SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C 20549

                                FORM 10-K 

(Mark one) 
_X_  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
     ACT OF 1934 (FEE REQUIRED) 

For the fiscal year ended________September 30, 1995_____________________________
                                    OR
__TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from____________to____________________________________

Commission file number__________________0-10976_________________________________

_______________________________Microwave Filter Company, Inc____________________
           (Exact name of registrant as specified in its charter)

__________New York__________________________16-0928443__________________________
(State or other jurisdiction of incorporation or organization)
                                            (I.R.S. Employer Identification No.)

_____6743 Kinne Street,  East Syracuse, NY________13057_________________________
(Address of principal executive offices)          (Zip code)

Registrant's telephone number including area code____(315) 437-3953_____________

Securities registered pursuant to Section 12(b) of the Act:_____None____________

Securities registered pursuant to Section 12(g) of the Act:

                           
_________________________Common stock, par value $.10 per share_________________
                              Title of class

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

YES __X__  NO____

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.__ 

  The aggregate market value of the voting stock held by non-affiliates of the 
registrant based upon the average bid and asked prices of such stock at the 
close of business on  November 30, 1995  was $2,851,183. 

  Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date. 

  Shares of common stock outstanding at November 30, 1995:  3,323,482

  Documents incorporated by reference: None.

  Total number of pages included in Form 10-K are: 41
<PAGE>

                           PART I 
                                
ITEM 1. BUSINESS.

GENERAL DEVELOPMENT OF BUSINESS
-------------------------------
  Microwave Filter Company, Inc. (hereinafter referred to as MFC) was 
incorporated in New York State on September 26, 1967.  MFC is the successor of 
Microwave Filter Company which was founded in April of 1967. 

  On July 1, 1990, MFC acquired Niagara Scientific, Inc. (hereinafter referred 
to as NSI.) 

  MFC and its subsidiaries are sometimes referred to collectively as the 
"Company."

NARRATIVE DESCRIPTION OF BUSINESS
----------------------------------
Microwave Filter Company, Inc. (MFC)

  MFC designs, develops, manufactures and sells passive electronic filters, both
for radio and microwave frequencies, to help process signal distribution and to 
prevent unwanted signals from disrupting transmit or receive operations.  
Markets served include cable television, television and radio broadcast, 
satellite broadcast, mobile radio, commercial and defense electronics. 

  The company actively produces over 1,700 standard products and has designed 
an additional 4,500 custom products for specialized applications. 

  Four basic filter types comprise the building blocks for interference 
filters. 

  Low Pass Filters - Low pass filters have a designed "cutoff" frequency: all 
lower frequencies pass through the filter undiminished while higher 
frequencies are blocked. These filters may be used to protect a receiver from 
a wide range of higher, interfering frequencies.  They may be used to block 
out higher order harmonics or simply preselect a band of desired frequencies. 

  High Pass Filters - High pass filters also have a designed "cutoff" 
frequency, but their pass and block functions are reversed; all lower 
frequencies are blocked while all higher frequencies pass through the filter 
undiminished.  These filters are often used to protect a receiver from a wide 
range of lower, interfering frequencies. 

  Bandpass Filters - Bandpass filters pass a "window" of frequencies - a 
continuous segment of the radio frequency spectrum.  They reject all 
frequencies outside this window. 

  Band Rejection Filters - Band rejection filters have the reverse function of 
a bandpass filter; they reject all frequencies in a continuous "window" of the 
radio frequency spectrum and pass all higher and lower frequencies.  They may 
be used to remove several interfering frequencies when these are grouped in a 
limited portion of the radio frequency spectrum.  A band reject filter also 
removes a band of frequencies for the reinsertion of new programming on the 
same band of frequencies. 

                              2
<PAGE>

  Filter Networks - The company is often called upon to design filter networks 
to meet complex interference problems.  Each filter network utilizes the basic 
filters described in the preceding paragraphs, connected according to certain 
mathematical equations, to solve complex interference problems. 

  MFC's reputation for product service and quality has encouraged customers to 
engage us for their custom filters and program requirements.  Utilizing a well 
equipped design test facility within a 40,000 square foot physical plant, MFC 
offers a full range of production capability for large and small orders.  We 
also provide military specifications and quality assurance programs. 

  MFC formed the Comband Division in January 1993 after it purchased the CT-
1000 addressable converter product line from Comband Technologies, Inc., 
Chesapeake, Va. to expand business in one of its growing markets, Wireless 
Cable.  The CT-1000 system encrypts and authorizes programming and pay-per-
view events to subscribers.  The product line is the culmination of many years 
of design initiated by General Electric, Portsmouth, Va.  It consists of four 
parts: 

  1.  A Management Computer System (MCS) packages combinations of channels and 
provides management report functions. 

  2.  A PC based system controller, installed at the transmission site, accepts 
information downloaded from the MCS and drives one or more encoder/modulators. 

  3.  The encoder/modulators scramble the programming for broadcast using 
combinations of six randomly selected modes. 

  4.  An addressable converter box in the subscriber's home, decodes the signal 
using the patented digital data, transmission standard and insures that the 
right programming is received. 

  Introduction of the CT-1000 is a departure from MFC's traditional style of 
manufacturing passive products, which require no electricity for operation, to 
active circuitry systems, which require power.  The purchase of the CT-1000 
product line was a natural move for MFC, which has developed products for the 
Wireless Cable industry since the mid 70's. 

  New products were added to the Comband product line in 1995.  The CT-1100 
Super Cypher Multi-tier Broadband System was developed as a low cost 
descrambling alternative to the CT-1000 Addressable Converter for receiving 
Wireless Cable programming.  Customers are afforded a system which descrambles 
programming for all televisions within a household.  The system is addressable 
but does not offer the pay-per-view feature of the CT-1000. 

Niagara Scientific, Inc. (NSI) 
------------------------------

  NSI also includes niche markets in its customer base: industrial customers 
not addressed by larger competitors and larger customers having special needs. 

  Schroeder Machine Division (SMD) - A leading activity is custom designing 
case packing machines to automatically pack products into shipping cases.  
Customers are processors of food and other commodity 

                              3
<PAGE>

products with a need to reduce labor cost with modest investment and quick 
payback. Operations are also characterized by repeat orders as customer 
production expands.  "Smart" machines range from video inspection machines to 
the Model 8000 automatic flexible bag packing machine. 

MARKETS 
-------
Microwave Filter Company, Inc. (MFC) 
------------------------------------

  Cable Television (CATV) - MFC serves this industry largely with three product 
groups.  One popular area includes standard and custom filters used at the 
headend to process signals and remove interference.  A very popular 
application involves removing or re-routing channels to organize programming 
line-ups. 

  A family of trap filters, "Fastrap," is used by cable operators to restrict 
or permit the viewing of pay per view or other premium programming.  The traps 
can be ordered in small and large quantities, are 100% inspected and delivered 
overnight.  Since all operators initially receive programming via satellite, 
products from our satellite market cross over into cable television.  C-band 
satellite receive systems are prone to various types of terrestrial 
interference which are curable in many cases by applying filters. 

  Cable television is a dynamic industry which has more than doubled in size 
over the last 10 years.  In 1982 there were 4,825 operating systems serving 21 
million subscribers.  In 1995, there were 11,351 operating systems serving 
56.5 million subscribers. 

  Many challenges will face the cable industry in the next decade and several 
new directions have been forged.  Many multiple system operators have replaced 
coaxial cable with fiber optics in anticipation of delivering 500 channels of 
programming.  A race has started among manufacturers to make equipment 
available that will deliver television in digital rather than analog format.  
These technological changes will turn television into an interactive tool from 
a passive entertainment vehicle. Cable television will deliver more than just 
programming for leisurely viewing in the future.  Along with telephone 
companies and other competitors, it is destined to provide two-way interactive 
services that consumers will strongly depend upon for everyday needs. 

  Cable television was reregulated in 1992 to encourage competition from other 
service providers and to keep cable rates at reasonable price levels.  In 
response, cable companies have consolidated operations to trim back costs so 
they can implement new technology in their systems and still remain fiscally 
strong while competing against other television service providers.  Digital 
technology is the wave of the future.  Nearly every subscription television 
service will implement this technology which will offer an extremely large 
number of channels for a variety of applications. 

  Competition for multichannel television service will increase from other 
sources.  This decade will continue to see the growth of other options such as 
Wireless Cable, Direct Broadcast Satellite and TVRO.  These changes represent 
opportunities for Microwave Filter for new filter applications engendered by 
an atmosphere of healthy competition. 

                              4
<PAGE>

  Broadcast - There are several areas of broadcast served by MFC.  Wireless 
Cable represents the largest growth area. There are currently 190 operating 
Wireless Cable systems in the U.S. serving 750,000 subscribers.  In 1994, 
there were 165 systems serving 600,000 subscribers.  There are 4 million 
Wireless Cable subscribers worldwide. 

  Wireless Cable is a multichannel subscription television service that is a 
competitor to cable television.  This service delivers programming over-the-
air using microwave frequencies.  Television programming is received at 
customer sites via a small rooftop antenna.  The signals are then 
downconverted for reception at the viewers' television sets. There is no 
discernible difference between cable and wireless with respect to equipment 
installed in subscribers' homes.  This service differs from cable television 
by its delivery method and that it offers fewer channels. Currently, over 33 
channels can be delivered by Wireless Cable.  Digital compression techniques 
can increase these channels eight fold. 

  The most significant product sold to this market is our channel combiner used 
at the broadcast site to reduce tower costs.  By combining channels at the 
transmitter, additional expensive coaxial or waveguide runs up the tower 
become unnecessary. 

  MFC offers the widest selection of channel combiners to meet a variety of 
system specifications.  Combiners in different configurations and constructed 
of different materials offer the operator better or best options depending on 
budget or other system requirements. 

  New in 1995 is the Model 13000 Micro "Q" Series the "Notebook," a low power 
semi-adjacent channel combiner that is low cost, compact, lightweight, 
stackable and easy to install.  A rack mount version of this product is also 
available. 

  The Comband CT-1000 Addressable Converter System is an analog scrambling 
system designed for wireless TV.  In 1994, an order, in excess of $1 million, 
to be shipped over a five year period, was received from Northwest Cable 
Network in Yakima, WA.  The CT-1000 has the capability to scramble a total of 
62 MMDS and UHF low power television channels. This year expanded sales 
efforts into Canada were made due to this new capability. 

  In 1994 MFC and Zenith Electronics Corp. were among five manufacturers 
selected by the largest wireless cable television company in the U.S., 
American Telecasting, Inc., (ATI) of Colorado Springs, CO, to form an alliance 
to develop digital technology for delivering video programming. Several field 
tests were completed successfully in 1995 indicating that this new technology 
will be implemented sometime in 1996 among ATI systems.  The plan is to enable 
customers to receive over-the-air delivery of 150 to 300 channels including 
near video-on-demand pay-per-view movie offerings.  Efforts will also be 
directed toward wireless telephone service and interactive-based services.  
MFC combiners will be used exclusively in this project. 

  LPTV - Low Power Television or LPTV is becoming popular in the US as a 
multichannel subscription television service.  A system similar to Wireless 
Cable can be configured that will deliver channels of programming to areas 
where off air signals cannot be received.  The only difference between both 
services 

                              5
<PAGE>

is broadcast frequency and the type of antenna located at the subscriber's 
home.  An LPTV receive antenna would look like any other off air broadcast 
antenna in contrast to the microwave antenna used for Wireless Cable. LPTV 
frequencies are easier to obtain and there are more LPTV than Wireless 
channels available.  Channels of programming can be scrambled using the CT-
1000 addressable converter in the same manner as for Wireless Cable.  In fact, 
due to the limited number of Wireless Cable frequencies, Wireless Cable 
operators are using a combination of Wireless and LPTV frequencies to increase 
the number of channels offered to their subscribers.  As a broadcaster, LPTV 
differs from traditional television only in broadcast power.  With lower 
broadcast power, the service has a smaller reception area than high power 
broadcast stations.  The industry has grown significantly since 1990 when 
there were only 807 stations in service.  There are currently 1,782 low power 
television systems in the U.S., representing a 120% increase since 1990.  UHF 
LPTV service is growing in popularity as an over-the-air multichannel 
television service because channel licenses are more available than channels 
in other bands. 

  Microwave Filter provides channel combiners and interference filters for this 
industry.  The channel combiners are used to group channels and eliminate 
additional coaxial runs to the broadcast tower.  Filters are also used in 
broadcast equipment to eliminate interference. As mentioned earlier, the CT-
1000 addressable converter system can now be used to organize subscription 
television services among LPTV or hybrid LPTV/MMDS television systems. 

  MFC was privileged to provide channel combiners to one of the largest UHF 
television systems in the U.S. in 1995.  Two LPTV systems, Alaskan Choice 
Television, were built in Fairbanks and Anchorage.  The Fairbanks system, 
reputed to be the largest in the country and perhaps even the world, will have 
25 channels while Anchorage will have 16.  MFC was selected as a vendor for 
the project because of its reputation for quick delivery.  The product MFC is 
providing is the channel combiner. 

  Radio and Television Broadcast - MFC primarily serves these broadcast areas 
with interference filters to reduce equipment harmonics.  An example is high 
power high Q cavity filters developed for interference applications.  There 
was relatively small growth in the radio sector in 1995. Currently there are 
12,012 radio stations versus 11,739 in 1994.  Television stations experienced 
an even smaller growth.  There are 1,532 stations in operation.  Last year 
there were 1,512 stations in operation. Other broadcast areas served also 
include AML, telemetry and STL/ENG relays. 

  Similar to cable television, the broadcast industry is also moving towards 
the digital delivery of both audio and video broadcast. 

  Satellite - Filters and traps for removing interference are provided to both 
commercial and home C-band TVRO antennas.  A variety of products are available 
that offer protection and or solutions to interference that affects the 
feedhorn, downconverter, and receiver.  There are now over 3.8 million C-band 
satellite dishes installed at businesses and private homes.  A variety of 
filters are also available for satellite services utilizing higher frequency 
bands such as 12, 13 and 18 GHz.  Use of satellite services has become more 
prevalent for transmitting business data. 

  Direct Broadcast Satellite or DBS has become a competitor to cable 
television.  DBS is a version of home satellite programming delivered direct 
to the home.  It differs from C-band TVRO by the size of the receive antenna.  
DBS broadcasts at a higher frequency requiring a smaller satellite dish than 
C-band
                              6
<PAGE>

TVRO.  Many satellite dealers have become involved in marketing DBS services 
because consumer trends indicate that providing a variety of television 
service options are important to business survival. 

  Mobile Radio - MFC provides filters to a variety of mobile radio services 
such as cellular telephone, two way radio and paging to eliminate interference 
in transmit or receive equipment.   "High Q" filters have become widely 
accepted by the market.  With the number of services increasing and our air 
waves becoming more congested, filters increasingly are important to many 
transmit operations.  Cellular telephone has been the largest mobile radio 
growth market. In 1985, there were 65 operating systems and currently there 
are 1,581.  The Cellular market is beginning to level off and now Personal 
Communications Services (PCS) is an area of mobile radio on the rise.  In 1996 
MFC plans to design and to reintroduce a full line of products for PCS and 
other mobile radio services that will be used for transmit and receive 
operations. 

  Microwave and RF - This market encompasses both commercial and military 
applications.  Filters in defense applications are used for such purposes as 
air to ground communications, radar and land communications.  In commercial 
areas, filters are used to protect such equipment as receivers, transmitters, 
transceivers and any other electronics used for signal processing. MFC also 
has a line of couplers.  In addition to filters, this market is also served 
with MFC's Ferrosorb product line.  Ferrosorb is a microwave absorbing 
material available in sheets, loads and a variety of other shapes.  The 
product is used to offer protection by shielding signals or absorbing 
selective bands. 

  In 1992, MFC's acquisition of certain assets of Chesterfield Products added 
an expanded line of products to enhance the RF filter line.  Many of MFC's 
traditional filters are components added onto a system.  Chesterfield provided 
MFC with the capability to manufacture miniature and subminiature filters 
which are components built into electronic systems.  Another Chesterfield 
capability has provided us with the resources to expand our filter design 
range down to 5 KHz. 

  Although defense spending will continue to decline over the next several 
years, there appears to be a shifting from military into commercial markets 
which shows great promise for expansion in the years ahead. 

  In 1995 MFC successfully increased activities to acquire additional original 
equipment manufacturer (OEM) accounts. Several existing accounts with 
communications equipment manufacturers were also bolstered due to the efforts 
of a new full time sales manager with an engineering background hired early in 
1995. 

  In April, the Government and Space Technology Group (GSTG) of Motorola 
presented MFC with its Outstanding Supplier Award.  The award was in 
recognition of MFC's commitment to quality, on-time delivery and total 
customer satisfaction. 

Niagara Scientific, Inc. (NSI)
------------------------------

  NSI - Like MFC, NSI and its divisions seek niche markets arising from certain 
demographic changes in the industrial work force which promotes acceptance of 
automation in both large and small factories.  NSI's typical product is 
customized to the purchaser's operation and is the result of system 
engineering.  The product makes tactical use of precision mechanical movements 
or sensors of physical characteristics 

                             7 
<PAGE> 

under microprocessor control.  These smart machines reduce labor costs through 
faster operation and increased quality. 

  Typical customers for case packing machines are food processors or makers of 
cosmetics, pharmaceuticals, candies or hardware whose product must be cased 
for shipping and storage.  Recent customers for typical machines include 
DuPont, Knorr and Planters-Lifesavers. 

  Other custom equipment is designed for inspection-rejection, counting, 
analyzing or otherwise monitoring, reporting or controlling a continuous 
manufacturing or industrial process. 

  Typical customers are commodity mass producers in the food, drug and paint 
industries. 

WORLD TRADE 
-----------

  Management believes that world marketing is a route to substantial expansion 
of sales for MFC/NSI.  Preliminary results of a pilot program indicate that 
export opportunities for MFC's communication related products are many - 
especially in developing countries and Europe, where the general government 
monopoly of all broadcasting is yielding to private ownership.  While some new 
products would facilitate entry to certain markets, there are a large number 
of areas where the company's existing products are in demand such as in the 
Pacific Rim and South America. Besides wider sales, the project has discovered 
many other trade opportunities, such as joint ventures which have the 
possibility of expanding domestic sales with modest capital investment. 

  NSI products are less suitable for export for a number of reasons, including 
their large size and complexity, less demand in underdeveloped areas for 
automation and significant local competition.  However, NSI is well qualified 
to produce and or distribute complementary products under license. SUPPLIERS 

  The Company purchases its raw materials and components from a variety of 
vendors.  Generally, there are multiple sources for such raw materials and 
components. 

PATENTS AND LICENSES 
--------------------

  In connection with its purchase of the Comband CT-1000 product line, MFC 
acquired, either exclusively or jointly with another party, five patents.  The 
patents relate to various segments of the CT-1000 system.  The issue dates of 
such patents range from 1985 to 1992.  The Company has no other patents, 
trademarks, copyrights, licenses or franchises of material importance. 

SEASONAL FLUCTUATIONS 
---------------------

  There are no significant seasonal fluctuations in the Company's business. 

GOVERNMENT CONTRACTS 
--------------------

  The Company is not dependent in any material respect on government 
contracts. 

                             8
<PAGE>

BACKLOG 
-------

  At September 30, 1995, the Company's total backlog of orders was $1,693,786 
compared to $1,822,611 at September 30, 1994  At September 30, 1995,  MFC's 
backlog of orders was $1,275,285 compared to $1,635,646  at September 30, 
1994.  At September 30, 1995, NSI's backlog of orders was $418,501 compared to 
$186,965 at September 30, 1994. Approximately 85% of the Company's backlog at 
September 30, 1995 is scheduled to ship during fiscal 1996. 

EMPLOYEES
---------

  At September 30, 1995, the Company employed 79 full-time permanent 
employees,  5  part-time permanent employees, and 5 full-time temporary 
employees. 

RESEARCH AND DEVELOPMENT 
------------------------

  The Company maintains and expects to continue to maintain an active research 
and development program.  The Company believes that such a program is needed 
to maintain its competitive position in existing markets and to provide 
products for emerging markets.  Costs in connection with research and 
development were $408,425 $442,228 and $454,700 for the fiscal years 1995, 
1994 and 1993, respectively. Research and development costs are charged to 
operations as incurred. 

MANUFACTURING 
-------------

  Products are produced by small teams specializing in product or customer 
type.  A full range of internal core facilities support the work of these 
teams to minimize dependence on outside facilities and to minimize customer 
order delivery time.  These consist of machine, metal forming and brazing 
shops, engraving and label making, electrical test and mechanical inspection 
facilities, product finishing and packing and a documentation center for 
export shipping. 

ENGINEERING 
-----------

  Combined MFC/NSI engineering facilities require few outside services which 
minimizes new product development cycles.  Facilities include computer-aided 
circuit design capable of product performance simulation.  It is used for both 
physical product development and for customer quotation preparation.  
Engineering work stations and AutoCad drafting terminals are linked by a 
plant-wide Local Area Network. Extensive electrical test equipment includes 
modern recording network analyzers with provisions for microprocessor control 
to collect extensive test data automatically, when desired.  A specially 
staffed computer programming center provides systems of programs for various 
business and technical functions.  A high power Radio Frequency test lab and 
environmental test chamber permit product testing under realistic conditions.  
Equipment for mechanical stress testing is also included.  An anechoic test 
chamber facilitates antenna measurement tests on relay antennas developed for 
the Wireless Cable market. Additionally, extensive nearby university and 
industrial facilities provide service for a spectrum of additional types of 
testing. 

ITEM 2. PROPERTIES. 

  MFC's office and manufacturing facility is located at 6743 Kinne Street, East 
Syracuse, New York.  This facility, which is beneficially owned by MFC, 
consists of 40,000 square feet of office and 

                             9
<PAGE>

manufacturing space located on 3.7 acres.  MFC presently occupies approximately 
35,000 square feet with the balance (approximately 5,000 square feet) occupied 
by NSI. 

  MFC's purchase of the facility was financed through the issuance of Onondaga 
County Industrial Revenue Bonds. Because of the manner in which the 
transaction was structured and in order to afford MFC certain sales and real 
property tax abatements, record title to the facility is held by the Onondaga 
County Industrial Development Agency (OCIDA).  MFC leases the facility from 
OCIDA for nominal rent and, upon repayment of the bonds, is required to 
purchase the facility from OCIDA for $1.00. 

ITEM 3. LEGAL PROCEEDINGS. 

  There are currently no material pending legal proceedings against the company 
or its subsidiaries. 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 

  During the fourth quarter of the fiscal year covered by this Form 10-K, there 
were no matters submitted to a vote of security holders. 

                             10
<PAGE>

                           PART II 
                                 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

  MFC's common stock is traded on the NASDAQ over-the-counter market under the 
symbol MFCO.  The information set forth was obtained from statements provided 
by the NASD. The following table shows the high and low bids for MFC's common 
stock for each full quarterly period within the two most recent fiscal years.  
The quotations represent prices in the over-the-counter market between dealers 
in securities.  They do not include retail mark-up, mark-down or commission 
and do not necessarily represent actual transactions. 


                                        Bid 
Fiscal 1995                        High      Low 

Oct. 1, 1994 to Dec. 31, 1994   $  1.19   $  .84 
Jan. 1, 1995 to Mar. 31, 1995      1.19      .95 
Apr. 1, 1995 to June 30, 1995      1.50     1.13 
July 1, 1995 to Sept. 30, 1995     1.81     1.19 


Fiscal 1994                        High      Low 

Oct. 1, 1993 to Dec. 31, 1993   $   .90  $   .57 
Jan. 1, 1994 to Mar. 31, 1994      1.31      .71 
Apr. 1, 1994 to June 30, 1994      1.43     1.01 
July 1, 1994 to Sept. 30, 1994     1.31      .95 

Adjusted for all stock dividends. 

  The approximate number of stockholders on  September 30, 1995 was 1,700. 

  On January 11, 1995, the Board of Directors declared a 5% per share stock 
dividend to shareholders of record on February 1, 1995, to be distributed on 
February 14, 1995. Fractional shares were paid in cash. 

  On December 1, 1993, the Board of Directors declared a 5% per share stock 
dividend to shareholders of record on December 29, 1993, to be distributed on 
January 28, 1994. Fractional shares were  paid in cash. 


                             11
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

  The following selected financial information is derived from and should be 
read in conjunction with the financial statements, including the notes 
thereto, appearing in Item 8. - "Financial Statements and Supplemental Data." 


Five Year Summary Of Financial Data 
<TABLE>
<CAPTION>
                                                           September 30 
                                     1995         1994         1993          1992           1991
<S>                              <C>          <C>          <C>           <C>           <C>
Net Sales                        $ 7,655,198  $ 8,616,861  $ 6,814,329   $ 7,254,364   $  6,286,542
Net Income (loss)(1)             $    19,164  $   117,529  $  (118,330)  $   107,881   $    145,050
Earnings (loss) Per Share        $       .01  $       .04  $      (.03)  $       .03            .04
Weighted Average Number of
Common Shares Outstanding*(2)      3,312,810    3,341,831    3,402,921     3,760,843      3,675,561
Cash ($) or Stock (%) Dividends*          5%           5%           5%   $       .04            10%
Total Assets(2)                  $ 5,273,931  $ 5,597,991  $ 4,761,044   $ 5,250,619   $  5,358,381
Long Term Debt                   $   439,545  $   583,354  $   251,298   $   316,032   $    350,537
*Adjusted for all stock dividends.


Net income (loss) as a percentage of:   1995         1994         1993          1992           1991
Sales.............................       0.3          1.4        (1.7)           1.5            2.3
Assets............................       0.4          2.1        (2.5)           2.1            2.7
Equity............................       0.5          3.3        (3.4)           2.7            3.7

</TABLE>

(1) In the fourth quarter of 1993, the Company recorded an expense of 
approximately $336,000 consisting principally of the writedown of certain 
inventory items and a receivable. 

(2) On February 26, 1993 the Company purchased 505,598 shares of stock at $1.055
per share in settlement of a $72,000 note receivable and paying cash in the 
amount of $461,409. 

                             12
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS 

RESULTS OF OPERATIONS
---------------------

  The following table sets forth the Company's net sales by product group for 
each of the fiscal years in the three year period ended September 30, 1995. 

Product group  (in thousands)    Fiscal 1995   Fiscal 1994   Fiscal 1993
Niagara Scientific                  $826         $1,120         $686
Microwave Filter:
  Cable TV                         3,223          3,672        3,731
  Broadcast TV                     1,959          2,087        1,283
  RF/Microwave                     1,226          1,336          892
  Comband (1)                        318            265           71
  Satellite Communications           103            137          151
Total                             $7,655         $8,617       $6,814

Sales backlog at 9/30             $1,694         $1,823         $655
  (1) in January of 1993, Microwave Filter Company acquired the CT-1000 
wireless cable product line from Comband Technologies, Inc. of Chesapeake, 
Virginia. 

Fiscal 1995 compared to Fiscal 1994

  The company's net sales decreased $961,663 or 11.2% to $7,655,198 during 
fiscal 1995 when compared to fiscal 1994. 

  The company's net income decreased $98,365 or 83.7% to $19,164 during fiscal 
1995 when compared to fiscal 1994. The decrease in net income can primarily be 
attributed to the decrease in sales. 

  Microwave Filter Company (MFC) sales decreased $667,679 or 8.9% to $6,828,949 
during fiscal 1995 when compared to sales of $7,496,628 during fiscal 1994.  
The decrease in sales can primarily be attributed to the downturn in both the 
cable TV market and the wireless cable TV market during 1995 and to (a lesser 
extent) competition. 

  MFC's Cable TV product sales decreased $448,681 or 12.2% to $3,223,421 during 
fiscal 1995 when compared to sales of $3,672,102 during fiscal 1994.  The 
decrease in sales can be attributed to market conditions and competition.  A 
dip in sales rather than projected growth greeted equipment manufacturers and 
suppliers to the Cable Television Industry in 1995.  Plans in the Telephone 
industry to install broadband networks for future delivery of video were 
stalled.  Cable systems went through a period of reorganization.  Many mid 
sized cable systems were sold to large operators who consolidated staffs.  
Large operators were also busy this year streamlining their organizations to 
increase the bottom line.  The trend towards digital delivery of television 
also caused many cable systems to wait and see what new equipment will enter 
the market instead of investing in equipment that may soon be obsolete. 

  MFC's Broadcast TV product sales decreased $128,089 or 6.1% to $1,958,771 
during fiscal 1995 when compared to sales of $2,086,860 during fiscal 1994.  
The decrease in sales can be attributed to market conditions and competition. 
Consolidation was also a trend in the Wireless Cable industry during 1995.  
Many systems were bought and sold stalling the purchase of new equipment.  
Industry experts expect that the situation is short term and that operators 
will move forward in building their systems once the acquisitions are complete.
In general the Wireless Cable industry is robust because financing has 

                             13
<PAGE>

become available and Baby Bells have been investing in systems.  The new year 
is expected to be a healthy one for the industry. 

  MFC's RF/Microwave product sales decreased $80,433 or 6% to $1,255,450 during 
fiscal 1995 when compared to sales of $1,335,883 during fiscal 1994.  The 
decrease in sales can primarily be attributed to competition. 

  MFC's Comband product sales increased $52,713 or 19.9% to $318,025 during 
fiscal 1995 when compared to sales of $265,312 during fiscal 1994.  The 
increase in sales can be attributed to a new installation during fiscal 1995. 

  Niagara Scientific Inc. (NSI), a wholly owned subsidiary, sales decreased 
$293,984 or 26.2% to $826,249 during fiscal 1995 when compared to sales of 
$1,120,233 during fiscal 1994.  The decrease in sales can primarily be 
attributed to competition. 

  As a percentage of sales, the Company's cost of goods sold was 64.5% in 
fiscal 1995 compared to 63.2% in fiscal 1994. Cost of goods sold decreased 
$508,904 or 9.3% to $4,936,219 during fiscal 1995 when compared to fiscal 1994. 
The increase in cost of goods sold as a percentage of sales can primarily be 
attributed to lower average selling prices due primarily to competition and an 
increase in the manufacturing costs associated with new product development 
during fiscal 1995. The dollar decrease in cost of goods can primarily be 
attributed to the decrease in sales. 

  Selling, general and administrative expenses decreased $302,350 or 10.1% To 
$2,687,260 during fiscal 1995 when compared to fiscal 1994.  The decrease in 
S,G & A expenses during fiscal 1995 can be attributed to planned expense 
reductions.  As a percentage of sales, selling, general and administrative 
expenses increased to 35.1% in fiscal 1995 when compared to 34.7% in fiscal 
1994 due primarily to the decrease in sales. 

Fiscal 1994 Compared To Fiscal 1993 
-----------------------------------

  Both sales and earnings increased during fiscal 1994 when compared to fiscal 
1993. 

  The Company's net sales increased $1,802,532 or 26.5% to a record $8,616,861 
during fiscal 1994 when compared to fiscal 1993. The Company's net income 
increased $235,859 or 199% to a net income of $117,529 during fiscal 1994 when 
compared to a net loss of $118,330 during fiscal 1993. The increase in net 
income can primarily be attributed to the increase in sales. 

  Microwave Filter Company (MFC) sales increased $1,367,914 or 22.3% to 
$7,496,628 during fiscal 1994 when compared to sales of $6,128,714 during 
fiscal 1993. 

  MFC's Broadcast TV product sales increased $804,013 or 62.6% to $2,086,860 
during fiscal 1994 when compared to sales of $1,282,847 during fiscal 1993. The 
increase in sales can be attributed to the growth of the Wireless Cable TV 
market. 

  MFC's Cable TV product sales decreased $58,944 or 1.6% to $3,672,102 during 
fiscal 1994 when compared to sales of $3,731,046 during fiscal 1993. The 
decrease in sales can primarily be attributed to a decrease in the sales of pay 
TV security traps to overseas customers. MFC's international sales decreased 

                             14
<PAGE>

$100,881 to $517,191 during fiscal 1994 when compared to international sales of 
$618,072 during fiscal 1993. 

  MFC's RF/Microwave product sales increased $443,014 or 49.6% to $1,335,883 
during fiscal 1994 when compared to sales of $892,869 during fiscal 1993.  The 
increase in sales can be attributed to an increase in sales to the US 
government. 

  COMBAND product sales increased $194,106 to $265,312 during fiscal 1994 when 
compared to fiscal 1993. The increase can be attributed to an agreement with 
Northwest Cable Network to purchase the CT-1000 addressable converter system 
for its Wireless Cable service in Yakima, Washington. Installation began in 
March of 1994 and the agreement will be completed over a five year period. 

  Niagara Scientific Inc. (NSI), a wholly owned subsidiary, sales increased 
$434,618 or 63.4% to $1,120,233 during fiscal 1994 when compared to sales of 
$685,615 during fiscal 1993. The increase in sales can primarily be attributed 
to the improvement in the economy. 

  As a percentage of sales, the Company's cost of goods sold was 63.2% in 
fiscal 1994 compared to 60.6% in fiscal 1993. Cost of goods sold increased 
$1,318,669  to $5,445,123 during fiscal 1994 when compared to fiscal 1993. The 
increase in cost of goods sold as a percentage of sales can primarily be 
attributed to competition and product sales mix. The dollar increase in cost of 
goods sold can primarily be attributed to the increase in sales. 

  Selling, general and administrative expenses increased $124,421  or 4.3% to 
$2,989,610 during fiscal 1994 when compared to fiscal 1993. The increase can be 
attributed to an increase in legal costs during fiscal 1994. As a percentage of 
sales, selling, general and administrative expenses decreased to 34.7% in 
fiscal 1994 compared to 42.0% in fiscal 1993 primarily as a result of the 
increase in sales during fiscal 1994. 

  On an industry segment basis, MFC's operating profit increased $9,449 to 
$426,375 during fiscal 1994 when compared to an operating profit of $416,926 
during fiscal 1993. The increase can be attributed to the increase in sales.  
NSI's operating loss decreased $411,756 to $83,415 during fiscal 1994 when 
compared to an operating loss of $495,171 during fiscal 1993. NSI's improvement 
can be attributed to the increase in sales during fiscal 1994 when compared to 
fiscal 1993 and an inventory writedown taken in fiscal 1993.  NSI's operating 
loss during fiscal 1994 can primarily be attributed to cost overruns due to 
technical problems associated with one order shipped during fiscal 1994. 
Corporate expenses increased $61,763 to $160,832 during fiscal 1994 when 
compared to $99,069 during fiscal 1993. The increase in Corporate expenses can 
be attributed to an increase in legal costs during fiscal 1994. 

                             15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

  MFC defines liquidity as the ability to generate adequate funds to meet its 
operating and capital needs.  The company's primary source of liquidity has 
been funds provided by operations. 

                                            September 30
                                   1995          1994        1993
Cash & cash equivalents          $520,676      $656,561      $89,690
Working capital                $2,392,325    $2,295,468   $1,617,436
Current ratio                   3.01 to 1     2.75 to 1    2.59 to 1
Long-term debt                   $439,545      $583,354     $251,298

  Cash and cash equivalents decreased $135,885 to $520,676 at September 30, 
1995 when compared to September 30, 1994. The decrease was a result of $234,910 
in net cash provided by operating activities, $134,456 in net cash used for 
capital expenditures and $236,339 in net cash used for financing activities. 

  At September 30, 1995, the company had aggregate lines of credit totaling 
$600,000.  Of these lines, $100,000 is for the purchase of equipment and is 
collateralized by equipment and $500,000 is for working capital and is 
collateralized by accounts receivable, inventories and equipment.  In addition, 
the company has a letter of credit facility, for up to $500,000, which is 
collateralized by specified inventory to be purchased.  At September 30, 1995, 
the Company had $60,319 in letters of credit outstanding. 

  Management believes that its working capital requirements for the foreseeable 
future will be met by its existing cash balances, future cash flows from 
operations and its current credit arrangements. 

OTHER 
-----

  The Financial Accounting Standards Board (FASB) issued Statement of Financial 
Accounting Standards (SFAS) No. 107, "Disclosures About Fair Value of Financial 
Instruments". The Standards require the Company to provide in fiscal 1996 
certain disclosures regarding the fair value of financial instruments in its 
financial statements. 

  In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment 
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".  This 
statement requires the recognition of both economic and permanent impairment 
losses on long-lived assets.  The Company is required to adopt this statement 
in fiscal 1996.  The adoption of this statement is not expected to have a 
material adverse affect on the Company's financial position or results of 
operations. 

  In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based 
Compensation".  This statement establishes financial accounting and reporting 
for stock-based compensation plans.  The Company is required to adopt this 
statement for transactions entered into after September 30, 1996.  The 
adoption of this statement is not expected to have a material adverse effect 
on the Company's financial position or results of operation. 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

  The Financial Statements and Financial Statement Schedules called for by this 
item are submitted as a separate section of this report. 

                             16
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL  DISCLOSURE. 
  None.
                             17
<PAGE>

                          PART III 
                                 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

  The names of, and certain information with respect to, the directors of MFC 
is set forth below: 

                                                         Common Shares 
                                                          Actually or   Percent 
                                                         Beneficially      of 
Director             Principal occupation               Owned 11/30/95   Class 


TRUDI B. ARTINI       Mrs. Artini is an independent           100,985     3.0%
(a)(b)(e)             investor in MFC and various other
Age 73                business enterprises in Syracuse,
Director since 1974   New York.                         
                                                        
DAVID B. ROBINSON MD  Dr. Robinson was a Professor of         110,173     3.3.%
(a)(b)(e)             Psychiatry and Director of the                           
Age 71                Adult Psychiatric In-Patient Unit                        
Director since 1977   of the Upstate Medical Center of                         
                      the State University of New York                         
                      since July of 1958, until his                            
                      retirement in 1985.  He continues                        
                      as a Consulting Psychiatrist at                          
                      Upstate Medical Center, Syracuse,                        
                      New York.  He has served as a                            
                      Skaneateles Town Councilman since                        
                      1989 and has been a Board member                         
                      of the Skaneateles Festival of                           
                      Chamber Music since 1980.                                
                                                                               
LOUIS MISENTI         President and Principal                 315,671     9.5% 
Age 68                shareholder of SCI Corp.,                                
Director since 1976   Syracuse, New York since 1984.                           
                      SCI manufactures polishing                               
                      compounds for the automobile and                         
                      silverware industries.  Mr.                              
                      Misenti is also partner in                               
                      Northern Pines Golf Course,                              
                      Cicero, New York which was                               
                      founded in 1970.  He was elected                         
                      Chairman of the Board of                                 
                      Directors of MFC on March 27,                            
                      1993.                                                    
                                                                               
CARL F. FAHRENKRUG PE Mr. Fahrenkrug was appointed            333,470     10.0%
(a)(d)(e)             President and Chief Executive                            
Age 53                Officer of MFC on October 7,                             
Director since 1984   1992.  He has also served as                             
                      President and Chief Executive                            
                      Officer of NSI since prior to                            
                      1986.  He served as Vice                                 
                      President of Engineering at                              
                      Microwave Systems, Inc.,                                 
                      Syracuse, N.Y. from 1972-1976.                           
                      Mr. Fahrenkrug has a B.S. and                            
                      M.S. in Engineering and an MBA                           
                      from Syracuse University.                                

                             18
<PAGE>
                                                                               

                                                         Common Shares 
                                                          Actually or   Percent 
                                                         Beneficially      of 
Director             Principal occupation               Owned 11/30/95   Class 

MILO PETERSON         Mr. Peterson has served as              150,602    4.5%  
(a)(d)(e)             Executive Vice President,                                
Age 55                Corporate Secretary and Chief                            
Director since 1990   Operating Officer of NSI since   
                      January 1, 1992.  Since January  
                      1, 1992, he has also served as   
                      Vice President of MFC and        
                      Production Consultant to the     
                      President.  Prior to January 1,  
                      1992, he served as Executive Vice
                      President of NSI.  Mr. Peterson  
                      graduated from programs at Yale  
                      University and Syracuse          
                      University.  He served as Vice   
                      President of Manufacturing of    
                      Microwave Systems, Inc.,         
                      Syracuse, N.Y. from 1970-1976.   
                      He was elected Corporate         
                      Secretary of MFC on March 27,    
                      1993.                            
                      
FRANK S. MARKOVICH    Mr. Markovich is a self-employed        1,941       0.1%
(b)(c)(e)             consultant in the manufacturing  
Age 51                and operations field.  Prior to  
Director since 1992   that he was the Director of the  
                      Manufacturing Extension          
                      Partnership at UNIPEG Binghamton.
                      He held various high level       
                      positions in operations, quality 
                      and product management in a 20   
                      year career with BF Goodrich     
                      Aerospace, Simmonds Precision    
                      Engine Systems of Norwich, New   
                      York.  He completed US Navy      
                      Electronics and Communications   
                      Schools and received an MBA from 
                      Syracuse University.             
                      
ROBERT R. ANDREWS     Mr. Andrews is the President and        1,157       0.0%
(b)(c)(d)             Principal shareholder of Morse   
Age 54                Manufacturing Co., Inc., East    
Director since 1992   Syracuse, N.Y. which produces    
                      specialized material handling    
                      equipment and has served in that 
                      capacity since prior to 1985.  He
                      received a B.A degree from       
                      Arkansas University and has      
                      served as Vice President and a   
                      director of the Manufacturers'   
                      Association of Central New York, 
                      President of the Citizens        
                      Foundation, a Trustee of Dewitt  
                      Community Church, director of the
                      Salvation Army and Chairman of   
                      the Business and Industry        
                      Council of Onondaga Community    
                      College.                         
                      
SIDNEY CHONG          Mr. Chong is manager of financial       2,200       0.1%
(a)(c)(d)             reports and corporate accounting 
Age 54                for the Carrols Corp. in         
Director since 1995   Syracuse.  Prior to joining      
                      Carrols Corp, he was a senior    
                      accountant with Price Waterhouse 
                      and Co. in New York City.  Mr.   
                      Chong has a bachelor of science  
                      degree from California State     
                      University.                      

                             19
<PAGE>


                                                         Common Shares 
                                                          Actually or   Percent 
                                                         Beneficially      of 
Director             Principal occupation               Owned 11/30/95   Class 

Daniel Galbally       Mr. Galbally is controller of           555         0.0%
(b)(c)(d)             Evaporated Metal Films (EMF) in  
Age 48                Ithaca, NY.  Before joining EMF, 
Director since 1995   he worked as controller and      
                      acting vice president of finance 
                      at Philips Display Components Co.
                      He has a bachelor's degree in    
                      accounting and an MBA from       
                      Syracuse University.             

(a)Member of Executive Committee 
(b)Member of Compensation Committee 
(c)Member of Finance and Audit Committee 
(d)Member of Operations Committee 
(e)Member of Nominating Committee 


The Directors listed above and executive officers as a group own 1,042,536 
shares or approximately 31% of the outstanding common shares of the Company. 


IDENTIFICATION OF EXECUTIVE OFFICERS 

        Name                   Age      Position 

        Carl F. Fahrenkrug      53      President and Chief Executive Officer 

        Richard L. Jones        47      Vice President and Chief Financial 
                                        Officer 

        Milo J. Peterson        55      Vice President and Corporate Secretary 

All of the officers serve at the pleasure of the Board of Directors. 

Carl F. Fahrenkrug was elected President and Chief Executive Officer of MFC on 
October 7, 1992.  Prior to that date, he had been Executive Vice President and 
Chief Operating Officer of MFC.  Prior to January 1, 1992, he was President and 
CEO of NSI and Vice President of Corporate Development for MFC. 

Richard L. Jones joined MFC in August 1983 as comptroller. In February 1985, he 
was appointed Vice President and Treasurer of MFC.  On October 7, 1992, he was 
appointed Vice President and Chief Financial Officer. 

Milo J. Peterson was elected Corporate Secretary of MFC on March 27, 1993.  Mr. 
Peterson has served as Executive Vice President, Corporate Secretary and Chief 
Operating Officer of NSI.  Since January 1, 1992, he has also served as Vice 
President of MFC and Production Consultant to the President.  Prior to January 
1, 1992, he served as Executive Vice President of NSI. 



                             20
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION.

  The following table sets forth for the fiscal years ended September 30, 1995, 
1994 and 1993, compensation paid by MFC to the named executive officers in all 
capacities in which they served. 

                            SUMMARY COMPENSATION TABLE
                                Annual Compensation
                                            Salary
   Name and principal position     Year      __$__

   Carl F. Fahrenkrug              1995     91,775
   President and CEO (1)           1994     95,522
                                   1993     93,802

(1) Mr. Fahrenkrug was elected President and CEO on October 7, 1992. 

PROFIT SHARING 
--------------

  MFC has a profit sharing plan for all employees over the age of 21 with one 
year of service.  Annual contributions are determined by the Board of Directors 
and are made from current or accumulated net income.  Allocation of 
contributions to plan participants are based upon annual compensation.  
Participants vest on the basis of 20% after 3 years of service, 40% at 4 years, 
60% at 5 years, 80% at 6 years and 100% at 7 years. 
  
  MFC has a voluntary 401-K plan.  Eligibility is the same as the Profit 
Sharing Plan.  Prior to April 1, 1994, MFC matched the employee contributions 
at a rate of 50% and MFC's contribution was limited to a maximum of 1% of the 
employee's income. Effective April 1, 1994, MFC matches the employee's 
contribution at a rate of  33 1/3% and MFC's contributions are limited to a 
maximum of 1 1/3% of the employee's income. 

  MFC's contributions to the plans for the years ended September 30, 1995, 1994 
and 1993 amounted to $28,167, $27,935 and $27,310, respectively. 

STOCK OPTIONS
-------------

  The Company has two (2) stock option plans which are administered by the 
Board of Directors on advice from the Compensation Committee.  The Employee 
Incentive Stock Option (E.I.S.O.) Plan was adopted in February, 1983.  Under 
this E.I.S.O. Plan, 50,000 authorized but unissued shares were set aside for 
key employees.  Options are granted at fair market value and must be exercised 
within ten (10) years of the date of the grant.  Shares issued may be 
repurchased by the Company if an employee leaves the Company within 2 years 
from the date of the grant.  On  February 15, 1986, the Board of Directors 
approved a revised Employee Stock Purchase (E.S.P.) Plan to replace the former 
stock purchase plan.  Under the E.S.P. Plan, employees purchase shares 
according to a formula which provides for an option of twenty (20) shares for 
each $1,000 of annual compensation.  Options can be granted for a period of one 
year. The E.S.P. Plan utilizes the IRS code provision authorizing corporations 
to sell shares of their stock to employees at a discount up to 15% of fair 
market value without immediate income tax consequences to the employee.  
Officers of the Company are not eligible to participate in the E.S.P. Plan.  
There were no E.I.S.O. Plan options or E.S.P. Plan options outstanding at 
September 30, 1995. 

                             21
<PAGE>

COMPENSATION OF DIRECTORS 
-------------------------

  Non-officer directors receive fees of $200.00 per board meeting and $100.00 
per committee meeting, with the exception of the executive committee which 
receives $200.00 per committee meeting. MFC also reimburses directors for 
reasonable expenses incurred in attending meetings.  Officer members receive no 
compensation for their attendance at meetings.  Non-officer directors have the 
option of receiving their compensation for meetings in the form of investment 
letter stock.  The number of shares received will be based upon a value of 85% 
of the mean value between the bid and ask price of the stock at the beginning 
of each quarter. 

ITEM 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 
AND MANAGEMENT. 

  The following table sets forth information as to the only persons known by 
the Company to own beneficially more than 5% of the Common Stock of the Company 
on November 30, 1995. 

                                                                       % of
                                                                  Outstanding
                                                                Number of Shares
                                                                     Common
Name of Beneficial Owner   Address           Beneficially Owned  _____Stock_____

Frederick A. Dix &         209 Watson Rd.          231,838             7.0%
Marjorie Dix               N. Syracuse, NY 13212

Carl F. Fahrenkrug &       Indian Hill Rd.         333,470             10.0%
Rita Fahrenkrug            Manlius, NY 13104

Louis S. Misenti           140 Clearview Rd.       315,671              9.5%
                           Dewitt, NY 13214

  The information relating to the ownership of common stock held by the 
directors and executive officers of the corporation is set forth in item 10 of 
this report. 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. 

  None 
                             22
<PAGE>

                           PART IV 
                                 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. 

(a)    1. and 2.   Financial Statements and Schedules: 
         
                   Reference is made to the list of Financial Statements and
                   Financial Statement Schedule submitted as a separate
                   section of this report.

(b)    Reports On Form 8-K:

       There are no reports on Form 8-K for the three months ended 
       September 30, 1995.

(C)    Exhibits:

       Reference is made to the List of Exhibits submitted as a separate 
       section of this report. 

                             23
<PAGE>

SIGNATURES
  Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, Microwave Filter Company, Inc. has duly caused this 
report to be signed on its behalf by the undersigned, thereunto duly 
authorized. 

MICROWAVE FILTER COMPANY, INC.

| S |   Carl F. Fahrenkrug
--------------------------
By:  Carl F. Fahrenkrug   
(President and Chief Executive Officer)

| S |    Richard Jones    
----------------------                  
By:  Richard Jones                          
(Vice President and Chief Financial Officer)

Dated:  January 10, 1996

  Pursuant to the requirements Of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the date indicated: 

| S |   Louis S. Misenti      | S |   Carl F. Fahrenkrug
------------------------      --------------------------
Louis S. Misenti              Carl F. Fahrenkrug
(Director)                    (Director)

| S |   Milo J. Peterson      | S |   Trudi B. Artini
------------------------      -----------------------
Milo J. Peterson              Trudi B. Artini
(Director)                    (Director)

| S |   Sidney Chong
--------------------
Sidney Chong
(Director)

Dated:  January 10, 1996

                             24
<PAGE>

                 ANNUAL REPORT ON FORM 10-K

               MICROWAVE FILTER COMPANY, INC.
                      AND SUBSIDIARIES

         INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
              AND FINANCIAL STATEMENT SCHEDULE

                 ITEM 8, ITEM 14(a)(1) and 2

CONSOLIDATED FINANCIAL STATEMENTS:                              Page

Independent Auditors' Report.....................................26
Consolidated Balance Sheets as of September 30, 1995 and 1994....27
Consolidated Statements of Operations for the Years
  Ended September 30, 1995, 1994 and 1993 .......................28
Consolidated Statements of Stockholders' Equity for the Years
  Ended September 30, 1995, 1994 and 1993 .......................29
Consolidated Statements of Cash Flows for the Years
  Ended September 30, 1995, 1994 and 1993 .......................30
Notes to Consolidated Financial Statements.......................31-38



SCHEDULE FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993:

Independent Auditors' Report on Schedules........................40
II-Valuation and Qualifying Accounts.............................41

  All other schedules for which provision is made in the applicable accounting 
regulation of the Securities and Exchange Commission are not required under the 
related instructions or are inapplicable and therefore have been omitted. 


                             25
<PAGE>

INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
Microwave Filter Company, Inc.
East Syracuse, New York

We have audited the accompanying consolidated balance sheets of MICROWAVE 
FILTER COMPANY, INC., AND SUBSIDIARIES as of September 30, 1995 and 1994, and 
the related consolidated statements of operations, stockholders' equity and 
cash flows for each of the three years in the period ended September 30, 1995.  
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements based 
on our audits. 

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement  presentation.  We believe that our audits provide a reasonable basis 
for our opinion. 

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Microwave Filter 
Company, Inc., and subsidiaries as of September 30, 1995 and 1994, and the 
consolidated results of their operations and their cash flows for each of the 
three years in the period ended September 30, 1995 in conformity with generally 
accepted accounting principles. 

As discussed in Note 8 to the financial statements, the Company changed its 
method of accounting for income taxes in fiscal 1994 by adopting Statement of 
Financial Accounting Standard No. 109, "Accounting for Income Taxes". 



Coopers & Lybrand L.L.P.


Syracuse, New York
December 6, 1995
                             26
<PAGE>

          Microwave Filter Company and Subsidiaries
                 Consolidated Balance Sheets

                                                              September 30
Assets                                                       1995       1994
------                                                       ----       ----
Current assets:
  Cash and cash equivalents                                $520,676    $656,561
  Accounts receivable-trade, net of allowance for doubtful
  accounts of $50,000 in 1995 and $75,000 in 1994           879,160   1,152,451
  Inventories                                             1,968,510   1,629,693
  Prepaid expenses and other current assets                 215,300     170,172
                                                            -------   ---------

      Total current assets                                3,583,646   3,608,877
                                                          ---------   ---------

Property, plant and equipment, net                        1,624,762   1,850,430
Other assets                                                 65,523     138,684
                                                          ---------   ---------

      Total assets                                       $5,273,931  $5,597,991
                                                         ==========  ==========
                                                      
                                                      
Liabilities And Stockholders' Equity

Current liabilities:
  Current portion of long term debt                        $146,556    $141,801
  Accounts payable                                          362,436     455,418
  Customer deposits                                         281,918     203,146
  Accrued federal and state income taxes                     42,808       4,977
  Accrued payroll and related expenses                       90,915     109,636
  Accrued compensated absences                              183,544     192,274
  Other current liabilities                                  83,144     206,157
                                                          ---------   ---------

    Total current liabilities                             1,191,321   1,313,409
                                                          ---------   ---------
                                                                     
Long term debt, less current portion                        439,545     583,354
Deferred compensation and other liabilities                  59,428      87,478
                                                          ---------   ---------
  Total liabilities                                       1,690,294   1,984,241
                                                          ---------   ---------

Stockholders' equity:
  Common stock, $.10 par value. Authorized 5,000,000 shares.
       Issued 4,003,733 in 1995 and 3,763,182 in 1994..     400,373     376,318
  Additional paid-in-capital                              2,880,992   2,636,582
  Retained earnings                                         939,377   1,140,670
                                                          ---------   ---------
  Common stock in treasury, at cost,
  680,301 shares in 1995 and 561,470 shares in 1994        (637,105)   (539,820)
                                                          ---------   ---------
Commitments

  Total stockholders' equity                              3,583,637   3,613,750
                                                          ---------   ---------

  Total Liabilities and Stockholders' Equity             $5,273,931  $5,597,991
                                                         ==========  ==========
                                                      
                                            
The accompanying notes are an integral part of the consolidated financial 
statements. 
                             27
<PAGE>

                   Microwave Filter Company and Subsidiaries
                     Consolidated Statements of Operations

                                         For the Years Ended September 30
                                       1995             1994            1993
                                       ----             ----            ----

Net sales                           $7,655,198       $8,616,861      $6,814,329

Cost of goods sold                   4,936,219        5,445,123       4,126,454
                                     ---------        ---------       ---------

    Gross profit                     2,718,979        3,171,738       2,687,875

Selling, general 
  and administrative expenses        2,687,260        2,989,610       2,865,189
                                     ---------        ---------       ---------

    Income (loss) from operations       31,719          182,128        (177,314)

Other Income (Expense)
    Interest income                     17,562            8,203           7,919
    Interest expense                   (42,345)         (29,494)        (19,455)
    Miscellaneous                       20,454           15,245          16,220
                                     ---------        ---------       ---------

    Income (loss) before income taxes   27,390          176,082        (172,630)


Provision (benefit) for income taxes     8,226           58,553         (54,300)
                                     ---------        ---------       ---------

NET INCOME (LOSS)                      $19,164         $117,529       ($118,330)
                                     ---------        ---------       ---------
                                                          
Earnings (loss) Per Share                $0.01            $0.04          ($0.03)
                                     ---------        ---------       ---------

Weighted average number of shares
and common stock equivalents         3,312,810        3,341,831       3,402,921
                                     =========        =========       =========
                                        
                                                
                                                         
                                                         
The accompanying notes are an integral part of the consolidated financial 
statements. 
                             28
<PAGE>

                   Microwave Filter Company and Subsidiaries  
                Consolidated Statements of Stockholders' Equity 
            For the Years Ended September 30, 1995, 1994 and 1993 
            -----------------------------------------------------
<TABLE>
<CAPTION>
                                                  Additional                                          Total
                               Common Stock        Paid-in       Retained      Treasury Stock      Stockholders'
                              Shares      Amt      Capital       Earnings      Shares     Amt         Equity
                              ------      ---      -------       --------      ------     ---         ------
<S>                         <C>         <C>        <C>          <C>          <C>      <C>          <C>
Balance,
September 30, 1992          3,274,807   $327,481   $2,088,277   $1,590,145     2,707    ($5,220)   $4,000,683

Net loss                                                          (118,330)                          (118,330)
Stock issued to employees
   and officers                81,953      8,195       95,248                                         103,443
Purchase of treasury stock                                                   506,037   (534,177)     (534,177)
5% stock dividend             344,405     34,441      414,052     (448,493)   52,243
                            ---------   --------   ----------     --------   -------  ----------   ----------

Balance,
September 30, 1993          3,701,165   $370,117   $2,597,577   $1,023,322   560,987  ($539,397)   $3,451,619

Net Income                                                         117,529                            117,529
Stock issued to employees
   and officers                48,106      4,811       26,415                                          31,226
Stock issued to directors      13,704      1,370       12,429                                          13,799
Purchase of treasury stock                                                       483       (423)         (423)
Other                             207         20          161         (181)
                            ---------   --------   ----------     --------   -------  ----------   ----------

Balance,
September 30, 1994          3,763,182   $376,318   $2,636,582   $1,140,670   561,470  ($539,820)   $3,613,750

Net Income                                                          19,164                             19,164
Stock issued to employees
and officers                   35,866      3,586       28,821                                          32,407
Stock issued to directors      14,636      1,464       14,137                                          15,601
Purchase of treasury stock                                                    86,461    (97,285)      (97,285)
5% stock dividend             190,049     19,005      201,452     (220,457)   32,370 
                            ---------   --------   ----------     --------   -------  ----------   ----------

Balance,
September 30, 1995          4,003,733   $400,373   $2,880,992     $939,377   680,301  ($637,105)   $3,583,637
                            =========   ========   ==========     ========   =======  ==========   ==========
</TABLE>
            
The accompanying notes are an integral part of the consolidated financial
statements.
                             29
<PAGE>

                   Microwave Filter Company and Subsidiaries
                     Consolidated Statements of Cash Flows
                Increase (Decrease) in Cash and Cash Equivalents
                ------------------------------------------------

                                              For the Years Ended September 30
                                              --------------------------------
                                                   1995      1994       1993
                                                   ----      ----       ----

Cash flows from operating activities:
       Net income (loss)                          $19,164   $117,529  ($118,330)

  Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
    Depreciation                                  360,124    380,849    359,537
    Amortization of intangible assets              39,006     44,686     27,854
    Stock compensation                             48,008     45,025     79,962
    Deferred income taxes                         (51,921)    11,567   (168,000)
  Changes in assets and liabilities:
    Accounts receivable-trade, net                198,291   (317,065)      (998)
    Federal and state income taxes                 37,831    (26,975)    42,569
    Inventories                                  (338,817)  (116,456)   (16,337)
    Other Assets                                   17,328     31,122    (50,233)
    Accounts payable and customer deposits         60,790    106,343    223,255
    Accrued payroll, compensated absences and
      related expenses                            (28,159)    25,945    (33,215)
    Other current liabilities                    (122,725)    98,065     (9,145)
    Deferred compensation                          (4,010)    (7,860)    (3,044)
                                                 --------   --------    -------
    Net cash provided by operating activities     234,910    392,775    333,875
                                                 --------   --------    -------
Cash flows from investing activities:
  Capital expenditures                           (134,456)  (249,997)  (380,033)
                                                 --------   --------    -------
      Net cash used in investing activities      (134,456)  (249,997)  (380,033)
                                                 --------   --------    -------
Cash flows from financing activities:
  Principal payments on long-term debt           (139,054)   (75,484)   (44,647)
  Proceeds from term loan                                    500,000
  Purchase of treasury stock                      (97,285)      (423)  (462,177)
                                                 --------   --------    -------
    Net cash provided (used) 
         by financing activities                 (236,339)   424,093   (506,824)
                                                 --------   --------    -------
    Net increase (decrease) 
         in cash and cash equivalents            (135,885)   566,871   (552,982)

  Cash and cash equivalents at beginning of year  656,561     89,690    642,672
                                                 --------   --------    -------
 CASH AND CASH EQUIVALENTS AT END OF YEAR        $520,676   $656,561    $89,690
                                                 ========   ========    =======
                                                       
                                                                
                                                                
Supplemental disclosures of cash flows:
  Cash paid during the year for (approximately):
    Interest                                      $39,000    $28,000    $20,000
    Income taxes                                  $22,000    $73,000    $71,000

  The accompanying notes are an integral part of the consolidated financial 
statements. 
                                 30
<PAGE>

                   Microwave Filter Company and Subsidiaries
                   Notes to Consolidated Financial Statements
                   ------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Consolidation

 The consolidated financial statements include the accounts of Microwave Filter 
Company, Inc. (MFC) and its wholly-owned subsidiaries, Niagara Scientific, Inc. 
(NSI) and Microwave Filter International, LTD. (MFI). All significant 
intercompany balances and transactions have been eliminated in consolidation. 

b. Cash Equivalents 

 The Company considers all highly liquid investments purchased with an original 
maturity of 90 days or less to be cash equivalents. 

c. Inventories

 Inventories are stated at the lower of cost determined on the first-in, first-
out method or market. 

d. Property, Plant and Equipment

 Property, plant and equipment are recorded at cost. Depreciation is provided 
using the straight-line method over the estimated useful lives of the 
respective assets.  At the time of sale or retirement, the cost and accumulated 
depreciation are removed from the respective accounts and the resulting gain or 
loss is recognized in income. 

e. Intangible Assets

 Included in other assets at September 30, 1995 and 1994 is $3,908 and $30,311 
representing a trade name and a covenant-not-to-compete and $59,864 and $72,467 
representing the excess of cost over net assets acquired from the purchase of 
Niagara Scientific at September 30, 1995 and 1994, respectively. These 
intangible assets are being amortized on a straight-line basis over 3 and 10 
years, respectively.  Total accumulated amortization at September 30, 1995 and 
1994 is $132,085 and $93,079, respectively. 

f. Research and Development

 Costs in connection with research and development, which amount to $408,425, 
$442,228 and $454,700 for the fiscal years 1995, 1994 and 1993, respectively, 
are charged to operations as incurred. 

g. Income Taxes

 The Company accounts for income taxes under Statement of Financial Accounting 
Standards (SFAS) No. 109.  Deferred tax assets and liabilities are based on the 
difference between the financial statement and tax basis of assets and 
liabilities as measured by the enacted tax rates which are anticipated to be in 
effect when these differences reverse. The deferred tax provision is the result 
of the net change in the deferred tax assets and liabilities.  A valuation 
allowance is established when it is necessary to reduce deferred tax assets to 
amounts expected to be realized.  Prior to fiscal 1994, income taxes were 
recorded under the method specified by APB11. 

                             31
<PAGE>

h. Earnings Per Share

 Earnings per common share are calculated based upon the weighted average 
number of shares of common stock outstanding during the periods including, when 
significant, any common stock equivalents and after restatement of any stock 
dividends. 

i. Accounts Receivable-trade

 Accounts receivable-trade, are stated net of allowance for doubtful accounts.  
The provision for doubtful accounts amounted to $18,969, $45,829 and $76,674 
for the years ended 1995, 1994 and 1993, respectively. 

j. Reclassifications

 Certain reclassifications have been made to conform prior year financial 
statements with the current year presentations. 

2. INVENTORIES

Inventories consisted of the following:          September 30
                                          1995                 1994
                                          ----                 ----
  Raw materials and stock parts       $1,106,636             $915,815
  Work-in-process                        393,972              335,174
  Finished goods                         467,902              378,704
                                        --------            ---------
                                      $1,968,510           $1,629,693
                                      ==========           ==========
                                               
                                               
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:

                                                 September 30
                                          1995                 1994
                                          ----                 ----  

  Land                                  $143,000             $143,000
  Building and improvements            1,642,103            1,625,189
  Machinery and equipment              1,973,227            1,908,513
  Office equipment and fixtures        1,022,426              969,598
  Other                                   93,507               93,507
                                       ---------            ---------
                                       4,874,263            4,739,807
  Less: Accumulated depreciation       3,249,501            2,889,377
                                       ---------            ---------
                                      $1,624,762           $1,850,430
                                      ==========           ==========
                                    
                                               
                                               
                             32
<PAGE>

4. LONG-TERM DEBT

Long-term debt consisted of the following:                 September 30
                                                      1995             1994
  Term loan, payable to a bank over 60 months through
  fiscal 1999, with interest at 6.0% for the first
  two years and 8.0% for the final three years (a)   $379,795        $469,873

  Capitalized lease obligation (b)                    206,306         255,282
                                                      -------         -------
                                                      586,101         725,155

  Less: current portion                               146,556         141,801
                                                      -------         -------
                                                     $439,545        $583,354
                                                      =======         =======
                                    
                                               
                                               
 (a) Collateralized by principally all assets.

 (b) The capitalized lease obligation is comprised of the Company's obligation 
to the Onondaga County Industrial Agency (OCIDA) which the Company used to 
finance the purchase of its primary manufacturing facility, which serves as 
collateral for the debt.  The Company financed its purchase of the facilities 
through an Industrial Development Revenue Bond issued by OCIDA and purchased by 
a bank.  The Company has guaranteed the payment on the bonds to the bank on 
behalf of OCIDA.  Payments are scheduled to be made quarterly, through April 
1999, in an amount which would fully amortize the unpaid principal of the 
bonds.  The interest rate is adjusted quarterly and is equal to 2.5% plus 65% 
of the thirteen week average rate of interest for Treasury Bills (5.60% and 
4.8075% at September 30, 1995 and 1994, respectively). 

 The following is a schedule of annual principal requirements
on long-term debt:
        Year Ended     Principal
       September 30     Payments
       ------------    ---------
           1996       $146,556
           1997        152,830
           1998        164,123
           1999        112,592
                       -------
                      $586,101
                       =======
                              
                             
 The terms of both agreements contain certain covenants which limit both 
capital expenditures and the ability to obtain additional bank debt. In 
addition, the maintenance of certain financial ratios including current ratio 
and debt to net worth, as defined, are also required by the agreements. 

5. CREDIT FACILITIES

 The Company has unused aggregate lines of credit totaling $600,000.  Of these 
lines, $100,000 is for the purchase of equipment and is collateralized by 
equipment and $500,000 is for working capital and is collateralized by accounts 
receivable, inventories and equipment.  In addition, the Company has a Letter 
of Credit Facility, for up to $500,000, which is collateralized by specified 
inventory to be purchased. At September 30, 1995, the Company had $60,319 in 
letters of credit outstanding. 

6. PROFIT SHARING AND 401-K PLANS

 The Company maintains both a non-contributory profit sharing plan and a 
contributory 401-K plan for all employees over the age of 21 with one year of 
service.  Annual contributions to the profit sharing plan are

                             33
<PAGE>

determined by the Board of Directors and are made from current or accumulated 
earnings, while contributions to the 401-K plan are matched at a rate of 33% of 
employee contributions limited to 1.33% of compensation. 

 The Company's contributions to the plans for the years ended September 30, 
1995, 1994 and 1993 were $28,167, $27,935 and $27,310 , respectively. 

7. OBLIGATIONS UNDER OPERATING LEASES

 The Company leases a motor vehicle and equipment under operating lease 
agreements expiring at various dates through September 30, 2001. Rental 
expenses under these leases for the years ended September 30, 1995, 1994 and 
1993 amounted to $94,686, $67,975 and $38,089, respectively. 

 Minimum rental commitments at September 30, 1995 for these
leases are:
        Year Ended     Principal
       September 30     Payments
       ------------     --------
           1996        $93,495
           1997         93,495
           1998         86,553
           1999         51,914
           2000         51,914
        Thereafter      95,335
                        ------
                      $472,706
                       =======       
                             
8. INCOME TAXES

 The Company adopted SFAS No. 109 as of October 1, 1993.  The cumulative effect 
of this change was not significant. 

 The provision for income taxes consisted of the following: 

                             Year Ended September 30
                          1995         1994         1993
Currently payable:
  Federal               $50,147       $38,586      $99,700
  State                  10,000         8,400       14,000
Deferred (credit)       (51,921)       11,567     (168,000)
                         ------       -------      -------
                         $8,226       $58,553     ($54,300)
                         ======       =======      =======
                                     
                                                 
                                                 
                             34
<PAGE>

 A reconciliation of the statutory federal income tax rate and the Company's 
effective income tax rate is as follows: 

                                         Year ended September 30
                          ______1995______   ______1994______  ______1993______
                           Amount     %       Amount     %      Amount     %
Statutory tax rate         $9,312    34.0%   $59,868    34.0%  ($58,694) (34.0)%
Surtax exemption           (5,204)  (19.0%)   (7,958)   (4.5)%    8,118    4.7%
State income tax net of:
Federal benefit             6,600    24.1%     5,544     3.1%    (5,610)  (3.2)%
Foreign sales corp benefit (4,579)  (16.7%)   (4,756)   (2.7)%   (8,099)  (4.7)%
Other                       2,097     7.6%     5,855     3.3%     9,985    5.7%
                           ------   ------   -------    ------ --------- -----
                           $8,226    30.0%   $58,553    33.2%  ($54,300) (31.5)%
                           ======   ======   =======    ====== ========= =====
                        
                                     
                                                     
                                                            
                                                            
 At September 30, 1995, the Company has unused research and experimentation tax 
credits of approximately $58,700 to offset future federal taxes through 2010.  
For financial reporting purposes, a valuation allowance has been recognized to 
offset the deferred tax asset related to the tax credit in 1995 and 1994. 

 The temporary differences which give rise to deferred tax assets and 
liabilities at September 30, 1995 and 1994 are as follows: 

                                            1995         1994
                                            ----         ----
Deferred tax assets:
  Accounts receivable                     $      0      $  3,684
  Inventory                                126,305        94,277
  Accrued vacation                           7,544        10,062
  Research and experimentation
   tax credits                              58,700        46,200
  Deferred compensation                      9,645        10,828
                                          --------      --------
  Gross deferred tax assets                202,194       165,051
  Valuation allowance                      (58,700)      (46,200)
                                          --------      --------

  Total net deferred tax assets            143,494       118,851
                                           -------       -------

Deferred tax liabilities:
  Accelerated depreciation                  40,807        65,610
  Other                                          0         2,475
                                          --------      --------
  Total deferred tax liabilities            40,807        68,085
                                          --------      --------

Net deferred tax assets                   $102,687       $50,766
                                          ========      ========
                             
                                     
                                     
Classification of net deferred tax assets:
  Current assets                          $133,849      $105,548
  Non-current liabilities                  (31,162)      (54,782)
                                          --------      --------
  Net deferred tax assets                 $102,687      $ 50,766
                                          ========      ========
                                      
                                      
                             35
<PAGE>

9. INDUSTRY SEGMENT DATA

  The Company operates primarily in the United States and principally in two 
industries.  The Company extends credit to business customers based upon 
ongoing credit evaluations.  Microwave Filter Company, Inc. (MFC) manufactures 
electronic filters used for preventing interference or signal processing in 
cable television, satellite, broadcast, aerospace and government markets, 
while Niagara Scientific, Inc. (NSI) manufactures industrial automation 
equipment. 

 Information by industry segment is as follows: (thousands of dollars) 
                                     1995          1994       1993
Net Sales (Unaffiliated):
  MFC                               $6,829        $7,497     $6,128
  NSI                                  826         1,120        686
  Total                             $7,655        $8,617     $6,814

Operating Profit (Loss): (a)
  MFC                                 $200          $426       $417
  NSI                                  (70)          (83)      (495)
  Corporate                            (98)         (161)       (99)
  Total                                $32          $182      ($177)

Identifiable Assets: (b)
  MFC                               $4,189        $4,334     $3,775
  NSI                                  564           532        897
  Subtotal                           4,753         4,866      4,672
Corporate Assets-Cash &
  Cash Equivalents                     521           657         89
  Total                             $5,274        $5,523     $4,761

Depreciation & Amortization Expense:
  MFC                                $324          $349       $304
  NSI                                  75            76         83
  Total                              $399          $425       $387

Capital Expenditures:
  MFC                                $129          $244       $303
  NSI                                   5             6         77
  Total                              $134          $250       $380

Significant Export Sales:
  MFC                                $508          $517       $618

Sales to Significant Customers:
MFC:
  Communication Microwave Corp     $1,103        $1,118

NSI:
  Planters/Lifesavers                $185          $172
  Macklanburg                        $132
  IBMX                               $116
  U S Mills                          $104
  Borden                              $86
  Knorr                                            $270       $108
  EI DuPont                                        $187
  Warner Lambert                                   $165
  Bristol                                                      $84

                             36
<PAGE>

(a) Operating profit (loss) is total revenue less operating expenses. In 
computing operating profit, none of the following items have been added or 
deducted: general corporate expenses, interest expense, income taxes and 
miscellaneous income. Expenses incurred on behalf of both Companies are 
allocated based upon estimates of their relationship to each entity. (b) 
Identifiable assets by industry are those assets that are used in the Company's 
operations in each industry. 

10. STOCK OPTIONS

  The Company has a stock option and stock purchase plan which are administered 
by the Compensation Committee. 

  The Employee Incentive Stock Option Plan (E.I.S.O. Plan) provides for the 
issuance of options to key employees at fair market value which must be 
exercised within ten years from the date of the grant.  Shares issued may be 
repurchased by the Company if an employee leaves the Company within two years 
from the date of grant. 

  The Employee Stock Purchase Plan (E.S.P. Plan) grants all employees options 
to purchase 20 shares for each $1,000 of the employee's annual compensation.  
The E.S.P. Plan utilizes the IRS code provision authorizing corporations to 
sell shares of their stock to employees at 85% of the fair market value on the 
date the right to purchase is granted.  Officers of the Company are not 
eligible to participate in the E.S.P. Plan. 

  In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based 
Compensation".  This statement establishes financial accounting and reporting 
for stock-based compensation plans.  The Company is required to adopt this 
statement for transactions entered into after September 30, 1996.  The 
adoption of this statement is not expected to have a material adverse effect 
on the Company's financial position or results of operation. 

  A summary of both plans' activities through September 30,
1995 is as follows:

                                                                EMPLOYEE
                                      INCENTIVE STOCK         STOCK PURCHASE
                                        OPTION PLAN                PLAN
                                        -----------                ----
                                    Shares   Avg. price      Shares  Avg. price
                                    ------   ----------      ------  ----------
Outstanding, September 30, 1992     12,000     $1.25
Granted                                                      42,028
Exercised                           (8,000)    $1.25         (6,171)   $1.22
Forfeited                           (4,000)    $1.25        (35,857)

Outstanding, September 30, 1993          0                        0
Granted                                                      47,040
Exercised                                                    (2,106)   $ .99
Forfeited                                                   (44,934)

Outstanding, September 30, 1994          0                        0
Granted                                                      46,534
Exercised                                                    (1,407)   $ .99
Forfeited                                                   (45,127)

Outstanding, September 30, 1995          0                        0
Shares Currently Available               0                        0
Shares Currently Exercisable             0                        0

                             37
<PAGE>

11. SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES 

  Supplemental disclosure of non-cash investing and financing activities: 

Year Ended September 30, 1994
-----------------------------
  During the first quarter of fiscal 1994, the company transferred $93,507 of 
items previously held in inventory to rental equipment. 

Year Ended September 30, 1993
-----------------------------
  On February 26, 1993 the Company purchased 505,598 shares of stock at $1.055 
per share in settlement of a $72,000 note receivable and paying cash in the 
amount of $461,409. 

12. FOURTH QUARTER ADJUSTMENTS

  In the fourth quarter of 1993, the Company recorded an expense of 
approximately $336,000 consisting principally of the writedown of certain 
inventory items and a receivable. 

13. LEGAL MATTERS 

  There are currently no material pending legal proceedings against the company 
or its subsidiaries. 

                             38
<PAGE>

                        EXHIBIT INDEX
                                                                           Page
Exhibit No.   Description                                                 Number

3.1      MFC Certificate of Corporation, as amended.                           *

3.2      MFC Amended and Restated Bylaws.                                      *

10.1     Bond Purchase Agreement dated as of February 22,1984                  *
         among MFC, Onondaga County Industrial Development Agency
         ("OCIDA") and Key Bank of Central New York ("Bondholder").

10.2     Lease Agreement dated as of February 22, 1984 between MFC and OCIDA.  *

10.3     Mortgage and Security Agreement dated as of February 22, 1984 from    *
         MFC and OCIDA to the Bondholder.

10.4     Guaranty Agreement dated as of February 22, 1984 from MFC to OCIDA    *
         and the Bondholder.

10.5     Application by Debtor in Possession for Authority to Sell General     *
         Intangible Assets and Order (MFC's acquisition of CT-1000 System).

10.6     Stock Purchase Agreement dated February 8, 1993 between Glyn and      *
         Emily Bostick and MFC.

 * Previously filed
                             39
<PAGE>

INDEPENDENT AUDITORS' REPORT ON SCHEDULES





Board of Directors and Stockholders
Microwave Filter Company, Inc.
East Syracuse, New York

Our report on the consolidated financial statements of MICROWAVE FILTER 
COMPANY, INC., AND SUBSIDIARIES is on page 26 of this Form 10-K.  In connection 
with our audits of such financial statements, we have also audited the related 
financial statement schedule listed in the index on page 25 of this Form 10-K. 

In our opinion, the financial statement schedule referred to above, when 
considered in relation to the basic financial statements taken as a whole, 
present fairly, in all material respects, the information required to be 
included therein. 



Coopers & Lybrand L.L.P.


Syracuse, New York
December 6, 1995
                             40
<PAGE>
Microwave Filter Company and Subsidiaries

Schedule II - VALUATION AND QUALIFYING ACCOUNTS

SEPTEMBER 30, 1995, 1994 and 1993

<TABLE>
<CAPTION>


Col. A                                         Col. B               Col. C         Col. D     Col. E
                                                                    Additions
                                               Balance at           Charged to     Charged to
                                               Beginning            Costs and      Other                    Balance at
Description                                    of Period            Expenses       Accounts   Deductions    End of Period
-----------                                    ---------            -----------------------   ----------    -------------

<S>                                            <C>                  <C>           <C>          <C>            <C> 
Year ended September 30, 1995

Allowance for doubtful accounts                 $75,000              $18,025                    $43,025        $50,000
Inventory valuation reserves                    441,663              103,643                          0        545,306
                                               --------             --------      -------       -------       --------
                                               $516,663             $121,668           $0       $43,025       $595,306
                                               ========             ========      =======       =======       ========


Year ended September 30, 1994

Allowance for doubtful accounts                $100,000              $45,829                    $70,829       $ 75,000
Inventory valuation reserves                    449,973              207,291                    215,601        441,663
                                               --------             --------      -------       -------       --------
                                               $549,973             $253,120           $0      $286,430       $516,663
                                               ========             ========      =======       =======       ========


Year ended September 30, 1993

Allowance for doubtful accounts                 $50,000              $76,674                    $26,674       $100,000
Inventory valuation reserves                    165,583              306,162                     21,772        449,973
                                               --------             --------      -------       -------       --------
                                               $215,583             $382,836           $0       $48,446       $549,973
                                               ========             ========      =======       =======       ========

</TABLE>
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