**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 June 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
      August 7, 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 JUNE 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
              
              
              13Item
                  3. Quantitative and Qualitative Disclosures about Market
                  Risk.
              
              
              22Item
                  4T. Controls and Procedures.
              
              
              23PART
                  II. OTHER INFORMATION
              
              
              24Item
                  1. Legal Proceedings
              
              
              24Item
                  1A. Risk Factors
              
              
              24Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              
              
              24Item
                  4. Submission of Matters to a Vote of Security Holders
              
              
              24Item
                  6. Exhibits
              
              
              25SIGNATURES
              
              
              26




2


**PART
      I. FINANCIAL INFORMATION**




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




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS**


**(Unaudited)**


June
                  30,
              
              December
                  31,2007
              
              2006ASSETSCurrent
                  assetsCash
                  and cash equivalents
              
              $
              4,548,191
              
              $
              6,801,600Accounts
                  receivable and accrued billings
              
              
              4,147,221
              
              
              4,908,511Contracts
                  receivable
              
              
              3,279,600
              
              
              10,623,909Remediation
                  insurance receivable
              
              
              273,349
              
              
              329,888Current
                  portion of notes receivable
              
              
              50,143
              
              
              41,453Construction
                  inventory
              
              
              -
              
              
              216,989Real
                  estate inventories
              
              
              10,506,278
              
              
              801,411Costs
                  and estimated earnings in excess ofbillings
                  on uncompleted contracts
              
              
              2,473,264
              
              
              2,358,738Deferred
                  income taxes
              
              
              20,500
              
              
              263,400Income
                  taxes recoverable
              
              
              654,434
              
              
              309,922Residential
                  properties under construction
              
              
              -
              
              
              3,784,165Prepaid
                  expenses
              
              
              1,017,745
              
              
              431,441Other
                  current assets
              
              
              22,345
              
              
              17,614Total
                  current assets
              
              
              26,993,070
              
              
              30,889,041Property,
                  buildings and equipment, at cost, net of depreciationof
                  $14,302,301 as of June 30, 2007 and$13,715,313
                  as of December 31, 2006
              
              
              10,866,696
              
              
              9,465,378Notes
                  receivable, less current portion
              
              
              375,099
              
              
              407,409Deferred
                  charges and other assetsLand
                  and land development costs
              
              
              710,495
              
              
              710,495Cash
                  surrender value of life insurance
              
              
              326,492
              
              
              321,724Other
                  assets
              
              
              662,285
              
              
              110,129Total
                  deferred charges and other assets
              
              
              1,699,272
              
              
              1,142,348Total
                  assets
              
              $
              39,934,137
              
              $
              41,904,176LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilitiesAccounts
                  payable and accrued liabilities
              
              $
              2,899,164
              
              $
              5,359,893Billings
                  in excess of costs and estimatedearnings
                  on uncompleted contracts
              
              
              -
              
              
              24,444Notes
                  payable
              
              
              9,916,477
              
              
              8,663,768Capital
                  leases, due within one year
              
              
              326,754
              
              
              317,160Current
                  liabilities of discontinued operations
              
              
              133,759
              
              
              208,221Total
                  current liabilities
              
              
              13,276,154
              
              
              14,573,486Deferred
                  income taxes
              
              
              465,400
              
              
              861,400Other
                  accrued liabilities
              
              
              24,416
              
              
              20,821Notes
                  payable, less current portion
              
              
              2,560,976
              
              
              1,207,745Capital
                  leases, less current portion
              
              
              729,956
              
              
              894,976Total
                  liabilities
              
              
              17,056,902
              
              
              17,558,428Commitments
                  and contingenciesStockholders'
                  equityPreferred
                  stock, $1 par value per share, 5,000,000shares
                  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
              
              
              2,922,362
              
              
              4,390,875Treasury
                  stock, 2,362,418 shares, at cost
              
              
              (1,308,187
              )
              
              (1,308,187
              )Total
                  stockholders' equity
              
              
              22,877,235
              
              
              24,345,748Total
                  liabilities and stockholders' equity
              
              $
              39,934,137
              
              $
              41,904,176




See
        accompanying notes to consolidated financial statements


3




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(Unaudited)**


Three
                  Months Ended
                  June
                    30,
              
              Six
                  Months Ended
                  June
                    30,2007
              
              2006
              
              2007
              
              2006RevenueElectrical
                  construction
              
              $
              6,658,079
              
              $
              11,186,323
              
              $
              14,012,121
              
              $
              21,678,328Real
                  estate development
              
              
              (5,303,303
              )
              
              1,046,540
              
              
              (2,848,870
              )
              
              4,549,487Total
                  revenue
              
              
              1,354,776
              
              
              12,232,863
              
              
              11,163,251
              
              
              26,227,815Costs
                  and expensesElectrical
                  construction
              
              
              4,946,406
              
              
              8,460,325
              
              
              11,748,110
              
              
              16,583,534Real
                  estate development
              
              
              (3,470,151
              )
              
              827,489
              
              
              (1,776,226
              )
              
              3,148,918Depreciation
              
              
              765,770
              
              
              628,120
              
              
              1,508,118
              
              
              1,227,411Selling,
                  general and administrative
              
              
              606,362
              
              
              819,774
              
              
              1,657,333
              
              
              1,918,129Gain
                  on sale of assets
              
              
              (1,436
              )
              
              (11,013
              )
              
              (10,294
              )
              
              (29,323
              )Total
                  costs and expenses
              
              
              2,846,951
              
              
              10,724,695
              
              
              13,127,041
              
              
              22,848,669Total
                  operating income (loss)
              
              
              (1,492,175
              )
              
              1,508,168
              
              
              (1,963,790
              )
              
              3,379,146Other
                  income (expense), netInterest
                  income
              
              
              51,554
              
              
              26,972
              
              
              112,886
              
              
              51,684Interest
                  expense, net of amount capitalized
              
              
              (99,060
              )
              
              (62,965
              )
              
              (178,705
              )
              
              (99,957
              )Other
              
              
              53,364
              
              
              110,128
              
              
              62,513
              
              
              113,622Total
                  other income (expenses), net
              
              
              5,858
              
              
              74,135
              
              
              (3,306
              )
              
              65,349Income
                  (loss) from continuing operationsbefore
                  income taxes
              
              
              (1,486,317
              )
              
              1,582,303
              
              
              (1,967,096
              )
              
              3,444,495Income
                  tax expense (benefit)
              
              
              (364,815
              )
              
              609,831
              
              
              (498,583
              )
              
              1,327,533Net
                  income (loss)
              
              $
              (1,121,502
              )
              $
              972,472
              
              $
              (1,468,513
              )
              $
              2,116,962Earnings
                  (loss) per share of common stock -basic
                  and diluted
              
              $
              (0.04
              )
              $
              0.04
              
              $
              (0.06
              )
              $
              0.08Weighted
                  average number of common sharesoutstanding
                  – basic and diluted
              
              
              25,451,354
              
              
              25,572,192
              
              
              25,451,354
              
              
              25,572,192




See
        accompanying notes to consolidated financial statements




4




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)**


Six
                  Months Ended
                  June
                    30,2007
              
              2006Cash
                  flows from operating activitiesNet
                  income (loss) from continuing operations
              
              $
              (1,468,513
              )
              $
              2,116,962Adjustments
                  to reconcile net income (loss) to netcash
                  provided by (used by) operating activitiesDepreciation
              
              
              1,508,118
              
              
              1,227,411Gain
                  on sale of assets
              
              
              (10,294
              )
              
              (29,323
              )Deferred
                  income taxes
              
              
              (153,100
              )
              
              391,000Changes
                  in operating assets and liabilitiesAccounts
                  receivable and accrued billings
              
              
              761,290
              
              
              (484,046
              )Contracts
                  receivable
              
              
              7,344,309
              
              
              4,292,613Construction
                  inventory
              
              
              216,989
              
              
              (481,363
              )Real
                  estate inventories
              
              
              (9,704,867
              )
              
              -Costs
                  and estimated earnings in excessof
                  billings on uncompleted contracts
              
              
              (114,526
              )
              
              (1,500,264
              )Land
                  and land development costs
              
              
              -
              
              
              1,074,680Residential
                  properties under construction
              
              
              3,784,165
              
              
              (2,081,989
              )Income
                  taxes recoverable
              
              
              (344,512
              )
              
              (14,404
              )Income
                  taxes payable
              
              
              -
              
              
              167,873Prepaid
                  expenses and other assets
              
              
              (1,143,191
              )
              
              (587,823
              )Accounts
                  payable and accrued liabilities
              
              
              (2,490,186
              )
              
              652,373Billings
                  in excess of costs and estimatedearnings
                  on uncompleted contracts
              
              
              (24,444
              )
              
              (23,881
              )Net
                  cash provided by (used by) operatingactivities
                  of continuing operations
              
              
              (1,838,762
              )
              
              4,719,819Net
                  cash used by operating activitiesof
                  discontinued operations
              
              
              (17,923
              )
              
              (61,251
              )Net
                  cash provided by (used by) operating activities
              
              
              (1,856,685
              )
              
              4,658,568Cash
                  flows from investing activitiesProceeds
                  from the disposal of property and equipment
              
              
              91,981
              
              
              136,735Proceeds
                  from notes receivable
              
              
              23,620
              
              
              21,216Purchases
                  of property and equipment
              
              
              (2,958,071
              )
              
              (1,438,503
              )Cash
                  surrender value of life insurance
              
              
              (4,768
              )
              
              9,580Net
                  cash used by investing activities ofcontinuing
                  operations
              
              
              (2,847,238
              )
              
              (1,270,972
              )Cash
                  flows from financing activitiesProceeds
                  from term debt
              
              
              698,093
              
              
              2,404,676Repayments
                  on term debt
              
              
              (216,666
              )
              
              (520,534
              )Net
                  borrowings (repayments) under lines of credit
              
              
              2,124,513
              
              
              (3,843,550
              )Repayments
                  on capital leases
              
              
              (155,426
              )
              
              -Net
                  cash provided by (used by) financing activities ofcontinuing
                  operations
              
              
              2,450,514
              
              
              (1,959,408
              )Net
                  increase (decrease) in cash and cash equivalents
              
              
              (2,253,409
              )
              
              1,428,188Cash
                  and cash equivalents at beginning of period
              
              
              6,801,600
              
              
              2,912,494Cash
                  and cash equivalents at end of period
              
              $
              4,548,191
              
              $
              4,340,682Supplemental
                  disclosures:Cash
                  paid for interest
              
              $
              166,373
              
              $
              88,333Cash
                  paid for income taxes
              
              
              -
              
              
              783,064Non-cash
                  investing and financing activities:Capital
                  leases for equipment
              
              
              -
              
              
              975,665Liability
                  for equipment acquired
              
              
              33,052
              
              
              -


See
        accompanying notes to consolidated financial statements


5




**THE
      GOLDFIELD CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**June
      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.




***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. 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




**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 June 30, 2007, outstanding contracts receivable amounted
      to
      $3.3 million, all of which is for the Pineapple House condominium project.
      As of December 31, 2006, outstanding contracts receivable amounted to $10.6
      million, all of which related to the Pineapple House project. For the six months
      ended June 30, 2007, a total of thirteen customers defaulted or notified the
      Company of their intent to default on their contractual obligation to close
      the
      purchase of individual condominium units. As of June 30, 2007 and December
      31,
      2006, $1.0 million and $1.5 million, respectively, of non-refundable earnest
      money deposits were held by a third party for the Pineapple House
      project.




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, is stated
      at
      the lower of cost or market.




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 June 30, 2007 compared to four at December 31, 2006. In addition, as of
      June
      30, 2007, the Company 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.




**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.




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. At the close of the comment period, the EPA
      will
      address any comments received and expects to adopt a formal 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. The EPA has
      indicated that it expects response actions at the Site to be completed during
      the 2007 construction season.




7




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 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 six months
      ended June 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 six 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. Another of the
      Company’s former general liability insurance carriers 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.
      However, that insurer has not yet made any payment to the Company. 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.




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. The provision did not change during each of the six month periods ended
      June 30, 2007 and 2006. As of June 30, 2007 the cumulative net expense was
      $32,000. 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, the anticipated professional fees associated 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
      June 30, 2007, the Company has recorded a reserve balance for future applicable
      costs of $134,000 (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.




8


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


June
                    30,
                
                December
                    31,2007
                
                2006Current
                    assetsRemediation
                    insurance receivable
                
                $
                273,349
                
                $
                329,888Total
                    assets of discontinued operations
                
                $
                273,349
                
                $
                329,888Current
                    liabilitiesReserve
                    for remediation
                
                $
                133,759
                
                $
                208,221Total
                    liabilities of discontinued operations
                
                $
                133,759
                
                $
                208,221




**Note
      5 - Notes Payable**




As
      of
      June 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.” As of June 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 $217,000 and $650,000 as of June
      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 (7.12% and 7.15% as of June 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.




As
      of
      June 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. Interest is payable monthly at an annual rate
      equal to the monthly LIBOR rate plus one and eighty-five one-hundredths percent
      (7.17% and 7.20% as of June 30, 2007 and December 31, 2006, respectively).
      The
      maturity date of the loan is November 18, 2007. 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 $8.8 million and
      $7.8 million as of June 30, 2007 and December 31, 2006, respectively. The loan
      is secured by a Mortgage and Security Agreement.




As
      of
      June 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 (7.12% as of June 30, 2007 and 7.15% as of December 31,
      2006, respectively). The maturity date of the loan is December 13, 2010.
      Southeast Power must make monthly payments of interest to the Bank in arrears
      on
      the principal balance outstanding until July 2007, and thereafter, Southeast
      Power must pay monthly installments of principal, in addition to interest on
      the
      principal balance outstanding, until maturity. Borrowings outstanding under
      this
      loan agreement were $3.5 million and $1.4 million as of June 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.




9




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




Interest
      costs related to the construction of condominiums are capitalized. During the
      three month periods ended June 30, 2007 and 2006, the Company capitalized
      interest costs of $211,000 and $51,000, respectively. During the six month
      periods ended June 30, 2007 and 2006, the Company capitalized interest costs
      of
      $384,000 and $139,000, 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
      June 30, 2007, outstanding performance bonds issued on behalf of the Company’s
      electrical construction subsidiary amounted to approximately $16.7 million.




**Note
      7 - Income Taxes**




At
      June
      30, 2007, the Company had alternative minimum tax (“AMT”) credit carryforwards
      of approximately $449,000, which are available to reduce future federal income
      taxes over an indefinite period. The net deferred tax asset decreased from
      $263,000 at December 31, 2006 to $21,000 at June 30, 2007 due to the utilization
      of AMT credit carryforwards on an annualized basis and the reclassification
      of
      $396,000 AMT credit carryforwards to noncurrent. The net deferred tax liability
      decreased from $861,000 at December 31, 2006 to $465,000 at June 30, 2007 due
      to
      the reclassification of AMT credit carryforwards. 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 $2.5 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
                  June
                    30,
              
              Six
                  Months Ended
                  June
                    30,2007
              
              2006
              
              2007
              
              2006Income
                  tax expense (benefit)
              
              $
              (364,815
              )
              $
              609,831
              
              $
              (498,583
              )
              $
              1,327,533Effective
                  income tax rate
              
              
              (24.5%
              )
              
              38.5%
              
              
              (25.3%
              )
              
              38.5%




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
      (28.3%). **** The
      effective tax rates differ from the federal statutory rate of 34% for the three
      months and six months ended June 30, 2007 primarily due to nondeductible
      expenses, such as 50% of meals and officers' life insurance.




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. As a result of this review, the company
      was
      not required to accrue additional income taxes .




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 June 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 six month periods ended
      June 30, 2007 and 2006. As of June 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.




10




**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.




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




Three
                  Months Ended
                  June
                    30,
              
              Six
                  Months Ended
                  June
                    30,2007
              
              2006
              
              2007
              
              2006RevenuesElectrical
                  construction
              
              $
              6,658,079
              
              $
              11,186,323
              
              $
              14,012,121
              
              $
              21,678,328Real
                  estate development
              
              
              (5,303,303
              )
              
              1,046,540
              
              
              (2,848,870
              )
              
              4,549,487Total
                  revenues
              
              
              1,354,776
              
              
              12,232,863
              
              
              11,163,251
              
              
              26,227,815Operating
                  expensesElectrical
                  construction
              
              
              5,783,223
              
              
              9,118,855
              
              
              13,328,139
              
              
              17,817,722Real
                  estate development
              
              
              (3,611,107
              )
              
              953,736
              
              
              (1,714,804
              )
              
              3,562,498Corporate
              
              
              674,835
              
              
              652,104
              
              
              1,513,706
              
              
              1,468,449Total
                  operating expenses
              
              
              2,846,951
              
              
              10,724,695
              
              
              13,127,041
              
              
              22,848,669Operating
                  income (loss)Electrical
                  construction
              
              
              874,856
              
              
              2,067,468
              
              
              683,982
              
              
              3,860,606Real
                  estate development
              
              
              (1,692,196
              )
              
              92,804
              
              
              (1,134,066
              )
              
              986,989Corporate
              
              
              (674,835
              )
              
              (652,104
              )
              
              (1,513,706
              )
              
              (1,468,449
              )Total
                  operating income (loss)
              
              
              (1,492,175
              )
              
              1,508,168
              
              
              (1,963,790
              )
              
              3,379,146Other
                  income (expense), netElectrical
                  construction
              
              
              (83,348
              )
              
              (25,948
              )
              
              (118,257
              )
              
              (43,763
              )Real
                  estate development
              
              
              53,991
              
              
              105,882
              
              
              53,991
              
              
              105,882Corporate
              
              
              35,215
              
              
              (5,799
              )
              
              60,960
              
              
              3,230Total
                  other income (expense), net
              
              
              5,858
              
              
              74,135
              
              
              (3,306
              )
              
              65,349Net
                  income (loss) before taxesElectrical
                  construction
              
              
              791,508
              
              
              2,041,520
              
              
              565,725
              
              
              3,816,843Real
                  estate development
              
              
              (1,638,205
              )
              
              198,686
              
              
              (1,080,075
              )
              
              1,092,871Corporate
              
              
              (639,620
              )
              
              (657,903
              )
              
              (1,452,746
              )
              
              (1,465,219
              )Total
                  net income (loss) before taxes
              
              $
              (1,486,317
              )
              $
              1,582,303
              
              $
              (1,967,096
              )
              $
              3,444,495




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.




11


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




June
                  30,
              
              December
                  31,Identifiable
                  assets
              
              2007
              
              2006Electrical
                  construction
              
              $
              20,821,012
              
              $
              21,317,634Real
                  estate development
              
              
              14,759,098
              
              
              16,225,823Corporate
              
              
              4,080,678
              
              
              4,030,831Discontinued
                  operations
              
              
              273,349
              
              
              329,888Total
              
              $
              39,934,137
              
              $
              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 June 30, 2007 and June 30, 2006, the two largest customers
      accounted for 47% and 87%, respectively, of the Company’s electrical
      construction revenue. For the six months ended June 30, 2007 and June 30, 2006,
      the three largest customers accounted for 53% and 89%, respectively, of the
      Company’s electrical construction revenue.




***Real
      Estate Development***




During
      the three months ended June 30, 2007, twelve customers defaulted or provided
      notification of their intent to default on their contractual obligations to
      close the purchase of their condominium units. One buyer had provided
      notification of default in the first quarter of 2007. As a result of these
      defaults and notifications of intent to default, revenues and operating expenses
      in the real estate development segment for the three months and six months
      ended
      June 30, 2007 reflect the reversal of previously recognized revenues of $6.7
      million and $7.2 million, respectively, and previously recognized cost of sales
      of $4.9 million and $5.2 million, respectively. The cost of these units held
      for
      sale are reflected in real estate inventory as of June 30, 2007.




12


**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 six 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.




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 six months ended
      June
      30, 2007, during which we have made no additional sales for Pineapple House,
      however we sold one unit in the Oak Park project. 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 seven of these units and expect to close
      on
      two more by mid-August. The remaining thirteen buyers have either defaulted
      or
      provided notification of their intention to default on their contract. As a
      result of the actual or anticipated 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 both the three month and six month periods ended June 30,
      2007.




13




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.




As
      we
      look to our third quarter and the remainder of 2007, we continue to see weak,
      and perhaps deteriorating, market conditions, which will likely 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. 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.
      Based on current discussions with the Bank, we expect to be able to renew our
      construction loan on substantially similar terms to those currently in
      effect.




**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.




***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.




14




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
      six
      month periods ended June 30, 2007 were $6,000 and $17,000, respectively compared
      to no contract loss accruals for both the three and six month periods ended
      June
      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 six month periods ended June
      30, 2007 and June 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.




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 three and six month
      periods ended June 30, 2007, we recorded a reversal in revenues previously
      recognized of $6.7 million and $7.2 million, respectively, and in costs of
      sales
      previously recorded of $4.9 million and $5.2 million, respectively.




***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.




15


As
      of
      June 30, 2007, our deferred tax assets were largely comprised of an AMT credit
      carryforward. 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. 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 $2.5 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. The provision did
      not
      change during each of the six months ended June 30, 2007 and the six months
      ended June 30, 2006. As of June 30, 2007, the cumulative net expense was
      $32,000. 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, the anticipated professional fees associated 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
      June 30, 2007, we have recorded a reserve balance for future applicable costs
      of
      $134,000 (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.




**Results
      of Operations**




*Six
      Months Ended June 30, 2007 Compared to Six Months Ended June 30,
      2006*




**Segment
      Information**




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


2007
              
              2006Electrical
                  constructionRevenue
              
              $
              14,012,121
              
              $
              21,678,328Operating
                  expensesCost
                  of goods sold
              
              
              11,748,110
              
              
              16,583,534Depreciation
              
              
              1,421,500
              
              
              1,143,959SG&A
              
              
              161,528
              
              
              114,649Other
                  general income
              
              
              (2,999
              )
              
              (24,420
              )Total
                  operating expenses
              
              
              13,328,139
              
              
              17,817,722Operating
                  income
              
              $
              683,982
              
              $
              3,860,606Real
                  estate developmentRevenue
              
              $
              (2,848,870
              )
              $
              4,549,487Operating
                  expensesCost
                  of goods sold
              
              
              (1,776,226
              )
              
              3,148,918Depreciation
              
              
              12,890
              
              
              13,358SG&A
              
              
              48,532
              
              
              400,222Total
                  operating expenses
              
              
              (1,714,804
              )
              
              3,562,498Operating
                  income (loss)
              
              $
              (1,134,066
              )
              $
              986,989
  16


**Continuing
      Operations**




***Revenues***




Total
      revenues in the six months ended June 30, 2007 decreased by 57.4% to $11.2
      million, compared to $26.2 million in the six months ended June 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, or expected default, on thirteen condominium units.




Electrical
      construction revenues decreased $7.7 million, or 35.4%, to $14.0 million for
      the
      six months ended June 30, 2007 from $21.7 million for the six months ended
      June
      30, 2006. The decrease in revenue for the six months period ending June 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 six 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 June 30, 2007, the electrical construction operation’s
      backlog was approximately $11.9 million, which included approximately $9.7
      million from fixed price contracts for which revenue is recognized using
      percentage-of-completion and approximately $2.2 million from service agreement
      contracts for which revenue is recognized as work is performed. Of our total
      backlog, we expect approximately 82% to be completed within the current fiscal
      year. This compares to a backlog of $14.0 million at June 30, 2006, of which
      approximately $8.5 million represented backlog from fixed price contracts and
      approximately $5.5 million represented backlog from service agreement
      contracts.




Real
      estate construction revenues decreased by 162.6% to $(2.8 million) for the
      six
      months ended June 30, 2007 from $4.6 million for the like period in 2006. The
      decrease in revenues for the six months ended June 30, 2007, compared to the
      like period in 2006, 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 six months ended June 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 six months ended June 30, 2007, the only
      project under construction was Pineapple House.




As
      of
      June 30, 2007 due to the completion of the Pineapple House project there was
      no
      backlog for the real estate development operation’s segment. There can be no
      assurance that settlements of condominiums subject to contracts for sale will
      occur.




Our
      Pineapple House project began recognizing revenue during the first quarter
      2006
      and was complete as of June 30, 2007.




***Operating
      Results***




Total
      operating income (loss) decreased to $(2.0 million) for the six months ended
      June 30, 2007, compared to $3.4 million for the like period in 2006. Electrical
      construction operations had an operating income of $684,000 during the six
      months ended June 30, 2007, compared to an operating income of $3.9 million
      during the six months ended June 30, 2006.




Operating
      margins on electrical construction operations decreased to 4.9% for the six
      months ended June 30, 2007 from 17.8% for the six months ended June 30, 2006.
      The decrease in operating margins for the six month period ended June 30, 2007
      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.




17




Real
      estate development operations had an operating loss of $1.1 million in the
      six
      months ended June 30, 2007, compared to operating income of $987,000 in the
      six
      months ended June 30, 2006, a decrease of $2.1 million. The operating loss
      for
      the six months ended June 30, 2007, reflects the reversal of revenues and cost
      of sales due to the default on purchase contracts discussed above.




***Costs
      and Expenses***




Total
      costs and expenses, and the components thereof, decreased 42.5% to $13.1 million
      in the six months ended June 30, 2007 from $22.9 million in the six months
      ended
      June 30, 2006.




Electrical
      construction cost of goods sold decreased to $11.8 million in the six months
      ended June 30, 2007 from $16.6 million in the six months ended June 30, 2006,
      a
      decrease of 29.2%. The decrease in costs reflects the lower level of
      construction activities.




Real
      estate development cost of goods sold decreased to $(1.8 million) in the six
      months ended June 30, 2007 from $3.2 million in the six months ended June 30,
      2006, a decrease of 156.4%. The decreased costs primarily reflect 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 six months ended June 30 as indicated:


2007
              
              2006Electrical
                  construction
              
              $
              1,421,500
              
              $
              1,143,959Real
                  estate development
              
              
              12,890
              
              
              13,358Corporate
              
              
              73,728
              
              
              70,094Total
              
              $
              1,508,118
              
              $
              1,227,411




The
      depreciation and amortization expense was $1.5 million in the six months ended
      June 30, 2007, compared to $1.2 million in the six months ended June 30, 2006,
      an increase of 22.9%. The increase in depreciation expense is mainly due to
      an
      increase in capital expenditures in 2006 and the first six months of 2007,
      primarily within the electrical construction segment. We had $2.8 million in
      capital expenditures within this segment during the six months ended June 30,
      2007, the majority of which was for equipment upgrades and fleet expansion.




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


2007
              
              2006Electrical
                  construction
              
              $
              161,528
              
              $
              114,649Real
                  estate development
              
              
              48,532
              
              
              400,222Corporate
              
              
              1,447,273
              
              
              1,403,258Total
              
              $
              1,657,333
              
              $
              1,918,129




In
      the
      six months ended June 30, 2007, total SG&A expenses decreased 13.6% to $1.7
      million for the six months ended June 30, 2007 compared to $1.9 million for
      the
      six months ended June 30, 2006. The decrease in the SG&A expense for the six
      months ended June 30, 2007 is mainly due to a $202,000 decrease in salaries
      within the combined corporate and real estate segments, as well as a $190,000
      decrease in selling expenses within the real estate segment, due to the reversal
      of previously recognized sales. These decreases were partially offset by a
      $148,000 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 six months ended June 30 as
      indicated:


2007
              
              2006Income
                  tax expense (benefit)
              
              $
              (498,583
              )
              $
              1,327,533Effective
                  income tax rate
              
              
              (25.3%
              )
              
              38.5%






18





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 (28.3%). The
      effective tax rate differs from the federal statutory rate of 34% for the six
      months ended June 30, 2007 primarily due to nondeductible expenses such as
      50%
      of meals and officers' life insurance.




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




**Segment
      Information**




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


2007
              
              2006Electrical
                  constructionRevenue
              
              $
              6,658,079
              
              $
              11,186,323Operating
                  expensesCost
                  of goods sold
              
              
              4,946,406
              
              
              8,460,325Depreciation
              
              
              724,902
              
              
              586,508SG&A
              
              
              113,351
              
              
              80,684Other
                  general income
              
              
              (1,436
              )
              
              (8,662
              )Total
                  operating expenses
              
              
              5,783,223
              
              
              9,118,855Operating
                  income
              
              $
              874,856
              
              $
              2,067,468Real
                  estate developmentRevenue
              
              $
              (5,303,303
              )
              $
              1,046,540Operating
                  expensesCost
                  of goods sold
              
              
              (3,470,151
              )
              
              827,489Depreciation
              
              
              6,445
              
              
              6,547SG&A
              
              
              (147,401
              )
              
              119,700Total
                  operating expenses
              
              
              (3,611,107
              )
              
              953,736Operating
                  income (loss)
              
              $
              (1,692,196
              )
              $
              92,804




**Continuing
      Operations**




***Revenues***




Total
      revenues in the three months ended June 30, 2007 decreased by 88.9% to $1.4
      million, compared to $12.2 million in the three months ended June 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 or expected default on twelve condominium units.




Electrical
      construction revenues decreased 40.5%, to $6.7 million for the three months
      ended June 30, 2007 from $11.2 million for the three months ended June 30,
      2006.
      The decrease in revenue for the three month period ending June 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 606.7% to $(5.3 million) for the
      three
      months ended June 30, 2007 from $1.1 million for the like period in 2006. The
      decrease in revenues for the three months ended June 30, 2007, compared to
      the
      like period in 2006, 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 three months ended June
      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 quarter ended June 30, 2007, the only
      project under construction was Pineapple House.




Our
      Pineapple House project began recognizing revenue during the first quarter
      2006
      and was complete as of June 30, 2007.




19


***Operating
      Results***




Total
      operating income (loss) decreased 198.9% to $(1.5 million) for the three months
      ended June 30, 2007, compared to $1.5 million for the like period in 2006.
      Electrical construction operations had an operating income of $875,000 during
      the three months ended June 30, 2007, compared to an operating income of $2.1
      million during the three months ended June 30, 2006, a decrease of
      57.7%.




Operating
      margins on electrical construction operations decreased to 13.1% for the three
      months ended June 30, 2007 from 18.5% for the three months ended June 30, 2006.
      The decrease in operating margins for the three month period ended June 30,
      2007
      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 income (loss) of $(1.7 million)
      in the three months ended June 30, 2007, compared to $93,000 in the three months
      ended June 30, 2006, a decrease of $1.8 million. The operating loss for the
      three months ended June 30, 2007 reflects the reversal of revenues and cost
      of
      sales due to the default on Pineapple House purchase contracts discussed
      above.




***Costs
      and Expenses***




Total
      costs and expenses, and the components thereof, decreased 73.5% to $2.9 million
      in the three months ended June 30, 2007 from $10.7 million in the three months
      ended June 30, 2006.




Electrical
      construction cost of goods sold decreased to $4.9 million in the three months
      ended June 30, 2007 from $8.5 million in the three months ended June 30, 2006.
      The decrease in costs reflects the lower level of construction
      activities.




Real
      estate development cost of goods sold decreased 519.4% to $(3.5 million) in
      the
      three months ended June 30, 2007 from $827,000 in the three months ended June
      30, 2006. The decreased costs primarily reflect 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.




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


2007
              
              2006Electrical
                  construction
              
              $
              724,902
              
              $
              586,508Real
                  estate development
              
              
              6,445
              
              
              6,547Corporate
              
              
              34,423
              
              
              35,065Total
              
              $
              765,770
              
              $
              628,120




The
      depreciation and amortization expense was $766,000 in the three months ended
      June 30, 2007, compared to $628,000 in the three months ended June 30, 2006,
      an
      increase of 21.9%. The increase in depreciation expense is mainly due to an
      increase in capital expenditures in 2006 and the first quarter of 2007,
      primarily within the electrical construction segment. We had $2.8 million in
      capital expenditures within this segment during the six months ended June 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 June 30 as indicated:


2007
              
              2006Electrical
                  construction
              
              $
              113,351
              
              $
              80,684Real
                  estate development
              
              
              (147,401
              )
              
              119,700Corporate
              
              
              640,412
              
              
              619,390Total
              
              $
              606,362
              
              $
              819,774




In
      the
      three months ended June 30, 2007, total SG&A expenses decreased 26.0% to
      $606,000 compared to $820,000 for the three months ended June 30, 2006. The
      decrease in the SG&A expense for the three months ended June 30, 2007 is
      mainly due to a $107,000 decrease in salaries within the combined corporate
      and
      real estate segments, as well as a $174,000 decrease in selling expenses within
      the real estate segment, due to the reversal of previously recognized sales.
      These decreases were partially offset by a $64,000 increase in professional
      services within the corporate segment.




20




***Income
      Taxes***




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


2007
              
              2006Income
                  tax expense (benefit)
              
              $
              (364,815
              )
              $
              609,831Effective
                  income tax rate
              
              
              (24.5%
              )
              
              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 (28.3%). The
      effective tax rate differs from the federal statutory rate of 34% for the three
      months ended June 30, 2007 primarily due to nondeductible expenses such as
      50%
      of meals and officers' life insurance.




**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 June 30, 2007, we had cash and cash equivalents
      of
      $4.5 million and working capital of $13.7 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 have $9.0 million in unused revolving lines of credit
      as of June 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 six month periods ended June 30 were as
      follows:


2007
              
              2006Net
                  cash provided by (used by) operating activities
              
              $
              (1,856,685
              )
              $
              4,658,568Net
                  cash used by investing activities
              
              
              (2,847,238
              )
              
              (1,270,972
              )Net
                  cash provided by (used by) financing activities
              
              
              2,450,514
              
              
              (1,959,408
              )Net
                  increase (decrease) in cash and cash equivalents
              
              $
              (2,253,409
              )
              $
              1,428,188




**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
      used
      in our operating activities totaled $1.9 million in the six months ended June
      30, 2007, compared to cash provided by our operating activities of $4.7 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 $6.5 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 progressed
      toward completion of 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 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.




21




For
      the
      quarters ended June 30, 2007 and 2006, our DSO for accounts receivable were
      57
      and 56, respectively, and our DSO for costs and estimated earnings in excess
      of
      billings on uncompleted contracts were 34 and 22, 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
      July 31, 2007, we have received approximately 72% of our June 30, 2007
      outstanding trade accounts receivable balance. In addition as of July 31, 2007,
      we have invoiced our customers for approximately 36% of the balance in costs
      and
      estimated earnings in excess of billings as of June 30, 2007.




**Investing
      Activities**




Net
      cash
      used in investing activities during the six months ended June 30, 2007 was
      $2.9
      million compared to $1.3 million for the same period in 2006. These purchases
      are mainly attributable to 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
      provided by financing activities during the six months ended June 30, 2007
      was
      $2.5 million compared to cash used by financing activities of $2.0 million
      during the same period in 2006. The increase in cash provided by financing
      activities is mainly due to the borrowings made under our equipment line of
      credit of $2.1 million used for capital expenditures by the electrical
      construction segment and within the real estate segment of $900,000 used for
      the
      development of Pineapple House. These borrowings were partially offset by loan
      repayments of $433,000 on the Equipment Loan. See note 5 of the notes to
      consolidated financial statements for more information regarding these
      borrowings. In addition, we repaid capital lease obligations of $155,000 during
      the six month period ended June 30, 2007. There were no capital lease obligation
      repayments during the six month period ended June 30, 2006.




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 Disclosures 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 June 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.




22




**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 June
      30, 2007. Based upon that evaluation, our management, including our Chief
      Executive Officer and our Chief Financial Officer, concluded that as of June
      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
      second 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 have not completed this process or our assessment, and
      this process will require 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.




**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 June 30, 2007 to provide reasonable
      assurance that the objectives of the disclosure control system were
      met.




23


**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 second quarter of 2007:


**Issuer
                  Purchases of Equity Securities**Period
              
              Total
                  Number of Shares Purchased
              
              Average
                  Price Paid per Share
              
              Total
                  Number of Shares Purchased as Part of Publicly Announced Plans
                  or
                  Programs(1)
              
              Maximum
                  Number of Shares that May Yet Be Purchased Under the Plans or
                  Programs04/1/07-04/30/07
              
              
              -
              
              $
              -
              
              
              -
              
              
              1,154,94005/1/07-05/31/07
              
              
              -
              
              
              -
              
              
              -
              
              
              1,154,94006/1/07-06/30/07
              
              
              -
              
              
              -
              
              
              -
              
              
              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 June 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
      4. Submission of Matters to a Vote of Security Holders**




We
      held
      our Annual Meeting of Stockholders on May 31, 2007. At the Annual Meeting,
      the
      stockholders approved the following proposals listed in our Proxy Statement
      dated April 26, 2007:




I.
            *Election
                of Seven Directors*




The
      number of votes cast or withheld with respect to the election of each of the
      directors is set forth below:




For
            
            WithheldJohn
                H. Sottile
            
            
            20,779,057
            
            
            540,718Thomas
                E. Dewey, Jr.
            
            
            20,680,057
            
            
            639,718Harvey
                C. Eads, Jr.
            
            
            20,685,214
            
            
            634,561John
                P. Fazzini
            
            
            20,679,640
            
            
            640,135Danforth
                E. Leitner
            
            
            20,777,477
            
            
            542,298Al
                M. Marino
            
            
            20,807,425
            
            
            512,350Dwight
                W. Severs
            
            
            20,694,782
            
            
            624,993




There
      were no broker non-votes with respect to the election of directors. There were
      no votes against any of the directors.




24




II.
            *Ratify
                the Appointment of KPMG LLP as the Company’s Independent Registered Public
                Accounting Firm for the Fiscal Year Ending December 31,
                2007*




The
      shareholders also voted to ratify the appointment of KPMG LLP as the Company’s
      independent registered public accounting firm for the year ending December
      31,
      2007 with 21,000,309 votes cast for, 272,945 votes cast against, 46,519 votes
      abstained and 0 broker non-votes.




These
      items were the only matters voted upon at the Annual Meeting.




**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.




25


**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:
              August 14, 2007
            **T****HE****G****OLDFIELD****C****ORPORATION**By:
            /s/**J****OHN****H. S****OTTILE**John
              H. SottileChairman of the Board, President and Chief Executive
              Officer (Principal Executive Officer)





**/s/****S****TEPHEN****R. W****HERRY**Stephen
              R. WherrySenior
                Vice President, Chief Financial Officer, Treasurer and Assistant
                Secretary
                (Principal Financial and Accounting
                Officer)


****


26