**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**


(Mark
                One)




þ
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      quarterly period ended September 30, 2007





**OR**





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





For
      the
      transition period from ________ to ________





COMMISSION
      FILE NUMBER: 1-7525





**THE
      GOLDFIELD CORPORATION**


*(Exact
      Name of Registrant as Specified in Its Charter)*







**Delaware**
            **88-0031580***(State
                or other Jurisdiction of Incorporation or
                Organization)*
            *(I.R.S.
                Employer Identification No.)*





**1684
      West Hibiscus Blvd., Melbourne, Florida, 32901**


*(Address
      of Principal Executive Offices) (Zip Code)*







**(321)
      724-1700**


*(Registrant’s
      Telephone Number, Including Area Code)*







**Not
      Applicable**


*(Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report)*





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


Yes þ No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):




Large
      accelerated filer o Accelerated
      filer o Non-accelerated
      filer þ





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o No þ





As
      of
      November 5, 2007, 25,451,354 shares of the Registrant’s Common Stock were
      outstanding.










**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**





QUARTERLY
      REPORT ON FORM 10-Q


FOR
      THE
      QUARTER ENDED SEPTEMBER 30, 2007




INDEX





PART
                I. FINANCIAL INFORMATION
            
            
            3Item
                1. Financial Statements
            
            
            3Consolidated
                Balance Sheets
            
            
            3Consolidated
                Statements of Operations
            
            
            4Consolidated
                Statements of Cash Flows
            
            
            5Notes
                to Consolidated Financial Statements
            
            
            6Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            
            
            14Item
                3. Quantitative and Qualitative Disclosures about Market
                Risk.
            
            
            24Item
                4T. Controls and Procedures.
            
            
            25PART
                II. OTHER INFORMATION
            
            
            26Item
                1. Legal Proceedings
            
            
            26Item
                1A. Risk Factors
            
            
            26Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            
            26Item
                6. Exhibits
            
            
            26SIGNATURES
            
            
            27





2




**PART
      I.** **FINANCIAL
      INFORMATION**




**** **Item
      1. Financial Statements**




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CON** **SOLIDATED
      BALANCE SHEETS**


**(Unaudited)**





September 30,
            
            December 31,2007
            
            2006**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            4,134,995
            
            $
            6,801,600Accounts
                receivable and accrued billings
            
            
            4,317,650
            
            
            4,908,511Contracts
                receivable
            
            
            -
            
            
            10,623,909Remediation
                insurance receivable
            
            
            253,049
            
            
            329,888Current
                portion of notes receivable
            
            
            43,675
            
            
            41,453Construction
                inventory
            
            
            30,209
            
            
            216,989Real
                estate inventories
            
            
            10,232,940
            
            
            801,411Costs
                  and estimated earnings in excess ofbillings
                  on uncompleted contracts
            
            
            3,298,477
            
            
            2,358,738Deferred
                income taxes
            
            
            323,705
            
            
            263,400Income
                taxes recoverable
            
            
            766,466
            
            
            309,922Residential
                properties under construction
            
            
            -
            
            
            3,784,165Prepaid
                expenses
            
            
            806,819
            
            
            431,441Other
                current assets
            
            
            27,739
            
            
            17,614Total
                current assets
            
            
            24,235,724
            
            
            30,889,041Property,
                buildings and equipment, at cost, net of depreciation of $14,953,836
                as of
                September 30, 2007 and $13,715,313 as of December 31, 2006
            
            
            10,425,164
            
            
            9,465,378Notes
                receivable, less current portion
            
            
            363,821
            
            
            407,409Deferred
                charges and other assetsLand
                and land development costs
            
            
            710,495
            
            
            710,495Cash
                surrender value of life insurance
            
            
            329,634
            
            
            321,724Other
                assets
            
            
            614,555
            
            
            110,129Total
                deferred charges and other assets
            
            
            1,654,684
            
            
            1,142,348Total
                assets
            
            $
            36,679,393
            
            $
            41,904,176**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Accounts
                payable and accrued liabilities
            
            $
            2,973,529
            
            $
            5,359,893Billings
                in excess of costs and estimated earnings on uncompleted contracts
            
            
            -
            
            
            24,444Notes
                payable
            
            
            7,208,453
            
            
            8,663,768Capital
                leases, due within one year
            
            
            321,233
            
            
            317,160Current
                liabilities of discontinued operations
            
            
            112,813
            
            
            208,221Total
                current liabilities
            
            
            10,616,028
            
            
            14,573,486Deferred
                income taxes
            
            
            412,165
            
            
            861,400Other
                accrued liabilities
            
            
            25,654
            
            
            20,821Notes
                payable, less current portion
            
            
            2,363,776
            
            
            1,207,745Capital
                leases, less current portion
            
            
            655,415
            
            
            894,976Total
                liabilities
            
            
            14,073,038
            
            
            17,558,428Commitments
                and contingenciesStockholders'
                equity:Preferred
                stock, $1 par value per share, 5,000,000 shares authorized, none
                issued
            
            
            -
            
            
            -Common
                stock, $.10 par value per share, 40,000,000 shares authorized; 27,813,772
                shares issued and 25,451,354 shares outstanding
            
            
            2,781,377
            
            
            2,781,377Capital
                surplus
            
            
            18,481,683
            
            
            18,481,683Retained
                earnings
            
            
            2,651,482
            
            
            4,390,875Treasury
                stock, 2,362,418 shares, at cost
            
            
            (1,308,187
            )
            
            (1,308,187
            )Total
                stockholders' equity
            
            
            22,606,355
            
            
            24,345,748Total
                liabilities and stockholders' equity
            
            $
            36,679,393
            
            $
            41,904,176





See
      accompanying notes to consolidated financial statements





3


**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(Unaudited)**





Three Months Ended
            
            Nine Months EndedSeptember 30,
            
            September 30,2007
            
            2006
            
            2007
            
            2006RevenueElectrical
                construction
            
            $
            6,518,999
            
            $
            8,903,823
            
            $
            20,531,121
            
            $
            30,582,150Real
                estate development
            
            
            41,042
            
            
            3,244,927
            
            
            (2,807,828
            )
            
            7,794,414Total
                revenue
            
            
            6,560,041
            
            
            12,148,750
            
            
            17,723,293
            
            
            38,376,564Costs
                and expensesElectrical
                construction
            
            
            5,496,723
            
            
            7,189,242
            
            
            17,244,833
            
            
            23,772,776Real
                estate development
            
            
            46,293
            
            
            2,187,300
            
            
            (1,729,933
            )
            
            5,336,218Selling,
                general and administrative
            
            
            841,222
            
            
            965,393
            
            
            2,498,556
            
            
            2,883,523Depreciation
            
            
            757,846
            
            
            607,185
            
            
            2,265,963
            
            
            1,834,595Write
                down of inventory
            
            
            473,227
            
            
            -
            
            
            473,227
            
            
            -(Gain)
                loss on sale of assets
            
            
            (6,927
            )
            
            4,439
            
            
            (17,220
            )
            
            (24,884
            )Total
                costs and expenses
            
            
            7,608,384
            
            
            10,953,559
            
            
            20,735,426
            
            
            33,802,228Total
                operating income (loss)
            
            
            (1,048,343
            )
            
            1,195,191
            
            
            (3,012,133
            )
            
            4,574,336Other
                income (expense), netInterest
                income
            
            
            53,779
            
            
            90,525
            
            
            166,664
            
            
            142,210Interest
                expense, net of amount capitalized
            
            
            (235,381
            )
            
            (61,430
            )
            
            (414,085
            )
            
            (161,386
            )Other
            
            
            515,282
            
            
            19,683
            
            
            577,795
            
            
            133,304Total
                other income (expense), net
            
            
            333,680
            
            
            48,778
            
            
            330,374
            
            
            114,128Income
                (loss) from continuing operations before income taxes
            
            
            (714,663
            )
            
            1,243,969
            
            
            (2,681,759
            )
            
            4,688,464Income
                tax expense (benefit)
            
            
            (456,444
            )
            
            479,434
            
            
            (955,027
            )
            
            1,806,967Income
                (loss) from continuing operations
            
            
            (258,219
            )
            
            764,535
            
            
            (1,726,732
            )
            
            2,881,497Gain
                (loss) from discontinued operations, net of tax
            
            
            (12,661
            )
            
            148,637
            
            
            (12,661
            )
            
            148,637Net
                income (loss)
            
            $
            (270,880
            )
            $
            913,172
            
            $
            (1,739,393
            )
            $
            3,030,134Earnings
                (loss) per share of common stock - basic and dilutedContinuing
                operations
            
            $
            (0.01
            )
            $
            0.03
            
            $
            (0.07
            )
            $
            0.11Discontinued
                operations
            
            
            -
            
            
            0.01
            
            
            -
            
            
            0.01Net
                income (loss)
            
            $
            (0.01
            )
            $
            0.04
            
            $
            (0.07
            )
            $
            0.12Weighted
                average number of common shares outstanding –
                basic and
                diluted
            
            
            25,451,354
            
            
            25,572,159
            
            
            25,451,354
            
            
            25,572,181





See
      accompanying notes to consolidated financial statements





4




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)**





Nine
                Months EndedSeptember
                30,2007
            
            2006Cash
                flows from operating activities:Net
                income (loss) from continuing operations
            
            $
            (1,726,732
            )
            $
            2,881,497Adjustments
                to reconcile net income (loss) to net cash provided by operating
                activities:Depreciation
            
            
            2,265,963
            
            
            1,834,595Write
                down of inventory
            
            
            473,227
            
            
            -Gain
                on sale of assets
            
            
            (17,220
            )
            
            (24,884
            )Deferred
                income taxes
            
            
            (509,540
            )
            
            528,446Changes
                in operating assets and liabilitiesAccounts
                receivable and accrued billings
            
            
            590,861
            
            
            1,825,708Contracts
                receivable
            
            
            10,623,909
            
            
            3,196,986Construction
                inventory
            
            
            186,780
            
            
            (293,319
            )Real
                estate inventories
            
            
            (9,904,756
            )
            
            (801,411
            )Costs
                and estimated earnings in excess of billings on uncompleted
                contracts
            
            
            (939,739
            )
            
            (1,142,161
            )Land
                and land development costs
            
            
            -
            
            
            1,076,582Residential
                properties under construction
            
            
            3,784,165
            
            
            (2,416,294
            )Income
                taxes recoverable
            
            
            (456,544
            )
            
            951Income
                taxes payable
            
            
            -
            
            
            122,188Prepaid
                expenses and other assets
            
            
            (889,929
            )
            
            (594,906
            )Accounts
                payable and accrued liabilities
            
            
            (2,381,531
            )
            
            810,018Billings
                in excess of costs and estimated earnings on uncompleted
                contracts
            
            
            (24,444
            )
            
            (51,575
            )Net
                cash provided by operating activities of continuing
                operations
            
            
            1,074,470
            
            
            6,952,421Net
                cash provided by (used by) operating activities of discontinued
                operations
            
            
            (31,230
            )
            
            81,940Net
                cash provided by operating activities
            
            
            1,043,240
            
            
            7,034,361Cash
                flows from investing activities:Proceeds
                from the disposal of property and equipment
            
            
            118,481
            
            
            250,652Proceeds
                from notes receivable
            
            
            41,366
            
            
            55,826Purchases
                of property and equipment
            
            
            (3,327,010
            )
            
            (1,859,092
            )Cash
                surrender value of life insurance
            
            
            (7,910
            )
            
            13,663Net
                cash used by investing activities of continuing operations
            
            
            (3,175,073
            )
            
            (1,538,951
            )Cash
                flows from financing activities:Proceeds
                from notes payable
            
            
            7,682,028
            
            
            6,750,319Repayments
                on notes payable
            
            
            (7,981,312
            )
            
            (5,649,998
            )Repayments
                on capital leases
            
            
            (235,488
            )
            
            (116,041
            )Purchase
                of treasury stock
            
            
            -
            
            
            (126
            )Net
                cash provided by (used by) financing activities of continuing
                operations
            
            
            (534,772
            )
            
            984,154Net
                change in cash and cash equivalents
            
            
            (2,666,605
            )
            
            6,479,564Cash
                and cash equivalents, beginning of period
            
            
            6,801,600
            
            
            2,912,494Cash
                and cash equivalents, end of period
            
            $
            4,134,995
            
            $
            9,392,058Supplemental
                disclosures:Cash
                paid for interest, net of amounts capitalized
            
            $
            403,296
            
            $
            144,882Cash
                paid for income taxes
            
            
            3,418
            
            
            1,245,060Non-cash
                investing and financing activities:Capital
                leases for equipment
            
            
            -
            
            
            1,403,602





See
      accompanying notes to consolidated financial statements





5


**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30, 2007 and 2006**




**Note
      1 –** **Description
      of Business and Basis of Financial Statement Presentation**




***Overview***




The
      Goldfield Corporation (the “Company”) was incorporated in Wyoming in 1906 and
      subsequently reincorporated in Delaware in 1968. The Company's principal lines
      of business are electrical construction and real estate development. The
      principal market for the Company's electrical construction operation is electric
      utilities in the southeastern and mid-Atlantic region of the United States.
      The
      primary focus of the Company's real estate operations is on the development
      of
      luxury condominium projects on the east coast of Florida.




***Basis
      of Presentation***




In
      the
      opinion of management, the accompanying unaudited interim consolidated financial
      statements include all adjustments necessary to present fairly the Company’s
      financial position, results of operations and changes in cash flows for the
      interim periods reported. These adjustments are of a normal recurring nature.
      All financial statements presented herein are unaudited. The consolidated
      balance sheet as of December 31, 2006, is derived from the audited consolidated
      financial statements. The results of operations for the interim periods shown
      in
      this report are not necessarily indicative of results to be expected for the
      fiscal year. These statements should be read in conjunction with the financial statements included
      in the Company’s annual report on Form 10-K for the year ended December 31,
      2006.




***Use
      of Estimates***




Generally
      accepted accounting principles require management to make estimates and
      assumptions during the preparation of the Company’s financial statements and
      accompanying notes. Such estimates and assumptions could change in the future
      as
      more information becomes available, which in turn could impact the amounts
      reported and disclosed herein.




***Recent
      Accounting Pronouncements***




In
      November 2006, the Emerging Issues Task Force (“EITF”) reached a consensus on
      EITF Issue No. 06-8, “Applicability of the Assessment of a Buyer’s Continuing
      Investment under SFAS No. 66, “Accounting for Sales of Real Estate,” for Sales
      of Condominiums.” EITF No. 06-8 will require condominium sales to meet the
      continuing involvement criterion of SFAS No. 66 in order for profit to be
      recognized under the percentage of completion method. EITF No. 06-8 will be
      effective for annual reporting periods beginning after March 15, 2007 (fiscal
      year 2008 for the Company). This consensus could require that additional
      deposits be collected by developers of condominium projects that wish to
      recognize profit during the construction period under the
      percentage-of-completion method. The cumulative effect of applying EITF No.
      06-8, if any, is to be reported as an adjustment to the opening balance of
      retained earnings in the year of adoption. The Company is currently evaluating
      the potential impact of adopting EITF No. 06-8 on its consolidated financial
      position and results of operations. If the Company is unable to meet the
      requirements of EITF No. 06-8, it will be required to delay revenue recognition
      until the aggregate investment tests described in SFAS No. 66 and EITF No.
      06-8
      have been met.




In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value
      Measurement.” SFAS No. 157 defines fair value, establishes a framework for
      measuring fair value, and expands disclosures about fair value measurements.
      SFAS No. 157 is effective for financial statements issued for fiscal years
      beginning after November 15, 2007, and interim periods within those fiscal
      years. The Company is currently evaluating the impact of SFAS No. 157 on its
      consolidated financial position and results of operations.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities - Including an Amendment of FASB
      Statement No. 115” which is effective for fiscal years beginning after November
      15, 2007. SFAS No. 159 permits entities to choose to measure many financial
      instruments and certain other items at fair value. The objective is to improve
      financial reporting by providing entities with the opportunity to mitigate
      volatility in reported earnings caused by measuring related assets and
      liabilities differently without having to apply complex hedge accounting
      provisions. SFAS No. 159 is expected to expand the use of fair value
      measurement, which is consistent with the long-term measurement objectives
      for
      accounting for financial instruments. The Company is currently evaluating the
      potential impact of SFAS No. 159 on its consolidated financial position and
      results of operations.




6




***Rec*** **lassifications**




Certain
      amounts previously reflected in the prior period statement of cash flows have
      been reclassified to conform to the Company’s 2007 presentation. The cash flows
      from financing activities previously included net borrowings (repayments) under
      lines of credit, but after additional review, management determined that all
      debt should be disclosed on a gross basis and the proceeds and repayments have
      been included in proceeds from notes payable or repayments of notes payable,
      respectively. This reclassification had no effect on the previously reported
      total cash flows from financing activities.




**Note** **2
      – Contracts Receivable**




Contracts
      receivable represents the amount of revenue recognized in the real estate
      segment using the percentage-of-completion method for condominium units under
      firm contract. As of September 30, 2007, outstanding contracts receivable
      amounted to $0. As of December 31, 2006, outstanding contracts receivable
      amounted to $10.6 million, all of which related to the Pineapple House project.
      For the nine months ended September 30, 2007, a total of thirteen customers
      defaulted on their contractual obligation to close the purchase of individual
      condominium units. As of September 30, 2007 and December 31, 2006, $157,000
      and
      $1.5 million, respectively, of non-refundable earnest money deposits were held
      by a third party for the Pineapple House project. Subsequent to September 30,
      2007, the Company entered into contracts for the sale of five condominium units
      at the Pineapple House project, for an aggregate purchase price of $2.3
      million.




The
      Company’s real estate development operations do not extend financing to buyers
      and, therefore, sales proceeds are received in full upon closing.




**Note** **3
      – Inventory**




Construction
      inventory, which consists of condominium construction materials or electrical
      construction materials, is stated at the lower of cost or market. As of
      September 30, 2007, all construction inventory consists of electrical
      construction materials. As of December 31, 2006, all construction inventory
      consists of condominium construction materials.




Real
      estate inventories, which consist of completed condominium units held for sale,
      are carried at the lower of cost or fair value, less cost to sell. The Company
      had three completed condominium units held for sale within the Oak Park project
      at September 30, 2007 compared to four at December 31, 2006. In addition, as
      of
      September 30, 2007, the Company has completed the Pineapple House project and
      has 24 completed condominium units held for sale within the Pineapple House
      project compared to none at December 31, 2006.




In
      accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
      Long-Lived Assets,” real estate inventories considered held for sale, are
      reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying value may not be recoverable. If the carrying amount or basis
      is not expected to be recovered, impairment losses are recorded and the related
      assets are adjusted to their estimated fair value. Due to the continued
      deterioration in the national and local housing market, management determined
      in
      September that it was necessary to reduce the selling prices for the remaining
      Pineapple House condominium units, which resulted in an adjustment to the
      carrying value of these units. For the three and nine months ended September
      30,
      2007, the Company recorded a write down of $473,000 related to the Pineapple
      House condominium units held for sale.




**Note** **4
      – Discontinued Operations**




On
      December 4, 2002, effective November 30, 2002, the Company completed the sale
      of
      the capital stock of its mining subsidiaries.




***Commitments
      and Contingencies Related to Discontinued Operations***




On
      September 8, 2003, the United States Environmental Protection Agency (the “EPA”)
      issued a special notice letter notifying the Company that it is a potentially
      responsible party (“PRP”), along with three other parties, with respect to
      investigation and removal activities at the Anderson-Calhoun Mine/Mill Site
      (the
“Site”) in Stevens County, Washington.




7




The
      Company sold the Site property in 1964. The Company has investigated the
      historic operations that occurred at the Site as well as the nature and scope
      of
      environmental conditions at the Site that may present concerns to the EPA.
      Based
      upon its investigation to date, the Company has determined that its operations
      at the Site were primarily exploratory and that the Company never engaged in
      any
      milling or other processing activities at the Site. The Company’s records
      reflect that between the years 1950 and 1952 it extracted a limited amount
      (111,670 tons) of surface ore from the Site for off-site processing. The Site
      has changed owners several times since it was sold by the Company, and the
      Company believes that a substantial majority of the mining activities and all
      of
      the milling and related processing and process waste disposal activities likely
      were conducted by subsequent owners.




In
      April
      of 2007, the EPA approved as final an Engineering Evaluation/Cost Analysis
      Report (“EE/CA Report”) for the Site. The EE/CA Report proposes to adopt as the
      preferred remedy a removal action primarily focused on addressing ore processing
      areas and wastes that were created after the Company sold the Site. The EPA
      held
      a public comment period for the proposed removal action for the Site, from
      June
      26, 2007 through July 26, 2007, and has indicated that it received no
      substantive public comments on the proposed plan. The agency is still working
      on
      releasing a final Action Memorandum that will most likely adopt, as the remedy
      for the Site, the proposed removal action described in the EE/CA
      Report.




The
      EE/CA
      Report, following cost estimation procedures applicable to EE/CA documents,
      estimates that the net present value of the proposed removal action is $1.5
      million. This figure includes amounts for contingencies and is based on
      currently available information, certain assumptions and estimates. In light
      of
      the Company’s limited role in the creation of the wastes that are the primary
      focus of the removal action, the Company believes that the other two PRPs,
      particularly Blue Tee Corporation (successor to American Zinc), will be liable
      for most of the cleanup costs, as they were directly responsible for all on-site
      ore processing activities and wastes. However, there can be no assurance as
      to
      the scope of the Company’s share of liability for cleanup costs. It is expected
      that response actions at the Site will be completed during the 2008 construction
      season.




Under
      the
      Comprehensive Environmental Response, Compensation and Liability Act, any of
      the
      PRPs may be jointly and severally liable to the EPA for the full amount of
      any
      response costs incurred by the EPA, including costs related to investigation
      and
      remediation, subject to a right of contribution from other PRPs. In practice,
      PRPs generally agree to perform such response activities, and negotiate among
      themselves to determine their respective contributions to any such multi-party
      activities based upon equitable allocation factors that focus primarily on
      their
      respective contributions to the contamination at issue.




It
      is
      impossible at this stage to estimate the total costs of the remediation at
      the
      Site or the Company’s share of liability for those costs due to various factors,
      including incomplete information regarding the Site and the other PRPs,
      uncertainty regarding the extent of actual remediation costs and the Company’s
      equitable share of liability for the contamination.




One
      of
      the Company’s former general liability insurance carriers (“Insurer No. 1”) has
      accepted the defense of this matter and has agreed to pay an 80% share of costs
      of defense incurred to date, subject to certain reservation of rights as to
      coverage. As of December 31, 2006, the Company recorded a receivable for
      estimated future insurance reimbursements in the amount of $330,000 and recorded
      this as a reduction to net expense within discontinued operations. During the
      nine months ended September 30, 2007, the Company was reimbursed $57,000, which
      reduced the balance of the estimated receivable for future insurance
      reimbursements. In addition to the amount received in the current nine months,
      the Company received $238,000 during the year ended December 31, 2006, for
      a
      total reimbursement to date of $295,000, which represents 80% of the Company’s
      insurable costs incurred from the inception of this matter through November
      30,
      2006. During the month of October 2007 the Company received a payment of $64,000
      for a total reimbursement to date of $359,000 received from Insurer No. 1,
      which
      represents 80% of the Company’s insurable costs incurred from the inception of
      this matter through July 31, 2007. Another of the Company’s former general
      liability insurance carriers (“Insurer No. 2”) has also accepted the defense of
      this matter, subject to certain reservation of rights as to coverage, and has
      agreed to pay a 20% share of the costs of defense incurred to date. Subsequent
      to September 30, 2007, the Company has received payments of $76,000 from Insurer
      No. 2. In addition, a reduction of $20,000 was recorded during the quarter
      ended
      September 30, 2007 in the amount expected to be reimbursed by Insurer No. 2.
      This amount was recorded as an increase to the net expense within discontinued
      operations. The Company will record any change to the estimated insurance
      reimbursements as a change to the net expense within discontinued operations.
      The Company cannot predict the extent to which its costs will ultimately be
      covered by insurance.




8




Beginning
      in September 2003, in accordance with FASB Interpretation (“FIN”) No. 14,
“Reasonable Estimation of the Amount of a Loss **–** an
      Interpretation of Statement of Financial Accounting Standards No. 5 (Accounting
      for Contingencies),” and Statement of Position No. 96-1, “Environmental
      Remediation Liabilities,” the Company has recognized a net expense (within
      discontinued operations) for this matter. As of September 30, 2007, the
      cumulative net expense was $52,000. This represents the current estimate of
      the
      Company’s share of the costs associated with both an emergency removal action
      previously undertaken by the EPA and actual remediation costs, the professional
      fees associated with the EE/CA Report and the associated
      future professional fees through the completed remediation, all
      reduced by both actual and estimated insurance recoveries. Total actual costs
      to
      be incurred at the Site in future periods may vary from this estimate, given
      inherent uncertainties in evaluating environmental costs. As of September 30,
      2007, the Company has recorded a reserve balance for future applicable costs
      of
      approximately $113,000 (accrued as a current liability within discontinued
      operations). The accrual will be reviewed periodically based upon facts and
      circumstances available at the time, which could result in changes to its
      amount.




Assets
      and liabilities of the discontinued operations have been reflected in the
      accompanying consolidated balance sheets as follows:




September
                30,
            
            December
                31,2007
            
            2006Current
                assetsRemediation
                insurance receivable
            
            $
            253,049
            
            $
            329,888Total
                assets of discontinued operations
            
            $
            253,049
            
            $
            329,888Current
                liabilitiesReserve
                for remediation
            
            $
            112,813
            
            $
            208,221Total
                liabilities of discontinued operations
            
            $
            112,813
            
            $
            208,221




The
      following table sets forth certain unaudited operating results of the
      discontinued operations for the three and nine months ended September 30 as
      indicated:




2007
            
            2006Provision
                for remediation
            
            $
            20,300
            
            $
            -Gain
                (loss) from discontinued operations, before income taxes
            
            
            (20,300
            )
            
            238,315Income
                tax expense (benefit)
            
            
            (7,639
            )
            
            89,678Gain
                (loss) from discontinued operations, net of tax
            
            $
            (12,661
            )
            $
            148,637




**Note** **5
      – Notes Payable**




As
      of
      September 30, 2007, the Company, the Company’s wholly owned subsidiaries,
      Southeast Power Corporation (“Southeast Power”), Bayswater Development
      Corporation (“Bayswater”), Pineapple House of Brevard, Inc. (“Pineapple House”)
      and Oak Park of Brevard, Inc. (“Oak Park”) have three loan agreements and a
      series of related ancillary agreements with Branch Banking and Trust Company
      (the “Bank”) providing for: (1) a revolving line of credit loan for a maximum
      principal amount of $3.0 million, to be used as a “Working Capital Loan,” (2) a
      revolving line of credit loan for a maximum principal amount of $2.0 million
      to
      be used as an “Equipment Loan” and (3) a revolving line of credit for a maximum
      principal amount of $6.0 million to be used as a “Real Estate Loan.” The Working
      Capital Loan was renewed on September 27, 2007, on the existing terms and is
      now
      due and payable on November 26,
      2008,
      unless extended by the Bank at its discretion .
      In
      addition, t he
      Bank
      extended the existing Real Estate Loan from August 26, 2007 until November
      26,
      2007, on the existing terms. The Company has determined that it will not renew
      the Real Estate Loan. As
      of
      September 30, 2007 and December 31, 2006, there
      were no borrowings outstanding under the Working Capital Loan or the Real Estate
      Loan.




Borrowings
      outstanding under the Equipment Loan were $0 and $650,000 as of September 30,
      2007 and December 31, 2006, respectively. Principal plus interest are payable
      monthly composed of $72,222 principal plus accrued interest. The interest is
      payable at an annual rate equal to monthly LIBOR rate plus one and eight-tenths
      percent (6.92% and 7.15% as of September 30, 2007 and December 31, 2006,
      respectively). The maturity date of the Equipment Loan is February 26, 2008
      and
      it is secured by the equipment purchased with the proceeds of the loan, and
      any
      replacements, accessions or substitutions thereof and all cash and non-cash
      proceeds received thereof.




9




As
      of
      September 30, 2007, The Company’s wholly owned subsidiaries, Southeast Power,
      Bayswater, Pineapple House and Oak Park, and the Bank are parties to a loan
      agreement for a revolving line of credit loan for a maximum principal amount
      of
      $14.0 million to be used by Pineapple House to fund the construction of
      residential condominium units (the “Pineapple House Mortgage”). Interest is
      payable monthly at an annual rate equal to the monthly LIBOR rate plus one
      and
      eighty-five one-hundredths percent (6.97%
      and 7.20% as of September 30, 2007 and December 31, 2006, respectively). The
      maturity date of the Pineapple House Mortgage was November 18, 2007. However,
      on
      September 27, 2007, the Company and the Bank entered into a loan renewal and
      modification, pursuant to which the Pineapple House Mortgage will mature and
      all
      amounts due thereunder will be due and payable in full on November 18, 2008,
      unless extended by the Bank at its discretion. At the Bank’s option, the loan
      may be extended for two eighteen-month periods upon payment of a fee to the
      Bank
      in connection with each extension. These extensions do not necessarily provide
      for future advances, but solely for extension and preservation of the commitment
      related to the construction of a second and third building on the Pineapple
      House site. Borrowings outstanding under this agreement were $6.3 million and
      $7.8 million as of September 30, 2007 and December 31, 2006, respectively.
      The
      loan is secured by a Mortgage and Security Agreement.




As
      of
      September 30, 2007 and December 31, 2006, the Company, the Company’s wholly
      owned subsidiary, Southeast Power, and the Bank, had a loan agreement for a
      revolving line of credit loan for a maximum principal amount of $3.5 million
      to
      be used by Southeast Power for durable equipment purchases. The Company agreed
      to guarantee Southeast Power’s obligations under the loan agreement. Interest is
      payable monthly at an annual rate equal to the monthly LIBOR rate plus one
      and
      eight-tenths percent (6.92% as of September 30, 2007 and 7.15% as of December
      31, 2006, respectively). The maturity date of the loan is December 13, 2010.
      Southeast Power made monthly payments of interest to the Bank in arrears on
      the
      principal balance outstanding until July 2007, and thereafter, Southeast Power
      pays monthly installments of principal, in addition to interest on the principal
      balance outstanding, until maturity. Borrowings outstanding under this loan
      agreement were $3.3 million and $1.4 million as of September 30, 2007 and
      December 31, 2006, respectively. The loan is secured by the grant of a
      continuing security interest in all equipment purchased with the proceeds of
      the
      loan, and any replacements, accessions, or substitutions thereof and all cash
      and non-cash proceeds thereof.




The
      Company’s debt arrangements contain various financial and other covenants, all
      of which the Company was in compliance with as of September 30, 2007.




Interest
      costs related to the construction of condominiums are capitalized. During the
      three month periods ended September 30, 2007 and 2006, the Company capitalized
      interest costs of $0 and $79,000, respectively. During the nine month periods
      ended September 30, 2007 and 2006, the Company capitalized interest costs of
      $384,000 and $218,000, respectively.




**Note** **6
      – Commitments and Contingencies**




In
      certain circumstances, the Company is required to provide performance bonds
      to
      secure its contractual commitments. Management is not aware of any performance
      bonds issued for the Company that have ever been called by a customer. As of
      September 30, 2007, outstanding performance bonds issued on behalf of the
      Company’s electrical construction subsidiary amounted to approximately $22.7
      million.




**Note** **7
      – Income Taxes**




At
      September 30, 2007, the Company had alternative minimum tax (“AMT”) credit
      carryforwards of approximately $512,000, which are available to reduce future
      federal income taxes over an indefinite period. The
      net
      deferred tax asset increased from $263,000 at December 31, 2006 to $324,000
      at
      September 30, 2007 primarily due to an inventory adjustment. The
      net
      deferred tax liability decreased from $861,000 at December 31, 2006 to $412,000
      at September 30, 2007 primarily due to the reclassification of AMT credit
      carryforwards from current to noncurrent. The minimum amount of future taxable
      income required to be generated to fully realize the deferred tax assets at
      the
      Company’s expected tax rate for the year ending December 31, 2007 is
      approximately $2.9 million.




The
      following table presents our provision for income tax and effective income
      tax
      rate from continuing operations for the periods as indicated:




Three Months Ended
            
            Nine Months EndedSeptember
                30,
            
            September
                30,2007
            
            2006
            
            2007
            
            2006Income
                tax expense (benefit)
            
            $
            (456,444
            )
            $
            479,434
            
            $
            (955,027
            )
            $
            1,806,967Effective
                income tax rate
            
            
            (63.9
            %)
            
            38.5
            %
            
            (35.6
            %)
            
            38.5
            %





10




The
      Company’s expected tax rate for the year ending December 31, 2007, which was
      calculated based on the estimated annual operating results for the year, is
      (35.3%). **** The
      Company’s expected tax rate for the year ending December 31, 2007 at September
      30, 2007 changed from the first six months of 2007 due to a re-evaluation of
      estimated annual operating results. Therefore, the effective tax rate of (63.9%)
      differs from the federal statutory rate of 34% for the three months ended
      September 30, 2007 due to the significant impact of this re-evaluation of the
      estimated annual operating results for the year ending December 31, 2007. The
      effective tax rate differs from the federal statutory rate of 34% for the nine
      months ended September 30, 2007 primarily due to state income
      taxes.




On
      January 1, 2007, the Company adopted FIN No. 48 “Accounting for Uncertainty in
      Income Taxes - an Interpretation of SFAS No. 109,” which clarifies the
      accounting and reporting for uncertainties in income tax law. This
      Interpretation prescribes a comprehensive model for the financial statement
      recognition, measurement, presentation and disclosure of uncertain tax positions
      taken or expected to be taken in income tax returns. FIN No. 48 prescribes
      a
      more-likely-than-not threshold of a tax position taken or expected to be taken
      in a tax return being sustained on audit based on the technical merits for
      financial statement recognition and measurement.




On
      implementation of FIN No. 48, the Company reviewed prior year tax filings and
      other corporate records for any uncertain tax positions in accordance with
      recognition standards established, for which the statute of limitations remained
      open. The Company’s federal statute of limitation has expired for years prior to
      2004 and relevant state statutes vary. As a result of this review, the Company
      determined there were no significant amounts previously recorded and it was
      not required to accrue additional income taxes .
      The
      Company is currently not under any tax audits or examinations and does not
      expect the assessment of any significant additional tax in excess of amounts
      reserved.




The
      Company will classify interest and penalties recognized in accordance with
      this
      Interpretation as interest expense and other general and administrative
      expenses, respectively, and not as a component of income taxes.




**Note** **8
      – Earnings (Loss) Per Share of Common Stock and Stock Repurchase
      Plan**




Basic
      earnings (loss) per common share is computed by dividing net income by the
      weighted average number of shares of common stock outstanding during the period.
      Diluted earnings per share include dilution from potential common stock
      equivalents, such as stock options outstanding. As of September 30, 2007 and
      December 31, 2006, respectively, there were no common stock
      equivalents.




Since
      September 17, 2002, the Company has had a stock repurchase plan which, as last
      amended by the Board of Directors on May 31, 2007, permits the purchase of
      up to
      3,500,000 shares of Common Stock until September 30, 2008. The Company may
      repurchase its shares either in the open market or through private transactions.
      The volume of the shares to be repurchased is contingent upon market conditions
      and other factors. During each of the years ended December 31, 2006, 2005 and
      2004, pursuant to the Repurchase Plan, the Company repurchased 120,838, 379,058
      and 489,195 shares of its Common Stock, respectively, at a cost of $132,953
      (average cost of $1.10 per share), $209,179 (average cost of $0.55 per share)
      and $271,390 (average cost of $0.55 per share), respectively. The Company did
      not repurchase shares of its Common Stock during the nine month period ended
      September 30, 2007. During the three month period ended September 30, 2006,
      the
      Company repurchased 100 shares of its common stock at a cost of $126 (average
      cost of $1.26 per share). As of September 30, 2007, the total number of shares
      repurchased under the Repurchase Plan was 2,345,060 at a cost of $1,289,467
      (average cost of $0.55 per share) and the remaining number of shares available
      to be repurchased under the Repurchase Plan is 1,154,940. The Company currently
      holds the repurchased stock as Treasury Stock, reported at cost. Prior to
      September 17, 2002, the Company had 17,358 shares of Treasury Stock, which
      it
      had purchased at a cost of $18,720.




**Note** **9
      – Business Segment Information**




The
      Company is currently involved in two segments, electrical construction and
      real
      estate development. There were no material amounts of sales or transfers between
      segments and no material amounts of foreign sales. Any intersegment sales have
      been eliminated.




11




The
      following table sets forth certain segment information for the periods ended
      as
      indicated:




Three Months Ended
            
            Nine Months EndedSeptember 30,
            
            September 30,2007
            
            2006
            
            2007
            
            2006RevenuesElectrical
                construction
            
            $
            6,518,999
            
            $
            8,903,823
            
            $
            20,531,121
            
            $
            30,582,150Real
                estate development
            
            
            41,042
            
            
            3,244,927
            
            
            (2,807,828
            )
            
            7,794,414Total
                revenues
            
            
            6,560,041
            
            
            12,148,750
            
            
            17,723,293
            
            
            38,376,564Operating
                expensesElectrical
                construction
            
            
            6,239,663
            
            
            7,828,546
            
            
            19,567,802
            
            
            25,646,268Real
                estate development
            
            
            675,988
            
            
            2,425,694
            
            
            (1,038,816
            )
            
            5,988,192Corporate
            
            
            692,733
            
            
            699,319
            
            
            2,206,440
            
            
            2,167,768Total
                operating expenses
            
            
            7,608,384
            
            
            10,953,559
            
            
            20,735,426
            
            
            33,802,228Operating
                income (loss)Electrical
                construction
            
            
            279,336
            
            
            1,075,277
            
            
            963,319
            
            
            4,935,882Real
                estate development
            
            
            (634,946
            )
            
            819,233
            
            
            (1,769,012
            )
            
            1,806,222Corporate
            
            
            (692,733
            )
            
            (699,319
            )
            
            (2,206,440
            )
            
            (2,167,768
            )Total
                operating income (loss)
            
            
            (1,048,343
            )
            
            1,195,191
            
            
            (3,012,133
            )
            
            4,574,336Other
                income (expense), netElectrical
                construction
            
            
            (63,079
            )
            
            (2,855
            )
            
            (181,337
            )
            
            (46,619
            )Real
                estate development
            
            
            370,634
            
            
            18,155
            
            
            424,624
            
            
            124,037Corporate
            
            
            26,125
            
            
            33,478
            
            
            87,087
            
            
            36,710Total
                other income (expense), net
            
            
            333,680
            
            
            48,778
            
            
            330,374
            
            
            114,128Net
                income (loss) before taxesElectrical
                construction
            
            
            216,257
            
            
            1,072,422
            
            
            781,982
            
            
            4,889,263Real
                estate development
            
            
            (264,312
            )
            
            837,388
            
            
            (1,344,388
            )
            
            1,930,259Corporate
            
            
            (666,608
            )
            
            (665,841
            )
            
            (2,119,353
            )
            
            (2,131,058
            )Total
                net income (loss) before taxes
            
            $
            (714,663
            )
            $
            1,243,969
            
            $
            (2,681,759
            )
            $
            4,688,464




Operating
      income (loss) is total operating revenue less operating expenses inclusive
      of
      depreciation and amortization, and selling, general and administrative expenses
      for each segment. Operating income (loss) excludes interest expense, interest
      income and income taxes. Corporate expenses are comprised of general and
      administrative expenses and corporate depreciation and amortization expenses.




The
      following table sets forth certain segment information as of the dates
      indicated:




September 30,
            
            December 31,2007
            
            2006Identifiable
                assetsElectrical
                construction
            
            $
            21,076,344
            
            $
            21,317,634Real
                estate development
            
            
            11,425,716
            
            
            16,225,823Corporate
            
            
            3,924,284
            
            
            4,030,831Discontinued
                operations
            
            
            253,049
            
            
            329,888Total
            
            $
            36,679,393
            
            $
            41,904,176




***Electrical
      Construction***




A
      significant portion of the Company’s electrical construction revenue has
      historically been derived from two or three utility customers each year. For
      the
      quarters ended September 30, 2007 and September 30, 2006, the three largest
      customers accounted for 77% and 88%, respectively, of the Company’s electrical
      construction revenue. For the nine months ended September 30, 2007 and September
      30, 2006, the three largest customers accounted for 50% and 88%, respectively,
      of the Company’s electrical construction revenue.




12




***Real
      Estate Development***




During
      the nine months ended September 30, 2007, thirteen customers defaulted or
      provided notification of their intent to default on their contractual
      obligations to close the purchase of their condominium units at the Pineapple
      House project. As a result of these defaults, revenues and operating expenses
      in
      the real estate development segment for the nine months ended September 30,
      2007
      reflect the reversal of previously recognized revenues of $7.2 million and
      previously recognized cost of sales of $5.2 million. The cost of these units
      held for sale is reflected in real estate inventory as of September 30, 2007.
      In
      addition, due to the continued deterioration in the national and local housing
      market, management determined in September that it was necessary to reduce
      the
      selling prices for the remaining Pineapple House condominium units, which
      necessitated an adjustment in the carrying value of these units. For the three
      and nine months ended September 30, 2007, the Company recorded a write down
      of
      $473,000 related to the Pineapple House condominium units held for
      sale.




13





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




**Forward-Looking
      Statements**




*We
      make “forward-looking statements” within the “safe harbor” provision of the
      Private Securities Litigation* *Reform
      Act of 1995 throughout this document. You can identify these statements by
      forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,”
“estimate,” “plan,” and “continue” or similar words. We have based these
      statements on our current expectations about future events. Although we believe
      that our expectations reflected in or suggested by our forward-looking
      statements are reasonable, we cannot assure you that these expectations will
      be
      achieved. Our actual results may differ materially from what we currently
      expect. Factors that may affect the results of our electrical construction
      operations include, among others: the level of construction activities by public
      utilities; the timing and duration of construction projects for which we are
      engaged; adverse weather; our ability to estimate accurately with respect to
      fixed price construction contracts; heightened competition in the electrical
      construction field, including intensification of price competition; and the
      availability of skilled construction labor. Factors that may affect the results
      of our real estate development operations include, among others: interest rates;
      ability to obtain necessary permits from regulatory agencies; adverse
      legislation or regulations; ability to acquire land; our ability to maintain
      or
      increase historical revenues and profit margins; our ability to collect
      contracts receivable and close homes in backlog, particularly related to buyers
      purchasing homes as investments; availability of labor and materials and
      material increases in labor and material costs; ability to obtain additional
      construction financing; increases in interest rates and availability of mortgage
      financing; increases in construction and homeowner insurance and the
      availability of insurance; the level of consumer confidence; the negative impact
      of claims for contract rescission or cancellation by unit purchasers due to
      various factors including the increase in the cost of condominium insurance;
      adverse weather; natural disasters; changes in generally accepted accounting
      principles; the continued weakness in the Florida condominium market and general
      economic conditions, both nationally and in our region. Other important factors
      which could cause our actual results to differ materially from the
      forward-looking statements in this document include, but are not limited to,
      those discussed in this “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations,” as well as those discussed elsewhere in
      this report and as set forth from time to time in our other public filings
      and
      public statements. In addition to the other information included in this report
      and our other public filings and releases, a discussion of factors affecting
      our
      business is included in our Annual Report on Form 10-K for the year ended
      December 31, 2006 under “Item 1A. Risk Factors” and should be considered while
      evaluating our business, financial condition, results of operations and
      prospects.*




*You
      should read this report completely and with the understanding that our actual
      future results may be materially different from what we expect. We may not
      update these forward-looking statements, even in the event that our situation
      changes in the future. All forward-looking statements attributable to us are
      expressly qualified by these cautionary statements.*




**Overview**




We
      are a
      leading provider of electrical construction services in the southeastern United
      States and a developer of condominiums on the east coast of Florida. Through
      our
      subsidiary, Southeast Power Corporation, we are engaged in the construction
      and
      maintenance of electric utility facilities for electric utilities and industrial
      customers, and the installation of fiber optic cable for fiber optic cable
      manufacturers, telecommunication companies and electric utilities. Southeast
      Power is based in Titusville, Florida, and performs electrical contracting
      services in the southeastern and mid-Atlantic regions of the United
      States.




The
      electrical construction business is highly competitive and fragmented. We
      compete with other independent contractors, including larger regional and
      national firms that may have financial, operational, technical and marketing
      resources that exceed our own. We also face competition from existing and
      prospective customers establishing or augmenting in-house service organizations
      that employ personnel who perform some of the same types of service as those
      provided by us. In addition, a significant portion of our electrical
      construction revenue is derived from a small group of customers, with one or
      two
      different customers accounting for a substantial portion of our revenue in
      any
      given year. For example, in the year ended December 31, 2006, one of our
      customers accounted for greater than 50% of our consolidated revenue. The loss
      of, or decrease in current demand from, one or more of these customers would,
      if
      not replaced by other business, result in a decrease in revenues, margins and
      profits which could be material. During the first nine months of 2007, we were
      less successful in the bidding and awards process, partly due to the number
      of
      jobs awarded to competitors at lower than normal profit margins.




14




As
      we
      look forward to the fourth quarter of 2007 and the first half of 2008, we see
      increased activity in our electrical construction operations as a result of
      a
      new project that we recently have been awarded, as well as the resumption of
      a
      number of previously suspended projects. Pursuant to this project, on which
      work
      has recently commenced, we have been selected to partner with a major utility
      in
      a multi-year project involving the upgrading of 46.2 miles of high voltage
      (230
      kV) transmission line to support load growth in the central Florida
      area.




We
      are
      also involved, through our subsidiary Bayswater Development Corporation and
      its
      wholly-owned real estate development subsidiaries, in the development of
      residential condominium projects, on the east coast of Central Florida. Our
      current project, Pineapple House, is a multi-phase project. The first phase
      of
      Pineapple House is comprised of an eight-story building containing thirty-three
      luxury river-view condominium units. As of December 31, 2006, twenty-two units
      were under contract for sale, backed by $1.5 million of non-refundable earnest
      money deposits. Due to the current weakness in the Florida condominium market,
      as further described below, there was a virtual cessation of sales of our
      condominiums during 2006, which has continued through the nine months ended
      September 30, 2007, during which we have made no additional sales for Pineapple
      House. In May 2007, we received the Certificate of Occupancy for Pineapple
      House
      and notified our contracted buyers to begin consummating the sales of the units.
      Of the twenty-two units under contract for sale we have closed on nine of these
      units. The remaining thirteen buyers have defaulted on their contracts,
      forfeiting deposits, aggregating $722,000. As a result of the defaults on these
      contracts, we have reversed the previously recognized revenues and cost of
      sales
      on these units, resulting in negative revenues and negative cost of goods sold
      for the real estate segment for the nine month period ended September 30, 2007.
      As the market continued to stagnate, we determined in September it was necessary
      to reduce the selling prices for the remaining Pineapple House condominium
      units, which resulted in an adjustment in the carrying value of these units.
      For
      the three and nine months ended September 30, 2007, we recorded a write down
      of
      $473,000 related to the Pineapple House condominium units held for sale. Since
      this reduction in selling prices, we have entered into contracts for sale with
      respect to five units, one of which has already been consummated. We anticipate
      closing the sales of the other four units under contract in the fourth quarter
      of 2007. Since these contracts provide for near term closing, we have
      significantly reduced the level of deposits required from customers in
      connection with these sales. We can provide no assurance that the sales of
      the
      units under contract will be consummated, or that we will be successful in
      selling the remaining units.




We
      believe the defaults on the existing contracts and the continued slowdown in
      new
      unit sales are attributable to the continued deterioration in the national
      housing market, including a softening in demand for new homes and an oversupply
      of homes available for sale in the Florida market. We believe the decline in
      demand for our new condominiums is related to concerns of prospective home
      buyers regarding the direction of home prices, interest rates, property taxes,
      insurance and their inability to sell their current homes. In addition to the
      traditional homebuyer, it appears that speculators and investors have
      significantly reduced their participation in the new home market. Additionally,
      our market has been impacted by an overall increase in the supply of homes
      available for sale, as speculators and investors attempt to sell the homes
      they
      previously purchased or cancel contracts for homes under construction. In
      addition, high cancellation rates reported by other builders have added to
      the
      supply of homes in the marketplace.




Looking
      forward with respect to our real estate development operations, we continue
      to
      see weak, and perhaps deteriorating, market conditions, which may continue
      to
      have an adverse impact on the sales and pricing of our condominium units, the
      settlement of existing contracts, the commencement and development of new
      projects (including a delay in the commencement of the second phase of the
      Pineapple House project) and on the results of our real estate development
      operations. We cannot predict whether the Florida condominium market will
      improve, or when any such improvement may take place. However, we have completed
      the first phase of the Pineapple House project on budget and in a timely manner,
      and we believe the project is attractive and of high quality. At the new reduced
      selling prices, we expect renewed sales activity at the Pineapple House project,
      as has already been evidenced by five sales at the new prices, discussed above.
      Furthermore, we will no longer be incurring construction costs with respect
      to
      this phase and our share of the maintenance costs on the unsold units is
      expected to be no more than $107,000 annually. As of September 27, 2007, we
      renewed our construction loan on substantially similar terms to those previously
      in effect. Even at the new reduced prices, the aggregate net proceeds from
      the
      sales of the remaining units at Pineapple House would be well in excess of
      the
      amounts required to repay our construction loan.




**Critical
      Accounting Estimates**




This
      discussion and analysis of our financial condition and results of operations
      is
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with U.S. generally accepted accounting principles. The preparation
      of these financial statements requires us to make estimates and judgments that
      affect the reported amounts of assets, liabilities, revenues and expenses,
      and
      related disclosure of contingent assets and liabilities. On an on-going basis,
      we evaluate our estimates, including those related to fixed price electrical
      construction contracts, real estate development projects, deferred income tax
      assets and environmental remediation. We base our estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. Our management has
      discussed the selection and development of its critical accounting policies,
      estimates and related disclosure with the Audit Committee of the Board of
      Directors.




15




***Percentage
      of Completion – Electrical
      Construction Segment***




We
      recognize revenue from fixed price contracts on a percentage-of-completion
      basis, using primarily the cost-to-cost method based on the percentage of total
      costs incurred to date in proportion to total estimated costs to complete the
      contract. Total estimated costs, and thus contract income, are impacted by
      several factors including, but not limited to, changes in productivity and
      scheduling, and the cost of labor, subcontracts, materials and equipment.
      Additionally, external factors such as weather, site conditions and scheduling
      that differ from those assumed in the original bid (to the extent contract
      remedies are unavailable), client needs, client delays in providing approvals,
      the availability and skill level of workers in the geographic location of the
      project, a change in the availability and proximity of materials and
      governmental regulation, may also affect the progress and estimated cost of
      a
      project's completion and thus the timing of income and revenue
      recognition.




The
      accuracy of our revenue and profit recognition in a given period is almost
      solely dependent on the accuracy of our estimates of the cost to complete each
      project. Due to our experience and our detailed approach in determining our
      cost
      estimates for all of our significant projects, we believe our estimates to
      be
      highly reliable. However, our projects can be complex and in almost every case
      the profit margin estimates for a project will either increase or decrease
      to
      some extent from the amount that was originally estimated at the time of bid.
      Because we have a number of projects of varying levels of complexity and size
      in
      process at any given time these changes in estimates can offset each other
      without materially impacting our overall profitability. If a current estimate
      of
      total costs indicates a loss on a contract, the projected loss is recognized
      in
      full when determined. Contract loss accruals recorded for the three and the
      nine
      month periods ended September 30, 2007 were $41,000 and $58,000, respectively,
      compared to no contract loss accruals for both the three and nine month periods
      ended September 30, 2006. Revenue from  change
      orders, extra work, variations in the scope of work and claims is recognized
      when realization is probable.




***Percentage
      of Completion – Real Estate Development Segment***




All
      revenue associated with real estate development projects that meet the criteria
      specified by SFAS 66, “Accounting for Sales of Real Estate,” is recognized using
      the percentage-of-completion method. Under this method, revenue is recognized
      when (1) construction is beyond a preliminary stage, (2) a substantial
      percentage (at least one-third) of the condominiums are under firm,
      non-refundable contracts, except in the case of non-delivery of the unit or
      interest, (3) sufficient units have already been sold to assure that the entire
      property will not revert to rental property, consideration is given to the
      requirements of state laws, the condominium contract and the terms of the
      financing agreements, (4) collection of the sales price is reasonably assured,
      (5) deposits equal or exceed 10% of the contract price and (6) sales proceeds
      and costs can be reasonably estimated. The Company determines that construction
      is beyond a preliminary stage when engineering and design work, execution of
      construction contracts, site clearance and preparation, excavation and the
      building foundation is complete. In November 2006, the FASB ratified EITF Issue
      No. 06-8, “Applicability of a Buyer’s Continuing Investment under FASB Statement
      No. 66 for Sales of Condominiums.” EITF Issue 06-8 provides guidance in
      assessing the collectibility of the sales price, which is required in order
      to
      recognize profit under the percentage-of-completion method pursuant to SFAS
      No.
      66. See note 1 to the consolidated financial statements for additional
      information.




We
      believe that a material difference in total actual project costs versus total
      estimated project costs is unlikely due to the nature of the fixed price
      contracts we enter into with the general contractors on our real estate
      projects.




If
      a
      current estimate of total project costs indicates a loss on a project, the
      projected loss is recognized in full when determined. There were no contract
      loss accruals recorded during both the three and nine month periods ended
      September 30, 2007 and September 30, 2006. The timing of revenue and expense
      recognition is contingent on construction productivity. Factors possibly
      impeding construction productivity include, but are not limited to, supply
      of
      labor, materials and equipment, scheduling, weather, permitting and unforeseen
      events.




Upon
      completion of the Pineapple House project in June 2007, the revenue related
      to
      the balance of the units available for sale will be recognized under the full
      accrual method, as the sales are closed.




16




When
      a
      buyer defaults on the contract for sale, revenues and expenses recognized in
      prior periods are adjusted in the period of default. In the nine month period
      ended September 30, 2007, we recorded a reversal in revenues previously
      recognized of $7.2 million and in costs of sales previously recorded of $5.2
      million.




***Deferred
      Tax Assets***




We
      account for income taxes in accordance with SFAS No. 109, “Accounting for Income
      Taxes.” Under this method, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to temporary differences between
      the financial statement carrying amounts of existing assets and liabilities
      and
      their respective tax bases. Deferred tax assets and liabilities are measured
      using enacted tax rates expected to apply to taxable income in the years in
      which those temporary differences are expected to be recovered or settled.
      The
      effect on deferred tax assets and liabilities of a change in tax rates is
      recognized in income in the period that includes the enactment
      date.




We
      consider future taxable income and ongoing prudent and feasible tax planning
      strategies in assessing the need for a valuation allowance for deferred tax
      assets. The ultimate realization of deferred tax assets is dependent upon the
      generation of future taxable income during the periods in which the deferred
      tax
      assets are expected to be recovered or settled. If we determine that we will
      not
      be able to realize all or part of our deferred tax assets, a valuation allowance
      would be recorded to reduce our deferred tax assets to the amount that is more
      likely than not to be realized. In the event we were to subsequently determine
      that we would be able to realize our deferred tax assets in the future in excess
      of our net recorded amount, an adjustment to the previously recorded valuation
      allowance would increase income in the period such determination was
      made.




As
      of
      September 30, 2007, our deferred tax assets were largely comprised of an AMT
      credit carryforward and the inventory adjustment. Based on historical experience
      and assumptions with respect to forecasts of future taxable income and tax
      planning, among others, we anticipate being able to generate sufficient taxable
      income to utilize the AMT credit carryforward which has no expiration date
      and
      the inventory adjustment will be recognized as condominium units are sold.
      Therefore, we have not recorded a valuation allowance against the deferred
      tax
      assets. The minimum amount of future taxable income required to be generated
      to
      fully realize the deferred tax assets at our expected tax rate for the year
      ending December 31, 2007 is approximately $2.9 million.




***Provision
      for Remediation***




In
      September 2003, we were notified by the EPA that we are a PRP with respect
      to
      possible investigation and removal activities at the Site, a mine that we
      formerly owned. Refer to note 4 of the notes to the consolidated financial
      statements for a discussion of this matter.




It
      is
      impossible at this stage to estimate the total costs of the remediation at
      the
      Site or our share of liability for those costs due to various factors, including
      incomplete information regarding the Site and the other PRPs, uncertainty
      regarding the extent of actual remediation costs and our equitable share of
      liability for the contamination.




Beginning
      in September 2003, in accordance with FIN No. 14, we had recognized a net
      expense (within discontinued operations) for this matter. During the nine months
      ended September 30, 2007, a reduction of $20,000 was recorded in the amount
      expected to be reimbursed by one of our former general liability insurance
      carriers. During the nine months ended September 30, 2007, the Company was
      reimbursed $57,000, which reduced the balance of the estimated receivable for
      future insurance reimbursements. During the three months ended September 30,
      2006, the Company was reimbursed $238,000, representing 80% of the Company’s
      insurable costs incurred from the inception of this matter through February
      28,
      2006. As of September 30, 2007, the cumulative net expense was $52,000. This
      represents the current estimate of our share of the costs associated with both
      an emergency removal action previously undertaken by the EPA and actual
      remediation costs, the professional fees associated with the EE/CA Report
      and the associated future professional fees through the
      completed remediation, all reduced by both actual and estimated insurance
      recoveries. Total actual costs to be incurred at the Site in future periods
      may
      vary from this estimate, given inherent uncertainties in evaluating
      environmental costs. As of September 30, 2007, we have recorded a reserve
      balance for future applicable costs of approximately $113,000 (accrued as a
      current liability within discontinued operations). The accrual will be reviewed
      periodically based upon facts and circumstances available at the time, which
      could result in changes to the balance.




17


**Results
      of Operations**




***Nine
      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
      2006***




The
      table
      below is a reconciliation of our operating income attributable to each of our
      segments for the nine months ended September 30 as indicated:




2007
            
            2006Electrical
                constructionRevenue
            
            $
            20,531,121
            
            $
            30,582,150Operating
                expensesCost
                of goods sold
            
            
            17,244,833
            
            
            23,772,776SG&A
            
            
            194,832
            
            
            177,856Depreciation
            
            
            2,138,063
            
            
            1,715,617Gain
                on sale of assets
            
            
            (9,926
            )
            
            (19,981
            )Total
                operating expenses
            
            
            19,567,802
            
            
            25,646,268Operating
                income
            
            $
            963,319
            
            $
            4,935,882Real
                estate developmentRevenue
            
            $
            (2,807,828
            )
            $
            7,794,414Operating
                expensesCost
                of goods sold
            
            
            (1,729,933
            )
            
            5,336,218SG&A
            
            
            199,083
            
            
            633,056Depreciation
            
            
            18,807
            
            
            18,918Write
                down of inventory
            
            
            473,227
            
            
            -Total
                operating expenses
            
            
            (1,038,816
            )
            
            5,988,192Operating
                income (loss)
            
            $
            (1,769,012
            )
            $
            1,806,222




**Revenues**




Total
      revenues in the nine months ended September 30, 2007 decreased by 53.8% to
      $17.7
      million, compared to $38.4 million in the nine months ended September 30, 2006,
      reflecting lower revenue in our electrical construction segment and the reversal
      of previously recognized revenue in our real estate development segment due
      to
      the default on thirteen condominium units.




Electrical
      construction revenues decreased $10.1 million, or 32.9%, to $20.5 million for
      the nine months ended September 30, 2007 from $30.6 million for the nine months
      ended September 30, 2006. The decrease in revenue for the nine months period
      ending September 30, 2007 when compared to the same period in 2006 was primarily
      due to a slowdown in demand for our electrical construction services and a
      reduction in the number of projects in process, resulting from the availability
      of fewer profitable projects. In the current nine months we had fewer projects
      under construction because we have recently been less successful in the bidding
      and awards process, partly due to the number of jobs awarded to competitors
      at
      prices that would not meet our target profit margins.




The
      varying magnitude and duration of electrical construction projects may result
      in
      substantial fluctuation in the Company’s backlog from time to time. Backlog
      represents the uncompleted portion of services to be performed under
      project-specific contracts and the estimated value of future services that
      we
      expect to provide under our existing service agreements, including new
      contractual agreements on which work has not begun. In many instances, our
      customers are not contractually committed to specific volumes of services and
      many of our contracts may be terminated with notice, therefore we do not
      consider any portion of our backlog to be firm. However, our customers become
      obligated once we provide the services they have requested. Our service
      agreements are typically multi-year agreements, and we include in our backlog
      the amount of services projected to be performed over the terms of the contracts
      based on our historical relationships with these customers. Our estimates of
      a
      customer’s requirements during a particular future period may not be accurate at
      any point in time. As of September 30, 2007, the electrical construction
      operation’s backlog was approximately $11.2 million, which included
      approximately $6.9 million from fixed price contracts for which revenue is
      recognized using percentage-of-completion and approximately $4.3 million from
      service agreement contracts for which revenue is recognized as work is
      performed. Of our total backlog, we expect approximately 66% to be completed
      within the current fiscal year. This compares to a backlog of $10.7 million
      at
      September 30, 2006, of which approximately $6.4 million represented backlog
      from
      fixed price contracts and approximately $4.3 million represented backlog from
      service agreement contracts.




18




Real
      estate construction reported net revenues of negative $2.8 million for the
      nine
      months ended September 30, 2007 as compared to $7.8 million for the like period
      in 2006. This decrease was mainly due to the reversal of previously recognized
      revenues on the Pineapple House project upon the notification from buyers of
      their intent to default on their contracts. In the nine months ended September
      30, 2006, we recognized revenue on both the Oak Park project, which was
      completed in the third quarter of 2006 and the Pineapple House project, which
      we
      had begun in the first quarter of 2006. During the nine months ended September
      30, 2007, the only project under construction was Pineapple House.




As
      of
      September 30, 2007 due to the completion of the Pineapple House project there
      was no backlog for the real estate development operation’s segment.




**Operating
      Results**




Total
      operating income (loss) decreased to $(3.0 million) for the nine months ended
      September 30, 2007, compared to $4.6 million for the like period in 2006.
      Electrical construction operations had an operating income of $963,000 during
      the nine months ended September 30, 2007, compared to an operating income of
      $4.9 million during the nine months ended September 30, 2006.




Operating
      margins on electrical construction operations decreased to 4.7% for the nine
      months ended September 30, 2007 from 16.1% for the nine months ended September
      30, 2006. This decrease was largely the result of reduced productivity on
      several jobs due to clients’ transmission line clearance problems, delays in
      procurements of client furnished materials, delays in our clients processing
      permits on a timely basis and related transition costs and lost productivity
      as
      work crews were moved from one job to another due to these customer
      delays.




Real
      estate development operations had an operating loss of $1.8 million in the
      nine
      months ended September 30, 2007, compared to operating income of $1.8 million
      in
      the nine months ended September 30, 2006, a decrease of $3.6 million. This
      loss
      reflects the reversal of revenues and cost of sales due to the default on
      purchase contracts discussed above, as well as the write down of the Pineapple
      House inventory to estimated fair value.




**Costs
      and Expenses**




Total
      costs and expenses, and the components thereof, decreased 38.7% to $20.7 million
      in the nine months ended September 30, 2007 from $33.8 million in the nine
      months ended September 30, 2006.




Electrical
      construction cost of goods sold decreased to $17.2 million in the nine months
      ended September 30, 2007 from $23.8 million in the nine months ended September
      30, 2006, a decrease of 27.5%. The decrease in costs reflects the lower level
      of
      construction activities.




Real
      estate development cost of goods sold was negative $1.8 million for the nine
      months ended September 30, 2007 as compared to $5.3 million in the nine months
      ended September 30, 2006. This decrease primarily reflects the reversal of
      previously recognized costs associated with the reversal of revenues due to
      the
      defaults on the Pineapple House development, discussed above, as well as the
      decrease due to only one project currently under construction compared to two
      in
      the prior year quarter.




The
      following table sets forth the depreciation and amortization expense for each
      respective segment for the nine months ended September 30 as
      indicated:




2007
            
            2006Electrical
                construction
            
            $
            2,138,063
            
            $
            1,715,617Real
                estate development
            
            
            18,807
            
            
            18,918Corporate
            
            
            109,093
            
            
            100,060Total
            
            $
            2,265,963
            
            $
            1,834,595




The
      depreciation and amortization expense was $2.3 million in the nine months ended
      September 30, 2007, compared to $1.8 million in the nine months ended September
      30, 2006, an increase of 23.5%. The increase in depreciation expense is mainly
      due to an increase in capital expenditures in 2006 and the first nine months
      of
      2007, primarily within the electrical construction segment. We had $3.2 million
      in capital expenditures within this segment during the nine months ended
      September 30, 2007, the majority of which was for equipment upgrades and fleet
      expansion.




19




The
      following table sets forth selling, general and administrative (“SG&A”)
      expenses for each respective segment for the nine months ended September 30
      as
      indicated:




2007
            
            2006Electrical
                construction
            
            $
            194,832
            
            $
            177,856Real
                estate development
            
            
            199,083
            
            
            633,056Corporate
            
            
            2,104,641
            
            
            2,072,611Total
            
            $
            2,498,556
            
            $
            2,883,523




In
      the
      nine months ended September 30, 2007, total SG&A expenses decreased 13.4% to
      $2.5 million for the nine months ended September 30, 2007 compared to $2.9
      million for the nine months ended September 30, 2006. The decrease in the
      SG&A expense for the nine months ended September 30, 2007 is mainly due to a
      $331,000 decrease in salaries within the combined corporate and real estate
      segments, as well as a $229,000 decrease in selling expenses within the real
      estate segment, due to the reversal of previously recognized sales. These
      decreases were partially offset by a $204,000 increase in professional services
      primarily within the corporate segment.




**Income
      Taxes**




The
      following table presents our provision for income tax and effective income
      tax
      rate from continuing operations for the nine months ended September 30 as
      indicated:




2007
            
            2006Income
                tax expense (benefit)
            
            $
            (955,027
            )
            $
            1,806,967Effective
                income tax rate
            
            
            (35.6
            )%
            
            38.5
            %




Our
      expected tax rate for the year ending December 31, 2007, which was calculated
      based on the estimated annual operating results for the year, is (35.3%). The
      effective tax rate differs from the federal statutory rate of 34% for the nine
      months ended September 30, 2007 primarily due to state income
      taxes.




**Discontinued
      Operations**




Effective
      November 30, 2002, we completed the sale of the capital stock of our mining
      subsidiaries. Following the sale, in September 2003, we were notified by the
      EPA
      that we are a PRP with respect to possible investigation and removal activities
      at a mine we previously owned, as described in note 4 to the consolidated
      financial statements contained herein. During the nine months ended September
      30, 2007, a reduction of $20,000 was recorded in the amount expected to be
      reimbursed by one of our former general liability insurance carriers. During
      the
      nine months ended September 30, 2006, as a result of our receipt of insurance
      proceeds in respect of our EPA claims, we had a gain from discontinued
      operations of $149,000.




20




***Three
      Months Ended September 30, 2007 Compared to Three Months Ended September 30,
      2006***





The
      table
      below is a reconciliation of our operating income attributable to each of our
      segments for the three months ended September 30 as indicated:





2007
            
            2006Electrical
                constructionRevenue
            
            $
            6,518,999
            
            $
            8,903,823Operating
                expensesCost
                of goods sold
            
            
            5,496,723
            
            
            7,189,242SG&A
            
            
            33,304
            
            
            63,206Depreciation
            
            
            716,563
            
            
            571,659(Gain)
                loss on sale of assets
            
            
            (6,927
            )
            
            4,439Total
                operating expenses
            
            
            6,239,663
            
            
            7,828,546Operating
                income
            
            $
            279,336
            
            $
            1,075,277Real
                estate developmentRevenue
            
            $
            41,042
            
            $
            3,244,927Operating
                expensesCost
                of goods sold
            
            
            46,293
            
            
            2,187,300SG&A
            
            
            150,551
            
            
            232,834Depreciation
            
            
            5,917
            
            
            5,560Write
                down of inventory
            
            
            473,227
            
            
            -Total
                operating expenses
            
            
            675,988
            
            
            2,425,694Operating
                income (loss)
            
            $
            (634,946
            )
            $
            819,233





**Revenues**




Total
      revenues in the three months ended September 30, 2007 decreased by 46.0% to
      $6.6
      million, compared to $12.1 million in the three months ended September 30,
      2006.
      This decrease reflects lower revenue in both our electrical construction segment
      and our real estate development segment, as discussed below.




Electrical
      construction revenues decreased 26.8% to $6.5 million for the three months
      ended
      September 30, 2007 from $8.9 million for the three months ended September 30,
      2006. The decrease in revenue for the three month period ending September 30,
      2007, when compared to the same period in 2006, was primarily due to a slowdown
      in demand for our electrical construction services and a reduction in the number
      of projects in process, resulting from the availability of fewer profitable
      projects. In the current quarter we had fewer projects under construction
      because we have recently been less successful in the bidding and awards process,
      partly due to the number of jobs awarded to competitors at prices that would
      not
      meet our target profit margins.




Real
      estate construction revenues decreased by 98.7% to $41,000 for the three months
      ended September 30, 2007 from $3.2 million for the like period in 2006. Revenues
      for the three months ended September 30, 2007, consisted of condo association
      dues received by Pineapple House Condominium Association, Inc. (“PHCA”).
      Revenues for the three months ended September 30, 2006 included revenue on
      both the Oak Park project, which was completed in the third quarter of 2006,
      and
      the Pineapple House project, which we had begun in the first quarter of 2006,
      recognized on a percentage of completion basis.




**Operating
      Results**




Total
      operating income (loss) decreased 187.7% to $(1.0 million) for the three months
      ended September 30, 2007, compared to $1.2 million for the like period in 2006.
      Electrical construction operations had an operating income of $279,000 during
      the three months ended September 30, 2007, compared to an operating income
      of
      $1.1 million during the three months ended September 30, 2006, a decrease of
      74.0%.




Operating
      margins on electrical construction operations decreased to 4.3% for the three
      months ended September 30, 2007 from 12.1% for the three months ended September
      30, 2006. The decrease in operating margins for the three month period ended
      September 30, 2007 was largely the result of reduced productivity on several
      jobs due to clients’ transmission line clearance problems, delays in our clients
      processing permits on a timely basis and related transition costs.




21




Real
      estate development operations had an operating income (loss) of $(635,000)
      in
      the three months ended September 30, 2007, compared to $819,000 in the three
      months ended September 30, 2006, a decrease of $1.5 million. The operating
      loss
      for the three months ended September 30, 2007 reflects, primarily, the write
      down of the Pineapple House inventory to estimated fair value discussed
      above.




**Costs
      and Expenses**




Total
      costs and expenses, and the components thereof, decreased 30.5% to $7.6 million
      in the three months ended September 30, 2007 from $11.0 million in the three
      months ended September 30, 2006.




Electrical
      construction cost of goods sold decreased to $5.5 million in the three months
      ended September 30, 2007 from $7.2 million in the three months ended September
      30, 2006. The decrease in costs reflects the lower level of construction
      activities.




Real
      estate development cost of goods sold decreased 97.9% to $46,000 in the three
      months ended September 30, 2007 from $2.2 million in the three months ended
      September 30, 2006. The decreased costs primarily reflect the fact that there
      are no projects currently under construction compared to two projects in the
      prior year. The costs incurred for the current year quarter are related to
      the
      PHCA.




The
      following table sets forth the depreciation and amortization expense for each
      respective segment for the three months ended September 30 as
      indicated:




2007
            
            2006Electrical
                construction
            
            $
            716,563
            
            $
            571,659Real
                estate development
            
            
            5,917
            
            
            5,560Corporate
            
            
            35,366
            
            
            29,966Total
            
            $
            757,846
            
            $
            607,185





The
      depreciation and amortization expense was $758,000 in the three months ended
      September 30, 2007, compared to $607,000 in the three months ended September
      30,
      2006, an increase of 24.8%. The increase in depreciation expense is mainly
      due
      to an increase in capital expenditures in 2006 and the first nine months of
      2007, primarily within the electrical construction segment. We had $3.2 million
      in capital expenditures within this segment during the nine months ended
      September 30, 2007, the majority of which was for equipment upgrades and fleet
      expansion.




The
      following table sets forth SG&A expenses for each respective segment for the
      three months ended September 30 as indicated:




2007
            
            2006Electrical
                construction
            
            $
            33,304
            
            $
            63,206Real
                estate development
            
            
            150,551
            
            
            232,834Corporate
            
            
            657,367
            
            
            669,353Total
            
            $
            841,222
            
            $
            965,393





In
      the
      three months ended September 30, 2007, total SG&A expenses decreased 12.9%
      to $841,000 compared to $965,000 for the three months ended September 30, 2006.
      The decrease in the SG&A expense for the three months ended September 30,
      2007 is mainly due to a $130,000 decrease in salaries within the combined
      corporate and real estate segments, as well as a $39,000 decrease in selling
      expenses within the real estate segment, due to the reversal of previously
      recognized sales. These decreases were partially offset by a $56,000 increase
      in
      professional services within the corporate segment.




**Income
      Taxes**




The
      following table presents our provision for income tax and effective income
      tax
      rate from continuing operations for the three months ended September 30 as
      indicated:




2007
            
            2006Income
                tax expense (benefit)
            
            $
            (456,444
            )
            $
            479,434Effective
                income tax rate
            
            
            (63.9
            %)
            
            38.5
            %





Our
      expected tax rate for the year ending December 31, 2007, which was calculated
      based on the estimated annual operating results for the year, is (35.3%). Our
      expected tax rate for the year ending December 31, 2007 at September 30, 2007
      changed from the first six months of 2007 due to a re-evaluation of estimated
      annual operating results. Therefore, the effective tax rate of (63.9%) differs
      from the federal statutory rate of 34% for the three months ended September
      30,
      2007 due to the significant impact of this re-evaluation of the estimated annual
      operating results for the year ending December 31, 2007.




22




**Discontinued
      Operations**




Effective
      November 30, 2002, we completed the sale of the capital stock of our mining
      subsidiaries. Following the sale, in September 2003, we were notified by the
      EPA
      that we are a PRP with respect to possible investigation and removal activities
      at a mine we previously owned, as described in note 4 to the consolidated
      financial statements contained herein. During the quarter ended September 30,
      2007, a reduction of $20,000 was recorded in the amount expected to be
      reimbursed by one of our former general liability insurance carriers. During
      the
      quarter ended September 30, 2006, as a result of our receipt of insurance
      proceeds in respect of our EPA claims, we had a gain from discontinued
      operations of $149,000.




**Liquidity
      and Capital Resources**




**Working
      Capital Analysis**




Our
      primary cash needs have been for working capital and capital expenditures.
      Our
      primary sources of cash have been cash flow from operations and borrowings
      under
      our lines of credit. As of September 30, 2007, we had cash and cash equivalents
      of $4.1 million and working capital of $13.6 million as compared to cash and
      cash equivalents of $6.8 million and working capital of $16.3 million as of
      December 31, 2006. In addition, we had $9.0 million in unused revolving lines
      of
      credit as of September 30, 2007, as discussed in note 5 to the consolidated
      financial statements in this Form 10-Q. We anticipate that this cash on hand,
      our credit facilities and our future cash flows from operating activities will
      provide sufficient cash to enable us to meet our future operating needs and
      debt
      requirements, as well as to ensure our ability to grow.




**Cash
      Flow** **Summary**




Net
      cash
      flows for each of the nine month periods ended September 30 were as
      follows:




2007
            
            2006Net
                cash provided by operating activities
            
            $
            1,043,240
            
            $
            7,034,361Net
                cash used by investing activities
            
            
            (3,175,073
            )
            
            (1,538,951
            )Net
                cash provided by (used by) financing activities
            
            
            (534,772
            )
            
            984,154Net
                change in cash and cash equivalents
            
            $
            (2,666,605
            )
            $
            6,479,564





**Operating
      Activities**




Cash
      flows from operating activities are comprised of income (loss) from continuing
      operations adjusted to reflect the timing of cash receipts and disbursements
      therefrom.




Cash
      provided by our operating activities totaled $1.0 million in the nine months
      ended September 30, 2007, compared to cash provided by our operating activities
      of $7.0 million for the same period in 2006. Our cash flows are influenced
      by
      the level of operations, operating margins, the types of services we provide,
      as
      well as the stages of our projects in both the electrical construction and
      real
      estate segments.




The
      increase of $6.0 million in cash used was mainly attributable to (i) the cash
      used by the change to the current period net loss versus net income in the
      prior
      year period and (ii) cash used within the real estate segment as we completed
      Pineapple House.




**Days** **of
      Sales Outstanding Analysis**




We
      evaluate fluctuations in our accounts receivable and costs and estimated
      earnings in excess of billings on uncompleted contracts for the electrical
      construction segment by comparing days of sales outstanding (“DSO”). We
      calculate DSO as of the end of any period by utilizing the preceding three
      months of revenues to determine sales per day. We then divide accounts
      receivable and accrued billings, net of allowance for doubtful accounts, if
      any,
      at the end of the period by sales per day to calculate DSO for accounts
      receivable. To calculate DSO for costs and estimated earnings in excess of
      billings, we divide costs and estimated earnings in excess of billings on
      uncompleted contracts by sales per day.




23




For
      the
      quarters ended September 30, 2007 and 2006, our DSO for accounts receivable
      were
      60 and 48, respectively, and our DSO for costs and estimated earnings in excess
      of billings on uncompleted contracts were 47 and 25, respectively. The increase
      in the DSO for costs and estimated earnings in excess of billings is primarily
      attributable to several projects requiring special billing conditions. The
      special billing conditions require: 1) the completion of discrete components
      of
      work prior to billing, rather than the more typical monthly progress billings,
      and 2) the construction of a series of distinct tasks performed by separate
      labor groups in sequential order, resulting in varying stages of construction
      for each distinct component. Several jobs with these special billing conditions
      have experienced delays in completion due to customer clearance issues, which
      results in increased delays in billings.




As
      of
      October 31, 2007, we have received approximately 76% of our September 30, 2007
      outstanding trade accounts receivable balance. In addition, as of October 31,
      2007, we have invoiced our customers for approximately 32% of the balance in
      costs and estimated earnings in excess of billings as of September 30, 2007.




**Investing
      Activities**




Net
      cash
      used in investing activities during the nine months ended September 30, 2007
      was
      $3.1 million compared to $1.5 million for the same period in 2006. These
      activities are mainly attributable to purchases of property and equipment by
      our
      electrical construction segment for the upgrading and replacement of
      equipment.




Our
      capital budget for 2007 is expected to total approximately $5.0 million, the
      majority of which is for investment in equipment upgrades and fleet expansion
      in
      the electrical construction segment. These purchases will be funded through
      our
      working capital, leases and lines of credit.




**Financing
      Activities**




Cash
      used
      by financing activities during the nine months ended September 30, 2007 was
      $535,000 compared to cash provided by financing activities of $984,000 during
      the same period in 2006. Cash provided by financing activities consists mainly
      of borrowings within the real estate segment of $5.6 million used for the
      development of Pineapple House and the borrowings made under our equipment
      line
      of credit of $2.1 million used for capital expenditures by the electrical
      construction segment, which is offset by the repayments made on the Pineapple
      House Mortgage of $7.1 million upon closing on the sales of condominium units,
      loan repayments of $650,000 on the Equipment Loan and loan repayments of
      $220,000 on the equipment line of credit. See note 5 of the notes to
      consolidated financial statements for more information regarding these
      borrowings. In addition, we repaid capital lease obligations of $235,000 during
      the nine month period ended September 30, 2007.




We
      have
      paid no cash dividends on our Common Stock since 1933, and it is not expected
      that we will pay any cash dividends on our Common Stock in the immediate
      future.




**Forecast**




We
      anticipate our cash on hand, cash flows from operations and credit facilities
      will provide sufficient cash to enable us to meet our working capital needs,
      debt service requirements and planned capital expenditures for at least the
      next
      twelve months. However, our revenues, results of operations and cash flows,
      as
      well as our ability to seek additional financing, may be negatively impacted
      by
      factors including, but not limited to, a decline in demand for electrical
      construction services and/or condominiums in the markets served and general
      economic conditions, heightened competition, availability of construction
      materials, increased interest rates and adverse weather conditions.




**Impact
      of Inflation**




The
      impact of inflation on our operations has not been significant to date. However,
      there can be no assurance that a high rate of inflation in the future would
      not
      have an adverse impact on our operating results.




**Item
      3. Quantitative and** **Qualitative
      Disclosure****s
      about Market Risk.******




Our
      Company and our subsidiaries are exposed to certain market risks from
      transactions that are entered into during the normal course of business. Our
      primary market risk exposure is related to interest rate risk. At September
      30,
      2007, we performed sensitivity analyses to assess the potential effect of this
      risk and concluded that a hypothetical change in the interest rates of 100
      basis
      points (i.e., 1%) would not materially affect our financial position, results
      of
      operations or cash flows.


24


**Item
      4T. Controls and Procedures.** ****




**Evaluation** **of
      Disclosure Controls and Procedures**




We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in the reports that we file or submit
      under
      the Securities Exchange Act of 1934, as amended, is recorded, processed,
      summarized and reported within the time periods specified in the rules and
      forms
      of the SEC, and that such information is accumulated and communicated to our
      management timely. An evaluation was performed under the supervision and with
      the participation of our management, including John H. Sottile, our Chief
      Executive Officer and Stephen R. Wherry, our Chief Financial Officer, of the
      effectiveness of our disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of
      September 30, 2007. Based upon that evaluation, our management, including our
      Chief Executive Officer and our Chief Financial Officer, concluded that as
      of
      September 30, 2007, our disclosure controls and procedures were effective to
      ensure that information we are required to disclose in reports that we file
      or
      submit under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in rules and forms of the SEC, and is
      accumulated and communicated to our management as appropriate to allow timely
      decisions regarding required disclosure.




**Changes** **in
      Internal Controls over Financial Reporting**




No
      changes in our internal controls over financial reporting occurred during the
      third quarter of 2007 that have materially affected, or are reasonably likely
      to
      materially affect, our internal controls over financial reporting.




Based
      on
      current regulations, Section 404 of the Sarbanes-Oxley Act will require our
      management to provide an assessment of the effectiveness of our internal control
      over financial reporting as of December 31, 2007, and our independent registered
      public accounting firm will be required to audit the effectiveness of internal
      control over financial reporting as of December 31, 2008. We are in the process
      of performing the necessary system and process documentation in preparation
      for
      the evaluation and testing required for management to make this assessment
      and
      for our independent registered public accounting firm to provide their
      attestation report. We are nearing the completion of this process and our
      assessment. This process has required significant amounts of management time
      and
      resources. In the course of evaluation and testing, we may identify deficiencies
      that will need to be addressed and remedied, although based on our assessment
      to
      date, we do not expect to identify any material weaknesses in our internal
      controls over financial reporting as a result of this review.




**Limitations
      of the** **Effectiveness
      of Controls**




A
      control
      system, no matter how well conceived and operated, can provide only reasonable
      assurance, not absolute assurance, that the objectives of the control system
      are
      met. Because of inherent limitations in all control systems, no evaluation
      of
      controls can provide absolute assurance that all control issues, if any, within
      a company have been detected. These inherent limitations include the realities
      that judgments in decision-making can be faulty and that breakdowns can occur
      because of simple error or mistake. Additionally, controls can be circumvented
      by the individual acts of some persons, by collusion of two or more people
      or by
      management override of the controls. The design of any system of controls is
      also based in part upon certain assumptions about the likelihood of future
      events, and there can be no assurance that the design will succeed in achieving
      its stated goals under all potential future conditions; over time, controls
      may
      become inadequate because of changes in conditions, or the degree of compliance
      with policies and procedures may deteriorate. Because of the inherent
      limitations in a cost-effective control system, misstatements due to error
      or
      fraud may occur and not be detected. Accordingly, our disclosure controls and
      procedures are designed to provide reasonable, not absolute, assurance that
      the
      objectives of our disclosure control system are met and, as set forth above,
      our
      CEO and CFO have concluded, based on their evaluation, that our disclosure
      controls and procedures were effective as of September 30, 2007 to provide
      reasonable assurance that the objectives of the disclosure control system were
      met.


25


**PART
      II. OTHER INFORMATION**




**Item
      1. Legal Proceedings**




**Environmental**




For
      information in response to this Item, see the discussion regarding the special
      notice letter we received from the EPA regarding the Anderson-Calhoun mine/mill
      site in note 4 of notes to the consolidated financial statements in this Form
      10-Q.




**Item
      1A. Risk Factors**




There
      have been no material changes from the risk factors previously disclosed in
      our
      Annual Report on Form 10-K for the year ended December 31, 2006.




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**




The
      following table sets forth information on a monthly basis regarding our
      purchases of our Common Stock during the third quarter of 2007:




**Issuer
        Purchases of Equity Securities**


Period
            
            Total Number ofSharesPurchased
            
            Average PricePaid per Share
            
            Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs(1)
            
            Maximum Numberof Shares that MayYet Be PurchasedUnder the Plans orPrograms07/1/07-07/31/07
            
            
            -
            
            $
            -
            
            
            -
            
            
            1,154,94008/1/07-08/31/07
            
            
            -
            
            
            -
            
            
            -
            
            
            1,154,94009/1/07-09/30/07
            
            
            -
            
            
            -
            
            
            -
            
            
            1,154,940Total
            
            
            -
            
            $
            -
            
            
            -
            
            
            1,154,940





(1)
            Since
                September 17, 2002, we have had a stock repurchase plan which, as
                last
                amended by the Board of Directors on May 31, 2007, permits the purchase
                of
                up to 3,500,000 shares until September 30, 2008. We may repurchase
                our
                shares either in the open market or through private transactions.
                The
                volume of the shares to be repurchased is contingent upon market
                conditions and other factors. As of September 30, 2007, the total
                number
                of shares repurchased under the Repurchase Plan was 2,345,060 at
                a cost of
                $1,289,467 (average cost of $0.55 per share) and the remaining number
                of
                shares available to be repurchased under the Repurchase Plan is 1,154,940.




**Item
      6. Exhibits**




*31-1  Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. Section
      7241





*31-2  Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 15 U.S.C. Section
      7241





*32-1  **Certification
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
      1350





*32-2  **Certification
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
      1350





*
      Filed
      herewith.





**
      These
      exhibits are intended to be furnished in accordance with Regulation S-K Item
      601(b)(32)(ii) and shall not be deemed to be filed for purposes of Section
      18 of
      the Securities Act of 1934 or incorporated by reference into any filing under
      the Securities Act of 1933, except as shall be expressly set forth by specific
      reference.


26


**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.





Dated:
                  November 8, 2007
              
              **The
                  Goldfield Corporation**By:
              /s/**John
                  H. Sottile**John
                  H. SottileChairman
                  of the Board, President and ChiefExecutive
                  Officer (Principal ExecutiveOfficer)/s/**Stephen
                  R. Wherry**Stephen
                  R. WherrySenior
                  Vice President, Chief FinancialOfficer,
                  Treasurer and Assistant Secretary(Principal
                  Financial and AccountingOfficer)




27