U.S. Securities and Exchange Commission
                              Washington, DC 20549
                                    Form 10-Q

(Mark One)
         [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES  EXCHANGE ACT OF 1934 For the quarterly period
                             ended June 30, 1997
        [  ]  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 0-27510

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



State or other jurisdiction of                (IRS Employer  Identification No.)
incorporation or organization)

                          1875 Dobbin Drive, San Jose, CA             95133    
                      (Address of principal executive offices)      (Zip Code)

                                (408) 272-5700
                        Registrant's  telephone number


  (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  report,  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___


APPLICABLE ONLY TO CORPORATE ISSUERS

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. As of July 28, 1997 there were
3,596,332 shares of Common Stock, par value .001, issued and outstanding.





<PAGE>


                             TMCI ELECTRONICS, INC.



             Page

Part I -- FINANCIAL INFORMATION

   Item 1.  Financial Statements
      Historical Financial Statements

       Consolidated Balance Sheets
            December 31, 1996................................................ 3
           
           June 30, 1997..................................................... 3
       Consolidated Statements of Operations
            Quarters Ended June 30, 1997 and 1996............................ 4
       
            Six Months Ended June 30, 1997 and 1996.......................... 4
       
       Consolidated Statements of Cash Flows
            Six Months Ended June 30, 1997................................... 5
            
            Six Months Ended June 30, 1996................................... 5
          
        Notes to Consolidated Financial Statements........................... 6

   Item 2.  Management's Discussion and Analysis............................. 8

Part II -- OTHER INFORMATION

   Item 6.  Exhibit and Reports on Form 8-K................................. 11

   Signature................................................................ 12
       
   Exhibit 11 Computation of Earnings Per Share............................. 13

































<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                   TMCI ELECTRONICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                             June 30,               December 31,
                                               1997                     1996
                                           (Unaudited)
ASSETS:
  Current Assets:
    Cash                                $     29,304               $    145,845
    Accounts Receivable, Net               3,709,036                  2,526,816
    Inventory                              7,532,589                  5,170,661
    Deferred Income Taxes                         --                    272,587
    Prepaid Expenses and Other Current
     Assets                                  348,035                    187,991
    Other Receivables                         60,334                     63,669
    Notes Receivable - Stockholders          204,197                     10,706
                                        ------------               ------------
           Total Current Assets           11,883,495                  8,378,275
                                        ------------               ------------
     
  Property and Equipment,  Net             5,060,791                  3,638,300
                                        ------------               ------------
  Other Assets:
    Notes Receivable - Stockholders               --                    155,520
    Due from Stockholder's                   200,195                    238,167
    Due from Related Party                   484,065                    473,952
    Other Assets                              18,640                     48,152
    Goodwill, Net                          2,812,857                  2,549,261 
                                        ------------               ------------
           Total Other Assets              3,515,757                  3,465,052
                                        ------------               ------------
                  Total Assets          $ 20,460,043               $ 15,481,627
                                        ============               ============ 

LIABILITIES AND STOCKHOLDERS' EQUITY:
  Current Liabilities:
    Accounts Payable and Accrued 
     Expenses                           $  2,733,769               $  2,929,242
    Line of Credit                         2,581,968                    585,000
    Notes Payable - Current Portion          892,274                    796,867
    Due to Affiliate                          30,635                     30,634
                                        ------------               ------------
           Total Current Liabilities       6,238,646                  4,341,743
                                        ------------               ------------
  Long Term Liabilities:
     Notes Payable - Net of Current 
      Portion                              4,110,933                  2,064,273
     Deferred Income Taxes                   468,849                    436,781
                                        ------------                -----------
           Total Long-Term Liabilities     4,579,782                  2,501,054
                                        ------------                -----------
                  Total Liabilities       10,818,428                  6,842,797
                                        ------------                -----------
  Commitment and Contingencies                    --                         --
        

Stockholders' Equity:
  Common Stock - .001 par value, 
   25,000,000 shares authorized,
   3,596,332 issued and outstanding as
   of June 30, 1997 and 3,499,772 as of 
   December 31, 1996                           3,597                      3,500
            
  Additional Paid in Capital               7,666,561                  7,366,659
  Retained Earnings                        1,971,457                  1,268,671
                                        ------------               ------------
           Total Stockholders' Equity      9,641,615                  8,638,830
                                        ------------               ------------

Total Liabilities and Stockholders'     ------------               ------------
  Equity                                $ 20,460,043               $ 15,481,627
                                        ============               ============


                See notes to consolidated financial statements

<PAGE>

                   TMCI ELECTRONICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   [UNAUDITED]
<TABLE>


                                   Three Months Ended             Six Months Ended
                                        June 30,                      June 30,
                                   1997          1996           1997           1996
<S>                              <C>         <C>            <C>            <C>    

SALES,  Net                    $ 9,601,706   $ 7,519,668    $17,044,394    $15,250,133

Cost of Goods Sold               6,254,930     5,022,516     10,858,674     10,419,266
                               -----------   -----------    -----------    -----------
      Gross Profit               3,346,776     2,497,152      6,185,720      4,830,867

Operating Expenses               2,642,883     2,021,379      4,965,912      3,877,773
                               -----------   -----------    -----------    -----------

      Income from Operations       703,913       475,773      1,219,808        953,094
                               -----------   -----------    -----------    -----------

Other Income [Expense]:
      Gain on sale of Equipment         --        14,302             --        136,500
      Life Insurance                    --        (2,291)            --         (2,291)
      Non-cash Finance Charge           --            --             --       (462,122)
      Interest Expense            (118,819)      (59,847)      (234,184)      (200,184)
      Other Income                  38,746         5,545        155,525         39,704
      Interest Income                   --        28,018             --         28,018
                               -----------   -----------    -----------    -----------

      Total Other [Expense]       ( 80,073)      (14,273)       (78,659)      (460,375)
                               -----------   -----------    -----------    -----------

Income Before Provision for 
  Income taxes                     623,840       461,500      1,141,149        492,719

   Provision for Income Taxes      227,916       189,215        438,363        200,090

Net Income                        $395,924      $272,285       $702,786       $292,630
                                  ========      ========       ========       ========

Earnings Per Share:
      Net Income Per Share            $.09          $.08           $.17           $.10
                                  ========      ========       ========       ========

Weighted Average Number of 
Shares and Common Stock
Equivalents                      5,393,166     3,365,600      5,393,166      2,839,886
                                 =========     =========      =========      =========
</TABLE>



















                See notes to consolidated financial statements
<PAGE>

                   TMCI ELECTRONICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   [UNAUDITED]

                                                             Six Months Ended
                                                                 June 30,
                                                                 --------
                                                            1997         1996
Operating Activities                                        ----         ----
      Net Income                                          $702,786     $292,630
      Adjustments to reconcile net income to
      Net cash from operations:
            Depreciation and amortization                  618,096      395,256
            Deferred income taxes                          220,059        9,234
            Gain on sale of equipment                           --     (136,500)
            Non-cash financing charge                           --      462,122
            Amortization of Deferred loan fees                  --       28,500
      Charges in Assets and Liabilities:
      [Increase] decrease in:
            Accounts receivable, trade                    (873,801)   1,875,938
            Inventory                                   (2,136,627)  (1,579,740)
            Prepaid expenses and other  current assets    ( 71,460)    (144,408)
      Increase (decrease) In:
            Accounts payable and accrued expenses         (364,828)  (1,621,746)
            Income taxes payable                            68,394     (121,212)
                                                         ---------    ---------
      Total Adjustments                                 (2,540,167)    (832,556)
 
Net cash provided by (used in) operating activities     (1,837,381)    (539,926)
                                                         ---------    ---------
Investing Activities:
            Proceeds from sales of equipment                   --       193,000
            Purchase of equipment                        (488,605)     (321,689)
            Note receivable - Other                            --        98,898 
            Due from Stockholder                               --       ( 6,134)
            Business acquisition, net of cash acquired (1,109,314)           --
                                                        ---------    ----------

Net cash provided by (used in)  investing activities   (1,597,919)      (35,834)
                                                        ---------    ----------
Financing activities:
            Credit line Advances                        3,703,135     1,381,129
            Credit line Repayments                     (1,759,300)   (1,381,129)
            Debt  repayment                            (2,860,049)     (906,706)
            Repayment of bridge note payable                   --    (1,000,000)
            Proceeds from public offering                      --     5,810,594
            Notes payable proceeds                      4,234,973            --
                                                        ---------     ---------
Net cash provided by (used in)  financing activities    3,318,759     2,259,312
                                                        ---------     ---------

    Net Increase [decrease] in cash                      (116,541)    1,683,552

    Cash - Beginning of period                            145,845       701,672
                                                        ---------     ---------
    Cash  - End of Periods                                $29,304    $2,385,224
                                                        =========     =========




                See notes to consolidated financial statements
<PAGE>


TMCI  ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1)Basis of reporting

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and with the instructions to Form 10-Q. Accordingly,  they
do not include  all of the  information  and  footnotes  required  by  generally
accepted accounting principles for complete financial statements.

In  the  opinion  of  management,   such  statements   include  all  adjustments
(consisting only of normal recurring items) which are considered necessary for a
fair presentation of the financial  position of the Company at June 30, 1997 and
the results of its operations  for the six month period then ended.  The results
of operations for the periods  presented are not  necessarily  indicative of the
results to be expected for the full year.

It is suggested that these financial  statements be read in conjunction with the
financial  statement and notes for the year ended  December 31, 1996 included in
the Company's Annual Report on Form 10-KSB.

The   consolidated   financial   statements   include  the  accounts  of  TMCI
Electronics,   Inc.  ["TMCI"],  and  its  wholly-owned  subsidiaries,   Touche
Manufacturing  Company, Inc. ["Touche"],  Touche Electronics Inc. ["TEI"], and
Enterprise  Industries,   Inc.["EII"],   [collectively,  the  "Company"].  All
significant  intercompany  balances and  transactions  have been eliminated in
consolidation.

2) Income Per Share

Income per share of common  stock is based on weighed  average  number of common
shares  outstanding and common stock equivalents,  if dilutive.  for each period
presented.

3) Inventory

Inventory consists of the following:
                                                  June 30,
                                                    1997
                                                  --------
 
      Raw Materials                              $4,242,291
      Work in process                             2,473,995
      Finished Goods                                816,303
                                                -----------

            Total                                $7,532,589
                                                ----------- 
4)  Acquisition of Business

Effective  January 1, 1997, the Company acquired 100% of the outstanding  shares
of common stock of Enterprise  Industries,  Inc., a North Hollywood,  California
based  metal  stamping  manufacturing  business  for a total  purchase  price of
$1,300,000,  consisting  of $1,000,000 in cash and the issuance of 96,560 shares
of the Company's  common stock.  The Company  acquired  assets of  approximately
$1,499,000  and assumed  liabilities  of  approximately  $323,000  resulting  in
goodwill of approximately $124,000,  which will be amortized over 15 years under
the  straight  line method.  The  acquisition  will be  accounted  for under the
purchase  method.  At the same time,  the  Company  entered  into an  employment
contract with the President of Enterprise.

The following unaudited pro forma consolidated results of operations reflect the
acquisition  as if it had  occurred at the  beginning  of the period  presented.
These pro forma results may not be indicative of the results that actually would
have occurred if the acquisition had been in effect on the date indicated.




<PAGE>

                                                 June 30, 1996
                                                 -------------

Total Revenues                                   $  16,960,930
                                                 -------------

Net Earnings                                     $     400,068
                                                 -------------

Earnings Per Common Share                        $         .14
                                                 -------------

Weighted Average Common Shares Outstanding           2,936,446
                                                 -------------

5)  Arbitration of Pen Interconnect Acquisition

Subsequent  to the closing of the  acquisition  of the San Jose  Division of Pen
Interconnect,  a dispute arose concerning various aspects of the transaction. On
February 14, 1997,  TMCI filed a Demand for Arbitration  against Pen,  seeking a
substantial purchase price reduction or, in the alternative,  other remedies and
damages as  provided  by law.  Management  has  suspended  all  payments to Pen,
including payments due under the promissory notes, aggregating $900,000. Pen has
sought to accelerate the promissory notes.  Management,  after consultation with
legal  counsel,  believes  that it will prevail in all  material  aspects of the
dispute.  Accordingly,  at December 31, 1996 and June 30, 1997,  the Company has
classified  the  promissory  notes as maturing under the original terms provided
therein.  An arbitrator  has been selected and agreed upon by all parties to the
legal proceedings.

















<PAGE>



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

General

      Certain  information  set forth in this report includes  "forward  looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 and is subject to certain  risks and  uncertainties,  including  but not
limited to, the Company's  limited  operating  history,  entry into new lines of
business  and the  uncertainty  of success of its newly  acquired  subsidiaries,
dependence upon major  customers,  risk of inventory  obsolescence,  substantial
competition and dependence  upon a small number of key  executives.  Readers are
cautioned not to place undue reliance on these forward looking statements, which
are made as of the date hereof.  The Company undertakes no obligation to release
any  revisions  to  the  forward   looking   statements  to  reflect  events  or
circumstances  after  the date  hereof  or to  reflect  unanticipated  events or
developments.

Results of Operations

      The results of  operations  utilizes  the  consolidated  results from TMCI
Electronics,  Inc. and its  subsidiaries (  collectively,  the  "Company").  The
discussion below should be read in conjunction with the financial statements and
the notes thereto, that appear elsewhere in this report.

Net Sales

      The  Company's  net sales  increased  approximately  $2,082,000  or 28% to
$9,601,706  from  $7,519,668  in the  second  quarter  ended June 30,  1997,  as
compared  with the  second  quarter  ended June 30,  1996.  The growth in second
quarter sales was due primarily to a significant increase in existing as well as
new customer orders, and the introduction of new product services,  which relies
upon the  health  of the  market  economy,  and the  general  trend  in  product
development  and  demand.  In  contrast,   the  Company's  net  sales  increased
approximately  $1,794,300 or 12% to  $17,044,394  from  $15,250,133  for the six
month period ended June 30,  1997,  as compared  with the six month period ended
June 30, 1996,  reflecting a slow start during the first two months of operation
and lower  comparative  sales results in the first quarter ended March 31, 1997,
as compared with the first  quarter ended March 31, 1996.  The increase in sales
is  primarily  due  to  the  acquisitions  of  wire  cable  and  metal  stamping
manufacturing   businesses  as  new  products  were  included  in   consolidated
operations.

Gross Profit

      The  Company's  gross profit  increased  approximately  $849,600 or 34% to
$3,346,776  from  $2,497,152  in the  second  quarter  ended June 30,  1997,  as
compared with the second  quarter ended June 30, 1996. As a percentage of sales,
the Company's  gross profit  increased  approximately  2% to 35% from 33% in the
second  quarter ended June 30, 1997,  as compared with the second  quarter ended
June 30, 1996. In contrast,  the Company's gross profit increased  approximately
$1,354,853 or 28% to $6,185,720  from  $4,830,867 for the six month period ended
June 30, 1997,  as compared  with the six month period ended June 30, 1996. As a
percentage of sales, gross profit increased approximately 4% to 36% from 32% for
the six month period ended June 30, 1997,  as compared with the six month period
ended June 30, 1996. The second quarter and six month period  increases in gross
profit are primarily due to better production yield and labor efficiencies,  and
the acquisition of wire cable and metal stamping  businesses  which have allowed
the Company to reduce material costs and to tighten controls on costs, which the
Company  has  been  able to  achieve  through  the  successful  acquisition  and
integration  of the wire cable and stamping  manufacturing  businesses  into its
operations.

Operating Expenses

      General and administrative  expenses increased  approximately  $621,500 or
31% to $2,642,883  for the second  quarter ended June 30, 1997, as compared with
the second  quarter ended June 30, 1996.  As  percentage  of sales,  general and
administrative  expenses  increased  approximately  1% to 28%  from  27% for the
second  quarter ended June 30, 1997,  as compared with the second  quarter ended
June 30, 1996. In contrast,  the Company's general and  administrative  expenses
increased approximately  $1,088,139 or 28% to $4,965,912 from $3,877,773 for the
six month  period  ended June 30,  1997,  as compared  with the six month period
ended June 30, 1996.
<PAGE>


As a percentage of sales,  the  Company's  general and  administrative  expenses
increased 4% to 29% from 25% for the six month  period  ended June 30, 1997,  as
compared  with the six  month  period  ended  June 30,  1996.  The  increase  in
operating  expenses was primarily  attributable to the new acquired  businesses:
San Jose Division of Pen Interconnect,  Inc. and Enterprise Industries, Inc. The
impact of these  acquisitions are reflected in increases in personnel,  building
rental costs,  repairs and  maintenance,  promotions and increases in management
positions and other related business operations.

Interest Expense

      The Company's  interest expense for the second quarter ended June 30, 1997
was approximately  $118,800,  representing an increase of approximately  $59,000
over the second quarter ended June 30, 1996. In contrast,  interest  expense for
the  six  month  period  ended  June  30,  1997  was   approximately   $234,200,
representing  an increase of  approximately  $34,000  from the six month  period
ended June 30, 1996. The Company's  interest expense increased during the second
quarter and six month  period  ended June 30,  1997,  due to  increases  in bank
borrowings  in the second  quarter and six month period ended June 30, 1997,  as
compared to the second quarter and six month period ended June 30, 1996.

Other Income [Expense]

      The Company's other expenses  increased  approximately  $66,000 to $80,073
from $14,273 in the second  quarter  ended June 30, 1997,  as compared  with the
second  quarter  ended June 30, 1996.  The increase was  primarily  due to a net
decrease of  approximately  $14,300 on the sale of equipment,  a net decrease of
approximately  $28,000 in interest  income,  and a net increase of approximately
$59,000  in  interest  expenses   recognized,   offset  by  a  net  increase  of
approximately $33,200 in other income. In contrast, the Company's other expenses
decreased  approximately  $381,700 to $(78,659)  from (460,375) in the six month
period ended June 30, 1997, as compared with the six month period ended June 30,
1996.  The  decrease in other  expenses was  primarily  due to a net decrease of
approximately  $462,100 in a one-time  financing  charge on certain bridge loans
that was  incurred  by the  Company  in the  first  quarter  of 1996,  and a net
increase of  approximately  $115,800 in other income,  primarily due to interest
and  rental  income,  and  one  time  refunds  from  utilities,   and  Workmens'
Compensation,  offset by a net decrease of approximately $136,500 on the sale of
equipment,  and a net  decrease  of  approximately  $28,000 in  interest  income
recognized in the six month period ended June 30, 1996.

Net Income

      Net  income  increased  approximately  $123,600  or 45% to  $395,924  from
$272,285 in the second  quarter ended June 30, 1997, as compared with the second
quarter  ended June 30,  1996.  The second  quarter  increase  in net income was
primarily due to: (1) a net increase in income from operations of  approximately
$228,100, and (2) a net increase in other expenses of approximately $65,800, and
offset by a net  increase in the  provision  for income  taxes of  approximately
$38,700. In contrast, the Company's net income increased  approximately $410,200
or 140% to $702,786  from  $292,630 for the six month period ended June 30, 1997
as compared with the six month period ended June 30, 1996.  The six month period
increase in net income was due  primarily  to: (1) a net increase in income from
operations of approximately  $266,700,  and (2) a net decrease in other expenses
of  approximately  $381,700,  and offset by a net increase in the  provision for
income taxes of approximately $238,300.

Liquidity and Capital Resources

      The Company has a long-term  revolving  line of credit with  Manufacturers
Bank  ("Mfrs."),  which was renewed on June 1, 1997 for an additional  year, and
bears  interest at Mfrs.'  base rate plus 1/4%.  This  facility,  which has been
increased by $1,100,000,  allows the Company to borrow up to $5,500,000 based on
a  stipulated  percentage  of  contractually  defined  eligible  trade  accounts
receivable.  The Company had approximately  $2,582,000 in outstanding borrowings
under the line of credit as of June 30, 1997. In addition, the Company and Mfrs.
have  agreed to a term  facility of up to  $4,500,000  available  for  equipment
purchases,  which  will bear  interest  at Mfrs.'  base  fixed rate of 8.75% per
annum. There were  approximately  $3,176,700  outstanding  borrowings under this
facility as of June 30, 1997,  with a remaining  availability  of  approximately
$1,323,300  under the  equipment  line and  approximately  $2,918,000  under the
revolving line of credit at June 30, 1997.


<PAGE>

      The Company's working capital  increased by approximately  $1,608,300 from
$4,036,532  to  $5,644,849  in the six month  period  ended June 30,  1997.  The
increase  resulted  primarily  from  an  increase  in  accounts   receivable  of
approximately  $1,182,200, an increase in inventory of approximately $2,361,900,
an increase in prepaid expenses of approximately  $160,000, an increase in notes
receivable  of  approximately  $193,500,  a  decrease  in  accounts  payable  of
approximately  $195,500,  offset by an increase in short-term bank borrowings of
approximately $1,997,000, and a decrease in cash of approximately $116,500.

      The Company  required cash to fund operating  activities of  approximately
($1,837,400) in the six month period ended June 30, 1997 as compared to required
cash to fund operating  activities of approximately  ($539,926) in the six month
period ended June 30, 1996.  Cash used in investing  and  financing  activities,
includes the purchase of equipment,  debt  reduction,  acquisition of Enterprise
Industries,  Inc.,  note  payable  proceeds,  bank  short-term  borrowings,  and
repayment of bridge note payable, was approximately $1,720,800 and $2,223,500 in
the six months ended June 30, 1997 and June 30, 1996, respectively.

      During the six month  period  ended June 30, 1997 and June 30,  1996,  the
Company spent  approximately  $488,600 and $321,700,  respectively,  to purchase
capital  equipment  which was funded  through  long-term  borrowings and current
operations.  Additionally,  management  expects  the  Company's  level of future
capital  expenditures  to  increase  at a level  that  is  consistent  with  the
Company's  projected  growth and  operations.  Management has projected  capital
expenditure  requirements  of  approximately  $2,000,000  for the calendar  year
ending  December 31, 1997.  This  increase  will be supported by increased  bank
borrowings and internal operations.

      Management believes that its current financial position,  coupled with the
increase in the  Company's  available  borrowings  under its  various  short and
long-term credit  facilities will be sufficient to meet the projected  operating
needs and capital expenditure  requirements through the year ending December 31,
1997.
































<PAGE>


                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K.

(a) This  Report  contains  the  following  Exhibits  as required by Item 601 of
Regulation S-B.

Exhibit                       Description
------                        -----------

11.1                          Computation of Earnings Per Share

27.1                          Financial Data Schedule

(b) No reports on Form 8-K were filed  during the three month  period ended June
30, 1997.









































<PAGE>


                                   SIGNATURES

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


                                                         TMCI Electronics, Inc.
                                                                   (Registrant)



Date:  August 1, 1997                 By:_____________________________________
                                      Charles E. Shaw, Chief Financial Officer
                                           (Principal Financial Officer)




f:\corp\client\touche\tmci\10-qsb


<PAGE>




                             TMCI Electronics, Inc.
                                   Exhibit 11
                        Computation of Earnings Per Share


                                                              Six  Months Ended
                                                                  June 30,
                                                              ----------------- 
                                                              1997         1996
                                                              ----         ----
EPS:

Net Income                                                 $702,786   $ 292,630
                                                          =========   =========

Weighted Average Shares Outstanding                       3,596,332   2,839,886
                                                          =========   ========= 

EPS                                                           $0.20       $0.10
                                                          =========   =========

Primary & Fully Diluted EPS:

Net Income                                                 $702,786   $ 292,630

Additional Net Income due to decrease in
Interest Expense and increase in Interest
Income, net of Income taxes                                 213,974          --
                                                          ---------    --------

Adjusted Net Income                                        $916,760    $292,630
                                                          =========    ========

Weighted Average Number Shares Outstanding and
Common Stock Equivalents                                  3,515,829   2,839,886

Equivalent Shares Outstanding assuming
exercise of the Options and Warrants under
the modified Treasury Stock method                        1,796,834          --

Shares held in escrow in connection
with acquisition                                             80,503          --
                                                          ---------   ---------
Total Weighted Shares Outstanding
and Common Stock Equivalents                              5,393,166   2,839,886
                                                          =========   =========

Primary & Fully Diluted EPS                                   $0.17       $0.10
                                                          =========   =========


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