 and $1,092,000 in 1998 </DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">4,098,881</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">4,188,807</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Notes receivable, less allowances of $90,000 in 1999 and $172,000 in 1998</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">324,680</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">437,669</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Inventory</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">2,061,618</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">2,457,950</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Deferred tax assets</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,380,000</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,213,000</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Prepaid expenses</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">137,053</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">116,081</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total current assets</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">9,284,425</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">11,331,903</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Property and equipment</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">4,332,141</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">3,712,064</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<B><P>Other assets</B></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Notes receivable, less allowances of $1,198,000 in 1999 and $1,228,000 in 1998 </DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">1,941,601</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">1,897,755</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Cost of franchises and contracts acquired</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">129,630</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">155,688</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Goodwill</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">3,621,261</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">3,728,816</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Deferred tax assets</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">57,000</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">57,000</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Other assets</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,023,446</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,050,567</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total assets</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">20,389,504</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">21,933,793</TD>
</TR>
</TABLE>
</CENTER></P>

<I>
<P>See accompanying notes.</P>
</I>
<B><P>Moto Photo, Inc. and Subsidiaries</P>
</B>
<B><P>Consolidated Balance Sheets, continued</P>
<P>(Unaudited)</P>
</B>
<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=1 CELLPADDING=1 WIDTH=633>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<P ALIGN="CENTER">September 30,</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<P ALIGN="CENTER">December 31,</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">1999</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="CENTER">1998</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<B><P>Liabilities and stockholders' equity</B></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Current liabilities:</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Accounts payable</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">3,450,935</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">4,251,043</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Accrued payroll and benefits</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">468,971</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">560,901</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Accrued income taxes</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">384,049</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">384,049</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Accrued expenses</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">638,352</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">808,919</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Current portion of long-term obligations </TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,529,000</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,534,000</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Other</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">324,693</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">310,540</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total current liabilities</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">6,796,000</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,849,452</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Long-term obligations </TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">8,386,122</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">9,064,001</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Deferred revenue</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">99,434</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">99,434</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total liabilities</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">15,281,556</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">17,012,887</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<B><P>Stockholders' equity</B></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Preferred stock $.01 par value:</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Authorized shares - 2,000,000:</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Series G cumulative nonvoting preferred shares, 1,000,000 shares issued and outstanding with preferences aggregating $10,000,000</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">10,000</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">10,000</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Common shares $.01 par  value:</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Authorized shares - 30,000,000</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>
<DIR>

<P>Issued shares 7,871,728 in 1999 and 7,833,573 in 1998</DIR>
</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">78,717</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">78,336</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Treasury stock (98,550 shares at par)</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">(986)</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">  -  </TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>Paid-in capital</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">6,047,244</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">6,404,734</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17>
<P>(Deficit) retained earnings subsequent to June 30, 1991</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">(1,027,027)</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">(1,572,164)</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total stockholders' equity</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">5,107,948</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">4,920,906</TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Total liabilities and stockholders' equity</DIR>
</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">20,389,504</TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$</TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">21,933,793</TD>
</TR>
</TABLE>
</CENTER></P>

<I>
<P>See accompanying notes.</P>
</I><FONT FACE="Times" SIZE=4>
</FONT><B><P>Moto Photo, Inc. and Subsidiaries</P>

<P>Consolidated Statements of Operations</P>
<P>(Unaudited)</P>
</B>
<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=1 CELLPADDING=1 WIDTH=711>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=98><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=98>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Three Months Ended September 30, 1999</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=98><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=98>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Three Months Ended September 30, 1998</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=98><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=98>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Nine Months Ended September 30, 1999</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=98><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=98>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Nine Months Ended September 30, 1998</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<B><P>Revenue</B></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Sales and other revenue</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$    9,647,795</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$    9,676,168</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$  25,931,139</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$   26,106,990</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Interest income</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">57,399</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">85,552</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">196,418</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">278,509</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Other income</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">35,516</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">170</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">42,045</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">25,266</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$    </TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$    </TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">$  </TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>$   </TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<B><P>Expenses</B></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Cost of sales and operating expenses</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,169,059</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">6,796,880</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">19,200,086</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">19,004,132</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Selling, general, and administrative costs</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,437,970</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">1,798,326</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">4,241,270</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">4,775,646</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Advertising</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">337,675</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">266,737</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">874,648</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">842,244</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Depreciation and amortization</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">355,328</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">268,986</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">916,729</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">703,972</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><DIR>

<P>Interest expense</DIR>
</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">114,971</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">104,079</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">319,496</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">314,678</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT"></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Income before income taxes</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">325,707</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>        526,882</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">617,373</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>        770,093</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Income tax benefit</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">245,000</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>          49,000</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">167,000</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>               -     </TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Net income </TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">570,707</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>        575,882</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">784,373</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>        770,093</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Preferred stock dividend requirements</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">(65,930)</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>         (68,381)</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">(199,885)</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>       (206,709)</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Net income applicable to common shares</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $       504,777</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $     507,501</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $       584,488</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $     563,384</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Net income per common share - Basic</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $             0.06</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $           0.06</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $             0.07</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $           0.07</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Net  income per common shares - Diluted</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $             0.05</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $           0.06</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $             0.07</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P> $           0.07</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Weighted average shares outstanding - Basic</TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,827,530</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>     7,817,075</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,836,967</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P>     7,810,399</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=17>
<P>Weighted average shares outstanding - Diluted </TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">16,659,310</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,861,762</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,838,150</TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<P ALIGN="RIGHT">7,950,898</TD>
</TR>
</TABLE>
</CENTER></P>

<I>
<P>See accompanying notes.</P>
</I><FONT FACE="Times" SIZE=4>
</FONT><B><P>Moto Photo Inc and Subsidiaries</P>

<P>Consolidated Statements of Cash Flows</P>
<P>(Unaudited)</P>
</B>
<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=714>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=3><P ALIGN="CENTER">Nine Months Ended September 30, 1999</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=3><P ALIGN="CENTER">Nine Months Ended September 30, 1998</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<B><FONT SIZE=3><P>Operating Activities</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Net income   </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P> $              784,373 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P> $              770,093 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Adjustments to reconcile net income to net cash provided by operating activities:</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Depreciation and amortization</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 916,729 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 703,972 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Provision for losses on inventory and receivables</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 344,449 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 298,646 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Notes receivable increase from sale of franchise</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                    (7,133)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Loss on disposition of assets</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   87,204 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Write off of assets due to store closings and abandoned assets</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   32,799 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   32,257 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Issuance of stock for directors fees</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   44,878 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   23,413 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Increase (decrease) resulting from changes in:</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Accounts receivable</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (449,341)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   95,638 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Inventory and prepaid expenses</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 354,576 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (387,642)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Other assets</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                  (40,679)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (209,163)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Deferred taxes</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (167,000)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Accounts payable and accrued expenses</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,062,605)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (928,710)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>
<DIR>

<FONT SIZE=3><P>Deferred revenues and other liabilities</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   14,151 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   24,389 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Net cash provided by operating activities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 772,330 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 502,964 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<B><FONT SIZE=3><P>Investing Activities</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Purchases of equipment and leaseholds</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,272,548)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,054,579)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Proceeds from sale of assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   19,000 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   22,000 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Payments received on notes receivable</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 319,295 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                 484,826 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Purchases of held-to-maturity investments</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>           (75,000,000)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Proceeds from maturity of held-to-maturity investments</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             75,000,000 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Net cash used in investing activities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (934,253)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (547,753)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<B><FONT SIZE=3><P>Financing Activities</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=9><DIR>

<FONT SIZE=3><P>Principal payments on long-term debt and capital lease obligations</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=3>
<P>                (832,073)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=3>
<P>                (798,168)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Payments of preferred dividends</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (525,000)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (450,000)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><DIR>

<FONT SIZE=3><P>Purchase of common shares for treasury stock</DIR>
</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                (117,207)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Common shares issued</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                            -  </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>                   21,875 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Net cash used in financing activities</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,474,280)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,226,293)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Decrease in cash and equivalents</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,636,203)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>             (1,271,082)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Cash and cash equivalents at beginning of period</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>              2,918,396 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>              3,139,252 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P>Cash and cash equivalents at end of period</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P> $           1,282,193 </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=4><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=4>
<FONT SIZE=3><P> $           1,868,170 </FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<I>
<P>See accompanying notes.</P>
</I><B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Moto Photo, Inc and Subsidiaries</P>
<P ALIGN="CENTER">Notes to Consolidated Financial Statements</P>
<P ALIGN="CENTER">September 30, 1999</P>
<P ALIGN="CENTER">"Unaudited"</P>
</B>
<P> </P>
<B><P ALIGN="JUSTIFY">A.	Basis of Presentation</P>
</B>
<P ALIGN="JUSTIFY">The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments which were considered necessary
for a fa
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The internal accounting for the Company is on a fiscal calendar quarter basis.  The fiscal quarter dates may vary from the calendar quarter dates, (i.e. October 2 vs. September 30 for the third quarter 1999), except for the fourth
quarter which ends on December 31.  The differences in ending dates are immaterial.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect amounts reported in the financial statements.  Actual results could differ from those
estimates.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">For further information, refer to the consolidated financial statements and footnotes thereto included in Moto Photo, Inc. and Subsidiaries' annual report on Form 10-K for the year ended December 31, 1998.</P>

<B><P ALIGN="JUSTIFY">B.	Reclassification</P>
</B>
<P ALIGN="JUSTIFY">Certain amounts from the prior period have been reclassified to conform to the current period presentation.</P>
<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><B><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">C.	Segment Information</P>
</B><FONT SIZE=3>
<P> </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=657>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=5 HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Three Months Ended September 30, 1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Development</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Company</P>
<P ALIGN="CENTER">Stores</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Royalties </P>
<P ALIGN="CENTER">and</P>
<P ALIGN="CENTER">Advertising</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Wholesale</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Sales and other revenue</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$         128,625</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   3,497,779</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   1,274,961</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   4,746,430</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   9,647,795</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">979</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">277,863</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">3,225</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">2,306</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">284,373</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Operating segment contribution </P><DIR>

<P>prior to interest expense,  interest income, income taxes and unallocated corporate expenses</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(53,245)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(355,226)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">839,135</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(78,643)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">352,021</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                     -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">586,169</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">586,169</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=3>
<P> </P>
<P> </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=657>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<B><FONT SIZE=3><P ALIGN="CENTER">Three Months Ended September 30, 1998</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Development</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Company</P>
<P ALIGN="CENTER">Stores</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Royalties</P>
<P ALIGN="CENTER">and</P>
<P ALIGN="CENTER">Advertising</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Wholesale</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Sales and other revenue</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$         176,417</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   3,557,063</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   1,347,410</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   4,595,278</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   9,676,168</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">1,043</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">185,576</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">3,230</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">24,682</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">214,531</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Operating segment contribution </P><DIR>

<P>prior to interest expense, interest income, income taxes and unallocated corporate expenses</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(99,341)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(70,616)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">934,323</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(173,419)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">590,947</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                     -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">783,814</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">783,814</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=3>
<B><P ALIGN="JUSTIFY"> </P>
</FONT><P ALIGN="JUSTIFY">C.	Segment Information (continued)</P>
</B><FONT SIZE=3>
</FONT><FONT SIZE=3><P> </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=657>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=5 HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Nine Months Ended September 30, 1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Development</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Company</P>
<P ALIGN="CENTER">Stores</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Royalties </P>
<P ALIGN="CENTER">and</P>
<P ALIGN="CENTER">Advertising</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Wholesale</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Sales and other revenue</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$         277,545</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   9,384,039</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   3,624,231</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$  12,645,324</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$  25,931,139</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">2,937</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">684,336</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">9,677</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">6,918</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">703,868</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Operating segment contribution </P><DIR>

<P>prior to interest expense, interest income, income taxes and unallocated corporate expenses</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(305,468)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(1,150,750)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">2,423,449</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(250,481)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">716,750</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Identifiable segment assets</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">76,296</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">9,140,448</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">878,514</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">4,350,791</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">14,446,049</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                     -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">1,345,076</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">878</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">1,345,954</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=3>
<P> </P>
<P> </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=657>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="64%" VALIGN="TOP" COLSPAN=5 HEIGHT=6>
<B><FONT SIZE=3><P ALIGN="CENTER">Nine Months Ended September 30, 1998</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Development</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Company</P>
<P ALIGN="CENTER">Stores</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Royalties</P>
<P ALIGN="CENTER">and</P>
<P ALIGN="CENTER">Advertising</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Wholesale</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Sales and other revenue</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$        235,417</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   9,741,260</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$   3,699,273</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$ 12,431,040</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$ 26,106,990</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">2,807</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">464,555</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">9,474</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">63,362</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">540,198</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Operating segment contribution </P><DIR>

<P>prior to interest expense, interest income, income taxes and  unallocated corporate expenses</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(400,581)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(779,602)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">2,539,944</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(551,624)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">808,137</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Identifiable segment assets</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">56,398</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">8,964,474</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">834,374</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">3,687,432</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">13,542,678</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                     -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">949,223</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">2,635</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P>                  -  </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=3><P ALIGN="RIGHT">951,858</FONT></TD>
</TR>
</TABLE>

<B>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">C.	Segment Information (continued)</P>
</B>
<P> </P>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=681>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=3 HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Three Months Ended September 30,</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=3 HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">Nine Months Ended September 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P>Revenue</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><FONT SIZE=3><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12><DIR>

<FONT SIZE=3><P>Total sales and other revenue for reportable segments</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">$9,647,795</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">$9,676,168</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">$25,931,139</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">$26,106,990</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Interest income</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">57,399</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">85,552</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">196,418</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">278,509</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Other income</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">35,516</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">170</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">42,045</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">25,266</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P>Total consolidated revenues</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$9,740,710</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$9,761,890</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$26,169,602</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<FONT SIZE=3><P ALIGN="RIGHT">$26,410,765</FONT></TD>
</TR>
</TABLE>

<B>
<P> </P></B>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=628>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<P> </P>
<B><P>Other Significant items</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Segment </P>
<P ALIGN="CENTER">Total</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Corporate</B></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Consolidated Total</B></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Three Months Ended September 30, 1999</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<P>Depreciation and amortization</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">$284,373</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">$70,955</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">$355,328</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12><DIR>

<P>Operating segment contribution prior to interest expense, interest income, income taxes and unallocated corporate expenses for segment totals reconciled to income before taxes</DIR>
</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">352,021</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(26,314)</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">325,707</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Capital expenditures</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">586,169</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">25,843</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">612,012</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Three Months Ended September 30, 1998</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<P>Depreciation and amortization</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">214,531</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">54,455</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">268,986</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12><DIR>

<P>Operating segment contribution prior to interest expense, interest income, income taxes and unallocated corporate expenses for segment totals reconciled to income before taxes</DIR>
</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">590,947</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(64,065)</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">526,882</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Capital expenditures</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">783,814</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">13,046</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">796,860</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Nine Months Ended September 30, 1999</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<P>Depreciation and amortization</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">703,868</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">212,861</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">916,729</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12><DIR>

<P>Operating segment contribution prior to interest expense, interest income, income taxes and unallocated corporate expenses for segment totals reconciled to income before taxes</DIR>
</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">716,750</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(99,377)</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">617,373</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Identifiable assets</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">14,446,049</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">5,943,455</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">20,389,504</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Capital expenditures</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">1,345,954</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">75,788</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">1,421,742</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<B><P ALIGN="CENTER">Nine Months Ended September 30, 1998</B></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12>
<P>Depreciation and amortization</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">540,198</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">163,774</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT">703,972</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=12><DIR>

<P>Operating segment contribution prior to interest expense, interest income, income taxes and unallocated corporate expenses for segment totals reconciled to income before taxes</DIR>
</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">808,137</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">(38,044)</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=12>
<P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">770,093</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Identifiable assets</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">13,542,678</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">6,158,330</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">19,701,008</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" HEIGHT=6>
<P>Capital expenditures</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">951,858</TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">102,721</TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=6>
<P ALIGN="RIGHT">1,054,579</TD>
</TR>
</TABLE>

<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">D.	Earnings Per Share Data</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following table sets forth the calculation of basic and diluted earnings per share for the periods indicated.</P>
<FONT SIZE=3><P ALIGN="JUSTIFY"></P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=678>
<TR><TD WIDTH="41%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="CENTER">Three Months </P>
<P ALIGN="CENTER">Ended</P>
<P ALIGN="CENTER">September 30, 1999</B></TD>
<TD WIDTH="1%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="CENTER">Three Months </P>
<P ALIGN="CENTER">Ended </P>
<P ALIGN="CENTER">September 30, 1998</B></TD>
<TD WIDTH="1%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="CENTER">Nine </P>
<P ALIGN="CENTER">Months </P>
<P ALIGN="CENTER">Ended </P>
<P ALIGN="CENTER">September 30, 1999</B></TD>
<TD WIDTH="1%" VALIGN="TOP"> </TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="CENTER">Nine </P>
<P ALIGN="CENTER">Months </P>
<P ALIGN="CENTER">Ended </P>
<P ALIGN="CENTER">September 30, 1998</B></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Numerator:</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Net income</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$        570,707</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$        575,882</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$        784,373</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$        770,093</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Preferred stock dividend requirement</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(65,930)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(68,381)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(199,884)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(206,709)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Numerator for basic earnings per share--income available to common shareholders</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">504,777</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">507,501</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">584,489</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">563,384</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Effect of dilutive securities:</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Series G preferred previously accreted dividends</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">325,116</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Series G preferred dividend requirement</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">65,930</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Numerator for diluted earnings per share--income available to common stockholders after effect of dilutive securities</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">895,823</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">507,501</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">584,489</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">563,384</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Denominator:</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Denominator for basic earnings per share--weighted average share outstanding</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">7,827,530</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">7,817,075</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">7,836,967</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">7,810,399</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Effect of dilutive securities:</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Employee stock options</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">12,038</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">44,687</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,512</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">140,499</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Convertible Series G preferred </DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,819,742</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">0</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Denominator for diluted earnings per <BR>
share--adjusted weighted average shares and dilutive securities</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">16,659,310</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">7,861,762</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">7,841,479</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT"> </P>
<P ALIGN="RIGHT">7,950,898</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Basic earnings per share</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$             0.06</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.06</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.07</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.07</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=17><DIR>

<FONT SIZE=3><P>Diluted earnings per share</DIR>
</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.05</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.06</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.07</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$              0.07</FONT></TD>
</TR>
</TABLE>


<P> </P>
<P>The Series G preferred stock were anti-dilutive for the three months ended September 30, 1998 and the nine months ended September 30, 1999 and 1998.  In the first nine months of 1999, $525,000 of dividends were paid on the Series G preferred shares. </P>

<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">E.	Supplemental Noncash Investing and Financing Cashflow Information</P>
</B>
<P>During the third quarter of 1999 the Company purchased $149,194 in equipment by assuming notes and leases totaling $149,194.</P>

<B><P ALIGN="JUSTIFY">F.	Reverse Repurchase Transaction</P>
</B>
<P>During September 1999, the Company entered into a reverse repurchase transaction relating to $75,000,000 of U.S. Treasury Securities.  The transaction was entered into with the intent of generating net interest income in an increasing interest rate
environment and capital gains that could be used to offset previously incurred capital losses.</P>

<P> </P>
<B><P><A NAME="WexPlaceHolder"></A>Item 2.  </P>
</B><P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER">Management Discussion and Analysis</P>
<P ALIGN="CENTER">of Financial Condition </P>
<P ALIGN="CENTER">and Results of Operations</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<B><P ALIGN="JUSTIFY">Results of Operations </P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company reported a net income of $570,707 or basic earnings per common share of $.06 and diluted earnings per common share of $.05 for the third quarter 1999, compared to net income of $575,882 or earnings per common share, basic
and diluted of $.06 for the third quarter 1998. For the nine months ended September 30, 1999, the Company recorded net income of $784,373 or basic and diluted earnings per common share of $.07, compared to net income of $ 770,093 or basic and diluted
earnings
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During September 1999, management implement an investment strategy with the intent of generating net interest income in an increasing interest rate environment and capital gains that could be used to offset previously incurred capital
losses.  Prior to this, the Company's capital loss carryforwards have been recorded as a deferred tax asset with a corresponding valuation allowance.  This generation of the capital gains results in a portion of the deferred assets becoming recoverable.  Th
e
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Development segment revenue decreased $48,000, or 27% for the three months ended September 30, 1999, compared to the same period a year ago primarily due to the collection of a lower initial franchise fees from four franchisees in 1999.
 This is due to a new franchise fee program introduced in certain markets.  The new program is to run through December 31, 2000.  Development segment revenue increased $42,000, or 18% for the nine months ended September 30, 1999 compared to the same period
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Compared to the same periods a year ago Company stores operating segment contribution decreased $285,000, on a sales decrease of $59,000 for the third quarter 1999 and $371,000, on a sales decrease of $357,000 for the nine months ended
September 30, 1999.  The decrease in operating segment contribution can be attributed to Moto opening four new Company stores in the third quarter of 1999.  New stores incur start up costs and are not planned for a profit until the second year of operations
les in the nine months is largely due to having six less mature Company stores in 1999 as compared to 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Capital expenditures for Company stores increased $396,000, or 42% for the nine months ended September 30, 1999 compared to the same period a year ago, due to property and equipment purchases for the four new Company stores opened in 1999
 .</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Advertising expenses increased approximately $71,000, or 27% for the three months ended September 30, 1999 compared to the same period a year ago primarily due to an overall increase in advertising levels. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Depreciation and amortization expenses increased by approximately $86,000, or 32% for the third quarter 1999 and approximately $213,000, or 30% for the nine months ended September 30, 1999, compared to the same periods a year ago
primarily as a result of depreciation on additions to property and equipment in Company stores from September 30, 1998 to September 30, 1999.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Interest income, which is mainly interest income from notes receivable and temporary investments of cash, decreased due to the collection of interest income in 1998 on certain notes which interest income was not being accrued for in
1998 due to the delinquent status of these notes.</P>

<P>Selling, general and administrative costs decreased approximately $360,000, or 20% for third quarter 1999 and approximately $534,000, or 11% for the nine months ended September 30, 1999, compared to the same periods a year ago primarily due to the
closing of the telemarketing operations in December 1998.</P>

<B><P ALIGN="JUSTIFY">Liquidity and Capital Resources</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Cash provided by operating activities increased $269,000 in 1999 as compared to 1998, primarily due to depreciation and amortization increases of $213,000 in 1999 as compared to 1998, and inventory reductions of a late 1998 special
purchase of film.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Increased purchases of property and equipment in 1999 accounted for $258,000 of the $446,000 change in net cash utilized by investing activities in 1999 as compared to 1998. Cash collections on notes receivable decreased approximately
$165,000 in 1999 as compared to 1998 due to the timing of payments. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's Board of Directors authorized a common stock repurchase program at June 30, 1999.  The timing of the amount of stock repurchased will be dictated by the overall financial and market conditions. The Board authorized
management to spend up to $500,000 to make purchases until December 31, 2000. As of September 30, 1999 management has repurchased 98,550 shares for $117,207.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">A $75,000 increase in preferred dividends payments accounted for the increase in cash used in financing activities. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During the third quarter of 1999 the Company amended their credit facilities to extend the maturity dates.</P>
<P ALIGN="JUSTIFY"></P>
<FONT SIZE=3><P ALIGN="JUSTIFY"> </P>
</FONT><B><P ALIGN="JUSTIFY"><A NAME="_Toc443124371"><A NAME="_Toc445892851"><A NAME="_Toc447092115"></P>
<P ALIGN="JUSTIFY">Year 2000</A></A></A></P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The year 2000 issue, or Y2K, refers to computer programs or computer embedded chips which use two digits rather than four digits to define the applicable year.  Any of the Company's computer software, hardware or other equipment having
date sensitive software or embedded chips could recognize a "00" date as year 1900 rather than year 2000.  If this happened, it could result in miscalculations or system failures which could be disruptive to normal business activities.  The Company has a pl
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company's plan for resolving Y2K issues has the following phases: assessment, remediation, testing, and implementation.  The Company has completed assessment of its internal software and computer hardware that could be significantly
affected by the year 2000 issue.  The Company believes that it is currently Y2K compliant on all critical internal systems.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has received written notification from most of its critical business partners that they are prepared for the Y2K issue.  The Company has been informed by its primary bank and its depository banks that they believe they are
Y2K compliant.  The Company is still in the process of gathering information about the Y2K compliance status of its key third party suppliers who are not yet prepared.  All suppliers have plans to be ready for the Y2K issue prior to <BR>
January 1, 2000.  </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company is in the implementation phase on certain of the older computer hardware used in its approved point of sale systems in franchise stores.  A software modification is currently available, at no cost, to achieve Y2K compliance
for this hardware.  It will be installed in all franchise stores as they request it. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">There are several versions of the Company sponsored point of sale software in use in franchise stores, all of which are believed to be Y2K compliant except for certain operating systems which are no longer supported by their provider.
Accordingly, the provider will not certify as to its Y2K compliance.  However, the Company has tested the software and believes that it will operate without any critical failures after December 31, 1999.  The Company will continue its testing and will attem
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company believes that all significant non-information systems are ready for the Y2K issue or has received notification that the vendors will be prepared prior to January 1, 2000. The Company plans to continue testing its operating
equipment and other equipment to ensure that it is operable in 2000 and beyond.</P>
<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">The Company has notified its franchisees of the steps they should take to ensure that there are no disruptions to their operations as a result of the Y2K issue.  The Company cannot guarantee that each franchisee will follow
through on the necessary steps, and accordingly, some short-term interruptions could occur in certain franchise stores.  The Company does not believe that this disruption will have a material impact on the Company's results of operations, financial
condition or
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company has spent no significant incremental funds to date to achieve Y2K compliance and does not anticipate doing so in the future. All expenses paid to date as well as in the future will be funded through existing cash resources
and future operating cash flows.     </P>
<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">While the Company believes it has an effective plan to resolve the Y2K issue in a timely manner, lack of historical experience and the forward-looking nature of the issues involved make it difficult to predict with certainty what
will happen on January 1, 2000 and thereafter.  It is possible that there will be disruption and unexpected business problems during the early months of 2000.  The Company intends to make contingency plans if any critical systems or suppliers are identifie
<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</FONT><B><P ALIGN="JUSTIFY"><A NAME="_Toc447092119">Market Risk</P>
<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
</B></FONT><P ALIGN="JUSTIFY">There have been no significant changes in market risk since December 31, 1998.</P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Forward Looking Statements</A></P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">All statements, other than statements of historical fact included in this report, which address activities, events or developments which the Company expects or anticipates will or may occur in the future constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements are based on certain assumptions and analyses made by the Company in light o

<P>PART II.	OTHER INFORMATION</P>

<P> </P>
<P>Item 6.		Exhibits and Reports on Form 8-K.</P>
<DIR>
<DIR>

<P>(a)		Exhibits:  See Exhibit Index immediately preceding exhibits.</P>
<DIR>

<P>(b)	Reports on Form 8-K.  The Company filed no reports on Form 8-K during the quarter ended September 30, 1999.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P></DIR>
</DIR>
</DIR>

<P ALIGN="CENTER">SIGNATURE</P>
<P ALIGN="CENTER"></P>
<P>	Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</P>

<P> </P><DIR>
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<P>MOTO PHOTO, INC.</P>

<P> </P>
<P> </P>
<P>By <U> /s/David A. Mason			</P>
</U><P>     David A. Mason</P>
<P>     Executive Vice President,</P>
<P>     Treasurer, and Chief</P>
<P>     Financial Officer</P>

<P> </P>
<P> </P></DIR>
</DIR>
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<P>Date:  November 15, 1999</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="CENTER">EXHIBITS TO</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">FORM 10-Q</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">for the quarter ended</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">September 30, 1999</P>

<P>Copies of the following documents are filed as exhibits to this report:</P>

<P> </P>
<U><P>No</U>.		<U>Description</U>	</P>
<DIR>
<DIR>

<P>10.1	Second Amendment to Loan and Security Agreement, dated as of September 2, 1999, between Moto Photo, Inc. and The Provident Bank</P>

<P>10.2	First Amendment to Project Agreement, dated as of September 14, 1999, between Fuji Photo Film U.S.A., Inc. and Moto Photo, Inc. </P>

<P>10.3	First Amendment to Master Lease Financing Agreement, dated as of September 14, 1999, between Fuji Photo Film U.S.A., Inc. and Moto Photo, Inc.</P>
</DIR>
</DIR>

<P>27.0		Financial Data Schedule</P>
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