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| VIRGINIA                                                      | 54-1006352                             |
|---------------------------------------------------------------|----------------------------------------|
| (State or other jurisdictionof incorporation or organization) | (I.R.S. EmployerIdentification Number) |

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| Large accelerated filer  o           | Accelerated filer   o   |
|-------------------------------------------|-----------------------------------|
| Non-accelerated filer    o | Smaller reporting company  x |

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| Part I     | Financial Information                                                                       |   |
|------------|---------------------------------------------------------------------------------------------|--------|
|       |                                                                                        |   |
| Item 1.    | Financial Statements                                                                        | 2      |
|       |                                                                                        |   |
|       | Consolidated Balance Sheet as of June 30, 2010 and December 31, 2009                        | 3      |
|       |                                                                                        |   |
|       | Consolidated Statements of Operations for the Three Months Ended June 30, 2010 and 2009     | 4      |
|       |                                                                                        |   |
|       | Consolidated Statements of Operations for the Six Months Ended June 30, 2010 and 2009       | 5      |
|       |                                                                                        |   |
|       | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009       | 6      |
|       |                                                                                        |   |
|       | Notes to Consolidated Financial Statements                                                  | 7      |
|       |                                                                                        |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11     |
|       |                                                                                        |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                  | 16     |
|       |                                                                                        |   |
| Item 4T.   | Controls and Procedures                                                                     | 16     |
|       |                                                                                        |   |
| Part II    | Other Information                                                                           |   |
|       |                                                                                        |   |
| Item 1.    | Legal Proceedings                                                                           | 17     |
|       |                                                                                        |   |
| Item 6.    | Exhibits                                                                                    | 17     |
|       |                                                                                        |   |
| Signatures |                                                                                        | 18     |

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|                                                                                                   |   | (Unaudited) |       |   | (Audited)    |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|--------------|--------|
|                                                                                                   |   | June 30,    |       |   | December 31, |   |
|                                                                                                   |   | 2010        |       |   | 2009         |   |
| ASSETS                                                                                                 |   |        |       |   |         |   |
| Current Assets:                                                                                        |   |        |       |   |         |   |
|      Cash and cash equivalents                                                |   | $           | 6,550,735  |   |         | $      | 4,666,983 |   |
|      Restricted cash and cash equivalents                                     |   |        | 1,947,949  |   |         |   | 1,032,517 |   |
|      Accounts receivable, net                                                 |   |        | 4,344,865  |   |         |   | 7,468,327 |   |
|      Inventory                                                                |   |        | 3,361,258  |   |         |   | 3,088,782 |   |
|      Prepaid items and other assets                                           |   |        | 735,138    |   |         |   | 206,338 |   |
|      Income taxes receivable                                                  |   |        | —    |   |         |   | 70,695 |   |
|      Deferred income taxes                                                    |   |        | 459,000    |   |         |   | 412,000 |   |
|           Total Current Assets                       |   |        | 17,398,945 |   |         |   | 16,945,642 |   |
|                                                                                                   |   |        |       |   |         |   |   |   |
| Property and Equipment, Net                                                                            |   |        | 1,787,029  |   |         |   | 1,884,876 |   |
| Other Assets                                                                                           |   |        |       |   |         |   |   |   |
|      Goodwill                                                                 |   |        | 570,150    |   |         |   | 570,150 |   |
|      Other Assets                                                             |   |        | 112,246    |   |         |   | 127,529 |   |
|          Total Assets                                     |   | $           | 19,868,371 |   |         | $      | 19,528,197 |   |
|                                                                                                   |   |        |       |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                             |   |        |       |   |         |   |   |   |
| Current Liabilities:                                                                                   |   |        |       |   |         |   |   |   |
|      Accounts payable                                                         |   | $           | 852,281    |   |         | $      | 1,064,425 |   |
|      Accrued payroll                                                          |   |        | 158,029    |   |         |   | 479,507 |   |
|      Other accrued expenses                                                   |   |        | 1,072,861  |   |         |   | 1,470,477 |   |
|      Billings in excess of costs and estimated earnings                       |   |        | 374,428    |   |         |   | — |   |
|           Total Current Liabilities                  |   |        | 2,457,599  |   |         |   | 3,014,409 |   |
| Long-Term Liabilities                                                                                  |   |        |       |   |         |   |   |   |
|      Deferred rent                                                            |   |        | 1,265,634  |   |         |   | 1,335,176 |   |
|      Deferred income taxes                                                    |   |        | 135,000    |   |         |   | 148,000 |   |
|           Total Long-term Liabilities                |   |        | 1,400,634  |   |         |   | 1,483,176 |   |
|           Total Liabilities                          |   |        | 3,858,233  |   |         |   | 4,497,585 |   |
| Stockholders’ Equity                                                                             |   |        |       |   |         |   |   |   |
|      Common stock                                                             |   |        | 45,757     |   |         |   | 45,707 |   |
|      Additional paid-in capital                                               |   |        | 3,689,392  |   |         |   | 3,635,659 |   |
|      Retained earnings                                                        |   |        | 12,342,967 |   |         |   | 11,422,485 |   |
|      Accumulated other comprehensive loss                                     |   |        | (67,977    | )      |         |   | (73,239 | ) |
|          Total Stockholders’ Equity                 |   |        | 16,010,138 |   |         |   | 15,030,612 |   |
|          Total Liabilities and Stockholders’ Equity |   | $           | 19,868,371 |   |         | $      | 19,528,197 |   |

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|                                                     |   | Three Months Ended June 30, |      |
|----------------------------------------------------------|--------|-----------------------------|-----------|
|                                                     |   | 2010                        |      |   | 2009 |   |
|                                                     |   |                        |      |   | (Restated) |   |
|                                                     |   |                        |      |   |   |   |
| Net sales and revenues                                   |   | $                           | 5,472,936 |   |   | $ | 4,786,898 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Cost of sales and revenues                               |   |                        | 3,129,155 |   |   |   | 2,708,486 |   |
|                                                     |   |                        |      |   |   |   |   |   |
|      Gross profit               |   |                        | 2,343,781 |   |   |   | 2,078,412 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Operating expenses:                                      |   |                        |      |   |   |   |   |   |
|   Selling, general and administrative expenses |   |                        | 933,777   |   |   |   | 969,048 |   |
|   Research and development expenses            |   |                        | 502,956   |   |   |   | 412,501 |   |
|      Total operating expenses   |   |                        | 1,436,733 |   |   |   | 1,381,549 |   |
|                                                     |   |                        |      |   |   |   |   |   |
|      Operating income           |   |                        | 907,048   |   |   |   | 696,863 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Financing income, net                                    |   |                        | 14,690    |   |   |   | 22,486 |   |
|                                                     |   |                        |      |   |   |   |   |   |
|      Income before income taxes |   |                        | 921,738   |   |   |   | 719,349 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Income tax expense                                       |   |                        | 335,000   |   |   |   | 283,000 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Net income                                               |   | $                           | 586,738   |   |   | $ | 436,349 |   |
|                                                     |   |                        |      |   |   |   |   |   |
| Net income per share:                                    |   |                        |      |   |   |   |   |   |
|                                                     |   |                        |      |   |   |   |   |   |
|      Basic income per share     |   | $                           | 0.13      |   |   | $ | 0.10 |   |
|                                                     |   |                        |      |   |   |   |   |   |
|      Diluted income per share   |   | $                           | 0.12      |   |   | $ | 0.09 |   |

----

|                                                     |   | Six Months Ended June 30, |       |
|----------------------------------------------------------|--------|---------------------------|------------|
|                                                     |   | 2010                      |       |   | 2009 |   |
|                                                     |   |                      |       |   | (Restated) |   |
|                                                     |   |                      |       |   |   |   |
| Net sales and revenues                                   |   | $                         | 10,372,776 |   |   | $ | 8,361,929 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Cost of sales and revenues                               |   |                      | 6,117,484  |   |   |   | 4,939,395 |   |
|                                                     |   |                      |       |   |   |   |   |   |
|      Gross profit               |   |                      | 4,255,292  |   |   |   | 3,422,534 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Operating expenses:                                      |   |                      |       |   |   |   |   |   |
|   Selling, general and administrative expenses |   |                      | 1,923,734  |   |   |   | 2,005,420 |   |
|   Research and development expenses            |   |                      | 918,752    |   |   |   | 771,590 |   |
|      Total operating expenses   |   |                      | 2,842,486  |   |   |   | 2,777,010 |   |
|                                                     |   |                      |       |   |   |   |   |   |
|      Operating income           |   |                      | 1,412,806  |   |   |   | 645,524 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Financing income, net                                    |   |                      | 27,675     |   |   |   | 194,979 |   |
|                                                     |   |                      |       |   |   |   |   |   |
|      Income before income taxes |   |                      | 1,440,481  |   |   |   | 840,503 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Income tax expense                                       |   |                      | 520,000    |   |   |   | 336,000 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Net income                                               |   | $                         | 920,481    |   |   | $ | 504,503 |   |
|                                                     |   |                      |       |   |   |   |   |   |
| Net income per share:                                    |   |                      |       |   |   |   |   |   |
|                                                     |   |                      |       |   |   |   |   |   |
|      Basic income per share     |   | $                         | 0.20       |   |   | $ | 0.11 |   |
|                                                     |   |                      |       |   |   |   |   |   |
|      Diluted income per share   |   | $                         | 0.18       |   |   | $ | 0.10 |   |

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|                                                                                               |   | Six Months Ended June 30, |      |
|----------------------------------------------------------------------------------------------------|--------|---------------------------|-----------|
|                                                                                               |   | 2010                      |      |   | 2009 |   |
|                                                                                               |   |                      |      |   | (Restated) |   |
| Cash Flows from Operating Activities:                                                              |   |                      |      |   |   |   |
|      Net income                                                           |   | $                         | 920,481   |   |   | $ | 504,503 |   |
|      Noncash items included in net income:                                |   |                      |      |   |   |   |   |   |
|         Depreciation and amortization                      |   |                      | 149,572   |   |   |   | 101,590 |   |
|         Deferred income taxes                              |   |                      | (60,000   | ) |   |   | 6,000 |   |
|         Stock option compensation                          |   |                      | 38,383    |   |   |   | 95,749 |   |
|         Gain on disposal of property                       |   |                      | —   |   |   |   | (4,415 | ) |
|         Tax benefit from stock options exercised           |   |                      | (12,000   | ) |   |   | — |   |
|      Changes in current assets and liabilities:                           |   |                      |      |   |   |   |   |   |
|         Accounts receivable                                |   |                      | 3,123,462 |   |   |   | (1,360,917 | ) |
|         Inventory                                          |   |                      | (272,476  | ) |   |   | 506,723 |   |
|         Prepaid items and other assets                     |   |                      | (501,518  | ) |   |   | (8,211 | ) |
|         Income taxes receivable                            |   |                      | 70,695    |   |   |   | 885,166 |   |
|         Accounts payable                                   |   |                      | (212,144  | ) |   |   | (56,039 | ) |
|         Accrued expenses                                   |   |                      | (719,094  | ) |   |   | 236,511 |   |
|         Billings in excess of costs and estimated earnings |   |                      | 374,428   |   |   |   | (139,117 | ) |
|         Deferred Rent                                      |   |                      | (69,542   | ) |   |   | (11,590 | ) |
| Net Cash Provided by Operating Activities                                                          |   |                      | 2,830,247 |   |   |   | 755,953 |   |
| Cash Flows from Investing Activities:                                                              |   |                      |      |   |   |   |   |   |
|      Restricted cash and cash equivalents                                 |   |                      | (915,432  | ) |   |   | (265,531 | ) |
|      Purchase of property and equipment                                   |   |                      | (51,725   | ) |   |   | (403,179 | ) |
|      Proceeds from sales of property and equipment                        |   |                      | —   |   |   |   | 4,415 |   |
| Net Cash Used by Investing Activities                                                              |   |                      | (967,157  | ) |   |   | (664,295 | ) |
| Cash Flows from Financing Activities:                                                              |   |                      |      |   |   |   |   |   |
|      Payments on notes payable                                            |   |                      | —   |   |   |   | (2,765 | ) |
|      Tax benefit from stock options exercised                             |   |                      | 12,000    |   |   |   | — |   |
|      Proceeds from stock options exercised                                |   |                      | 3,400     |   |   |   | — |   |
| Net Cash Provided (Used) by Financing Activities                                                   |   |                      | 15,400    |   |   |   | (2,765 | ) |
|                                                                                               |   |                      |      |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                            |   |                      | 5,262     |   |   |   | 9,729 |   |
| Net increase in cash and cash equivalents                                                          |   |                      | 1,883,752 |   |   |   | 98,622 |   |
| Cash and cash equivalents at beginning of period                                                   |   |                      | 4,666,983 |   |   |   | 3,705,475 |   |
| Cash and cash equivalents at end of period                                                         |   | $                         | 6,550,735 |   |   | $ | 3,804,097 |   |

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|                             |   | Number of Shares |    |   | Weighted Average Exercise Price |   |    | Weighted Average Remaining Contractual Term (Years) |   |   | Aggregate Intrinsic Value |   |
|----------------------------------|--------|------------------|---------|--------|---------------------------------|--------|---------|-----------------------------------------------------|--------|--------|---------------------------|--------|
| Outstanding at December 31, 2009 |   |             | 589,252 |   |                            | $      | 2.01    |                                                |   |   |                      |   |   |   |
| Granted                          |   |             | 50,000  |   |                            |   | 6.47    |                                                |   |   |                      |   |   |   |
| Exercised                        |   |             | 5,000   |   |                            |   | 0.68    |                                                |   |   |                      |   |   |   |
| Canceled                         |   |             | — |   |                            |   | — |                                                |   |   |                      |   |   |   |
| Outstanding at June 30, 2010     |   |             | 634,252 |   |                            | $      | 2.37    |                                                |   |   | 4.09                      |   |   | $ | 2,682,734 |   |
|                             |   |             |    |   |                            |   |    |                                                |   |   |                      |   |   |   |   |   |
| Exercisable at June 30, 2010     |   |             | 565,978 |   |                            | $      | 1.86    |                                                |   |   | 3.50                      |   |   | $ | 2,681,769 |   |

|                                                                                   |   | Three Months Ended June 30, |      |
|----------------------------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                                                   |   | 2010                        |      |   | 2009 |   |
| Net income                                                                             |   | $                           | 586,738   |   |   | $ | 436,349 |   |
| Shares used in calculation of income per share:                                        |   |                        |      |   |   |   |   |   |
|      Basic                                                    |   |                        | 4,573,243 |   |   |   | 4,570,632 |   |
|           Effect of dilutive options |   |                        | 420,500   |   |   |   | 387,250 |   |
|      Diluted                                                  |   |                        | 4,993,743 |   |   |   | 4,957,882 |   |
| Net income per share:                                                                  |   |                        |      |   |   |   |   |   |
|      Basic                                                    |   | $                           | .13       |   |   | $ | .10 |   |
|      Diluted                                                  |   | $                           | .12       |   |   | $ | .09 |   |

----

|                                                                                   |   |  Six Months Ended June 30, |      |
|----------------------------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                                                   |   | 2010                            |      |   | 2009 |   |
| Net income                                                                             |   | $                               | 920,481   |   |   | $ | 504,503 |   |
| Shares used in calculation of income per share:                                        |   |                            |      |   |   |   |   |   |
|      Basic                                                    |   |                            | 4,571,958 |   |   |   | 4,570,632 |   |
|           Effect of dilutive options |   |                            | 424,194   |   |   |   | 388,034 |   |
|      Diluted                                                  |   |                            | 4,996,152 |   |   |   | 4,958,666 |   |
| Net income per share:                                                                  |   |                            |      |   |   |   |   |   |
|      Basic                                                    |   | $                               | .20       |   |   | $ | .11 |   |
|      Diluted                                                  |   | $                               | .18       |   |   | $ | .10 |   |

|                                     |   | Three Months Ended June 30, |    |
|------------------------------------------|--------|-----------------------------|---------|
|                                     |   | 2010                        |    |   | 2009 |   |
| Net income                               |   | $                           | 586,738 |   |   | $ | 436,349 |   |
| Other comprehensive income (loss):       |   |                        |    |   |   |   |   |   |
| Foreign currency translation adjustments |   |                        | (33,948 | ) |   |   | 24,601 |   |
| Total comprehensive income               |   | $                           | 552,790 |   |   | $ | 460,950 |   |

|                                     |   | Six Months Ended June 30, |    |
|------------------------------------------|--------|---------------------------|---------|
|                                     |   | 2010                      |    |   | 2009 |   |
| Net income                               |   | $                         | 920,481 |   |   | $ | 504,503 |   |
| Other comprehensive income:              |   |                      |    |   |   |   |   |   |
| Foreign currency translation adjustments |   |                      | 5,262   |   |   |   | 9,729 |   |
| Total comprehensive income               |   | $                         | 925,743 |   |   | $ | 514,232 |   |

----

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|                                         |   | Three Months Ended June 30, |   |
|----------------------------------------------|--------|-----------------------------|--------|
|                                         |   | 2010                        |   |   | 2009 |   |
|                                         |   |                        |   |   |   |   |
| Net sales and revenues                       |   |                        | 100.0  | % |   |   | 100.0 | % |
| Cost of sales and revenues                   |   |                        | 57.2   |   |   |   | 56.6 |   |
| Gross profit                                 |   |                        | 42.8   |   |   |   | 43.4 |   |
|                                         |   |                        |   |   |   |   |   |   |
| Selling, general and administrative expenses |   |                        | 17.1   |   |   |   | 20.2 |   |
| Research and Development expenses            |   |                        | 9.2    |   |   |   | 8.6 |   |
| Operating income                             |   |                        | 16.5   |   |   |   | 14.6 |   |
| Interest and other income                    |   |                        | 0.3    |   |   |   | 0.4 |   |
| Income before  income taxes        |   |                        | 16.8   |   |   |   | 15.0 |   |
| Income taxes (benefit)                       |   |                        | 6.1    |   |   |   | 5.9 |   |
| Net income                                   |   |                        | 10.7   | % |   |   | 9.1 | % |

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|                                         |   | Six Months Ended June 30, |   |
|----------------------------------------------|--------|---------------------------|--------|
|                                         |   | 2010                      |   |   | 2009 |   |
|                                         |   |                      |   |   |   |   |
| Net sales and revenues                       |   |                      | 100.0  | % |   |   | 100.0 | % |
| Cost of sales and revenues                   |   |                      | 59.0   |   |   |   | 59.1 |   |
| Gross profit                                 |   |                      | 41.0   |   |   |   | 40.9 |   |
|                                         |   |                      |   |   |   |   |   |   |
| Selling, general and administrative expenses |   |                      | 18.5   |   |   |   | 24.0 |   |
| Research and Development expenses            |   |                      | 8.9    |   |   |   | 9.2 |   |
| Operating income                             |   |                      | 13.6   |   |   |   | 7.7 |   |
| Interest and other income                    |   |                      | 0.3    |   |   |   | 2.3 |   |
| Income before  income taxes        |   |                      | 13.9   |   |   |   | 10.0 |   |
| Income taxes (benefit)                       |   |                      | 5.0    |   |   |   | 4.0 |   |
| Net income                                   |   |                      | 8.9    | % |   |   | 6.0 | % |

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| 10.22 | 2010 Equity Incentive Plan (incorporated by reference to Appendix A to Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 30, 2010) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23 | First Amendment to Deed of Lease between Sutron Corporation and FP Sterling Park II, LLC dated June 25, 2010 |
|-------|--------------------------------------------------------------------------------------------------------------|

| 31.1  | Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a). |
|------------|----------------------------------------------------------------------------------------|

| 31.2  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a). |
|------------|--------------------------------------------------------------------------|

| 32 | Certification of the President and Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                | Sutron Corporation(Registrant) |                                                               |
|---------------------|--------------------------------|--------------------------------------------------------------------|
|                |                           |                                                               |   |
| August 12, 2010Date | By:                            | /s/  Raul S. McQuivey                                    |   |
|                |                           | Raul S. McQuivey                                                   |   |
|                |                           | President and Chief Executive Officer(Principal Executive Officer) |   |
|                |                           |                                                               |   |

|                |   |                                                                |
|---------------------|--------|---------------------------------------------------------------------|
|                |   |                                                                |   |
| August 12, 2010Date | By:    | /s/ Sidney C. Hooper                                           |   |
|                |   | Sidney C. Hooper                                                    |   |
|                |   | Chief Financial Officer and Treasurer(Principal Accounting Officer) |   |
|                |   |                                                                |   |

----