| ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------------------------------------------------------------------------------------|

| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| Delaware                                                      |   | 38-1799862                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) |   | (I.R.S. EmployerIdentification No.) |

| 2525 Shader Road, Orlando, Florida       |   | 32804      |   |
|------------------------------------------|--------|------------|--------|
| (Address of Principal Executive Offices) |   | (Zip Code) |   |

| Title of each class           |   | Name of each exchange on which registered |
|-------------------------------|--------|-------------------------------------------|
| Common Stock, $0.01 Par Value |   | NYSE Amex                                 |

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|       |                                                                                                               | Page     |
|------------|--------------------------------------------------------------------------------------------------------------------|----------|
| PART I     |                                                                                                               |     |
| Item 1     | Business                                                                                                           | 1        |
| Item 1A    | Risk Factors                                                                                                       | 6        |
| Item 1B    | Unresolved Staff Comments                                                                                          | 13       |
| Item 2     | Properties                                                                                                         | 14       |
| Item 3     | Legal Proceedings                                                                                                  | 14       |
| Item 4     | (Removed and Reserved)                                                                                             | 14       |
| PART II    |                                                                                                               |     |
| Item 5     | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  15 |
| Item 6     | Selected Financial Data                                                                                            | 16       |
| Item 7     | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |  18 |
| Item 7A    | Quantitative and Qualitative Disclosures About Market Risk                                                         | 27       |
| Item 8     | Financial Statements and Supplementary Data                                                                        | 27       |
| Item 9     | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                               |  28 |
| Item 9A(T) | Controls and Procedures                                                                                            | 28       |
| Item 9B    | Other Information                                                                                                  | 28       |
| PART III   |                                                                                                               |     |
| Item 10    | Directors, Executive Officers and Corporate Governance                                                             | 29       |
| Item 11    | Executive Compensation                                                                                             | 32       |
| Item 12    | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     |  35 |
| Item 13    | Certain Relationships and Related Transactions, and Director Independence                                          | 36       |
| Item 14    | Principal Accountant Fees and Services                                                                             | 36       |
| PART IV    |                                                                                                               |     |
| Item 15    | Exhibits and Financial Statement Schedules                                                                         | 37       |

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| ·   | stability -- the frequency of the signal does not vary significantly when the product is subjected to a range of operating environments; and |
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| ·   | low electronic noise -- the signal does not add interfering signals that can degrade the performance of electronic systems. |
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| ·   | the diversion of our management’s attention from our existing business to integrate the operations and personnel of the acquired or combined business or joint venture; |
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| ·   | general economic conditions affecting the availability of long-term or short-term credit facilities, the purchasing and payment patterns of our customers, or the requirements imposed by our suppliers; |
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| ·   | economic conditions in our industry and in the industries that typically comprise our customers and suppliers; |
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| ·   | changes in financial estimates or investment recommendations by securities analysts relating to our common stock; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | loss of a major customer; |
|--------------------|---------------------------|

| ·   | announcements by our or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; and |
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| ·   | changes in key personnel. |
|--------------------|---------------------------|

| ·   | prohibiting our stockholders from fixing the number of directors; and |
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| ·   | establishing advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board of Directors. |
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| Fiscal Year 2010  |   | High   |   |   | Low    |   |
|-------------------|--------|--------|--------|--------|--------|--------|
| First Quarter (1) |   | $      | 6.90   |   |   | $      | 3.29 |   |
|              |   |   |   |   |   |   |   |   |
| Fiscal Year 2009  |   | High   |   |   | Low    |   |
| First Quarter     |   | $      | 2.28   |   |   | $      | 1.18 |   |
| Second Quarter    |   |   | 4.50   |   |   |   | 1.70 |   |
| Third Quarter     |   |   | 3.97   |   |   |   | 2.59 |   |
| Fourth Quarter    |   |   | 3.75   |   |   |   | 2.30 |   |
|              |   |   |   |   |   |   |   |   |
| Fiscal Year 2008  |   | High   |   |   | Low    |   |
| First Quarter     |   | $      | 13.90  |   |   | $      | 6.20 |   |
| Second Quarter    |   |   | 8.75   |   |   |   | 6.50 |   |
| Third Quarter     |   |   | 8.40   |   |   |   | 5.00 |   |
| Fourth Quarter    |   |   | 5.10   |   |   |   | 1.00 |   |

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| Plan Category                                              |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights(a) |   |   | Weighted-average exercise price of outstanding options, warrants and rights(b) |   |   | Number ofsecurities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |   |
|------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by security holders (1) |   |                                                                                           | 20,000 |   |                                                                           | $      | 13.17  |                                                                                                                                                |   |   | 481,700 |   |
|                                                       |   |                                                                                           |   |   |                                                                           |   |   |                                                                                                                                                |   |   |   |   |
| Equity compensation plans not approved by security holders |   |                                                                                           | --     |   |                                                                           |   | --     |                                                                                                                                                |   |   | -- |   |
| Total                                                      |   |                                                                                           | 20,000 |   |                                                                           | $      | 13.17  |                                                                                                                                                |   |   | 481,700 |   |

| (1)   | Our 2001 Equity Incentive Plan was originally approved by our stockholders on May 2, 2002, and an amendment to the 2001 Equity Incentive Plan was approved by our stockholders on May 26, 2005.  600,000 shares of our common stock were authorized for issuance under the 2001 Equity Incentive Plan. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                     |   | Year ended December 31, (a) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|
|                                               (inthousands, except per share data) |   |
|                                                                                                                                                                                                                                                                                                                     |   | 2009                        |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |
| Revenues                                                                                                                                                                                                                                                                                                                 |   | $                           | 31,301 |   |   | $ | 40,179 |   |   | $ | 39,536 |   |   | $ | 41,549 |   |   | $ | 35,051 |   |
| Operating income (loss) (b)                                                                                                                                                                                                                                                                                         |   |                        | (2,154 | ) |   |   | (810 | ) |   |   | (1,805 | ) |   |   | 1,356 |   |   |   | 489 |   |
| Income (loss) before income taxes                                                                                                                                                                                                                                                                                        |   |                        | (2,503 | ) |   |   | (1,155 | ) |   |   | (2,511 | ) |   |   | 732 |   |   |   | 1,069 |   |
| Benefit (provision) for income taxes                                                                                                                                                                                                                                                                                     |   |                        | (19 | ) |   |   | (127 | ) |   |   | (135 | ) |   |   | 225 |   |   |   | 201 |   |
| Net income (loss)                                                                                                                                                                                                                                                                                                        |   | $                           | (2,522 | ) |   | $ | (1,282 | ) |   | $ | (2,646 | ) |   | $ | 957 |   |   | $ | 1,270 |   |
|                                                                                                                                                                                                                                                                                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per common share:(c)                                                                                                                                                                                                                                                                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net income (loss) per common share                                                                                                                                                                                                                                                                     |   |                        | (1.15 | ) |   |   | (0.59 | ) |   |   | (1.23 | ) |   |   | 0.44 |   |   |   | 0.77 |   |
|                                                                                                                                                                                                                                                                                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                                                                                                                                                                                  |   | December 31, (a) |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|
|                                             (inthousands) |
|                                                                                                                                                                                                                                                                                  |   | 2009             |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Cash, securities and short-term investments (d)                                                                                                                                                                                                                                       |   | $                | 3,816  |   |   | $ | 5,325 |   |   | $ | 5,281 |   |   | $ | 7,039 |   |   | $ | 8,250 |   |
|                                                                                                                                                                                                                                                                                  |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted cash (e)                                                                                                                                                                                                                                                                   |   |             | --     |   |   |   | -- |   |   |   | -- |   |   |   | 96 |   |   |   | 650 |   |
|                                                                                                                                                                                                                                                                                  |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets (f)                                                                                                                                                                                                                                                                      |   |             | 18,568 |   |   |   | 22,652 |   |   |   | 23,142 |   |   |   | 31,343 |   |   |   | 33,039 |   |
|                                                                                                                                                                                                                                                                                  |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total long-term debt (including current portion)                                                                                                                                                                                                                                      |   |             | 3,289  |   |   |   | 4,057 |   |   |   | 4,454 |   |   |   | 5,127 |   |   |   | 6,246 |   |
|                                                                                                                                                                                                                                                                                  |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' equity (f) (g)                                                                                                                                                                                                                                                          |   |             | 9,010  |   |   |   | 11,332 |   |   |   | 12,642 |   |   |   | 16,742 |   |   |   | 15,071 |   |

| (a) | The data presented excludes the results of operations of Lynch Systems, Inc., as its operating assets were sold during 2007.  The operating results from Lynch Systems, Inc. were discontinued in 2007. |
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|   | (b)  Operating income (loss) is revenues less operating expenses, which excludes investment income, interest expense, gain on sale of land and equipment, other income and taxes.  Included are asset impairment and restructuring charges and the gain on deconsolidation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Based on weighted average number of shares of common stock outstanding. |
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| (d) | Includes short-term marketable securities. |
|-----|--------------------------------------------|

| (e) | The Company did not have any restricted cash at December 31, 2009 and 2008. |
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| (f) | Includes retrospective adjustment due to change in accounting principle from LIFO to FIFO. |
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| (g) | No cash dividends have been declared over the periods presented. |
|-----|------------------------------------------------------------------|

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| 2010  |   | $      | 2,620 |   |
|-------|--------|--------|-------|--------|
| 2011  |   |   | 299   |   |
| 2012  |   |   | 321   |   |
| 2013  |   |   | 49    |   |
| 2014  |   |   | 0     |   |
| Total |   | $      | 3,289 |   |

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| a)   | FASB Accounting Standards Codification, ASC 815 Implementation Issues, FASB Staff Positions, and American Institute of Certified Public Accountants (“AICPA”) Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB. |
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| b)   | FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position. |
|----------------|------------------------------------------------------------------------------------------------------------------------------|

| c)   | AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB and the Topics discussed in Appendix D of ASC Abstracts. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d)   | Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   Name |   Age |  Director Since | Offices and Positions Held With the Company, Business Experience and Principal Occupation For Last Five Years, and Directorships in Public Corporations and Investment Companies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------------------|-----------------|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Marc Gabelli     | 42              | 2003                 | Chairman of the Board of Directors, The LGL Group, Inc. (September 2004 to present); Managing Director of GGCP, Inc. (2004 to present), a private corporation that makes investments for its own account; President of Gemini Capital Management LLC (1995 to present); President of Venator Global, the general partner of Venator Merchant Fund, LP,an investment management vehicle.  Mr. Gabelli’s qualifications to serve on the Board of Directors include his extensive knowledge of the Company’s business and industry due his longstanding service on the Board of Directors, as well as his financial expertise and leadership experience as an executive of various investment firms.                                             |
| Timothy Foufas   | 41              | 2007                 | Vice Chairman of the Board of Directors, The LGL Group, Inc. (2007 to Present); Managing Partner, Plato Foufas & Co. LLC (2005 to present), a financial services company; President, Levalon Properties LLC (2007 to present), a real estate property management company; Senior Vice President, Bayshore Management Co. LLC (2005 to 2006); Directorof Investments, Liam Ventures Inc. (2000 to 2005), a private equity investment firm.  Mr. Foufas brings to the Board of Directors his management skills and expertise in financial, investment and real estate matters.                                                                                                                                                                          |
| Hans Wunderl     | 58              | 2010                 | Board of Directors, The LGL Group, Inc. (February 1, 2010 to present); Chief Operating Officer, The LGL Group, Inc. (February 2009 to January 2010); Chief Operating Officer, BE Semiconductor Industries N.V. (January 2004 to January 2008), a manufacturer of back-end microelectronic assembly equipment; Chief Executive Officer of Oerlikon Esec(September 2002 to December 2003), a global supplier of die and wire bonding equipment for the semiconductor industry; President – U.S. Operations, of ASM USA (August 1999 to September 2002), a supplier of semiconductor process equipment.  Mr. Wunderl shares with the Board of Directors his in-depth knowledge of the industry and experience in high technology development and marketing. |

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| Patrick J. Guarino        | 67 | 2006 | Managing Partner of August Properties LLC (2005 to present), a private investment company with real estate and securities holdings; Managing Partner of Independent Board Advisory Services, LLC (2002 to 2005), a corporate governance consulting firm; Retired Executive Vice President, Ultramar Diamond Shamrock Corporation (1996 to 2000), a NYSE,Fortune 200, international petroleum refining and marketing company; Senior Vice President and General Counsel, Ultramar Corporation (1992 to 1996), a NYSE, Fortune 200, international petroleum and marketing company; Senior Vice President and General Counsel of Ultramar PLC, (1986 to 1992), a London Stock Exchange listed international, integrated oil company.  Mr. Guarino brings to the Board of Directors valuable knowledge of and fluency with legal and corporate governance matters, and the perspectiveof a former General Counsel of a public company.                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------|----|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Jeremiah Healy            | 67 | 2008 | Former President and Chief Executive Officer, The LGL Group, Inc. (2006 to 2007) and Chief Financial Officer, The LGL Group, Inc. (2006 to 2007); Chairman of the Audit Committee, Infocrossing Inc. (2004 to 2007), an outsourcer of computer software; Vice President and Chief Financial Officer, Ge-Ray Holdings Company Inc. (1989 to 2005), a privatemanufacturer of knitted textiles.  As a former Chief Executive Officer and Chief Financial Officer of The LGL Group, Inc., Mr. Healy has extensive knowledge of the organization from the highest levels of leadership and accounting expertise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Anthony R. Pustorino, CPA | 84 | 2002 | Retired; Professor Emeritus, Pace University (2001 to present); Professor of Accounting, Pace University (1965 to 2001); former Assistant Chairman, Accounting Department, Pace University; President and Shareholder, Pustorino, Puglisi & Co., P.C., CPAs  (1961 to 1989); Instructor, Fordham University (1961 to 1965); Assistant Controller,Olivetti-Underwood Corporation (1957 to 1961); CPA, Peat, Marwick, Mitchell & Co., CPAs  (1953 to 1957); former Chairman, Board of Directors, New York State Board for Public Accountancy; former Chairman, CPA Examination Review Board of  National Association of State Boards of Accountancy; former member, Council of American Institute of Certified Public Accountants; former Vice President, Treasurer, Director and member, Executive Committee of New York State Society of Certified Public Accountants;current Director and Audit Committee Chairman of various investment companies within the Gabelli Mutual Funds Complex.  Mr. Pustorino’s significant experience in accounting matters obtained over the course of his long career as an accountant and professor of accounting provides the Board of Directors with valuable insight, especially in his service as Chairman of the Audit Committee. |
| Javier Romero             | 36 | 2007 | Managing Partner and Chairman of GSF Capital (2007 to present), an asset management company currently managing private equity funds; Head of Corporate Finance & Strategy practice (2000 to 2007), Arthur D. Little, a consulting firm; International consultant for the World Bank in Washington DC (1999 to 2000); attorney, Arthur Andersen LawFirm, based in Spain and specializing in corporate law (1996 to 1998); Member of the Board of several Spanish, Italian and Chinese companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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| Executive Officers      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|-------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Name                    | Age    | Officers and Positions Held With the Company, Business Experience and Principal Occupation For Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Gregory P. Anderson     | 50     | President and Chief Executive Officer, The LGL Group, Inc. (July 2009 to present);  Vice President of Operations of  MtronPTI (December 2000 to June 2009), Chief Executive Officer and Chairman of the Board of Directors of The LGL Group, Inc.’s subsidiary, M-tron Industries, Ltd. (July 2009 to present); President andChairman of the Board of The LGL Group, Inc.’s subsidiary, Piezo Technology, Inc. (July 2009 to present); and Chairman of the Board of the LGL Group, Inc.’s subsidiary, Piezo Technology India Private Ltd. (July 2009 to present).  |
| R. LaDuane Clifton, CPA | 37     | Chief Accounting Officer, The LGL Group, Inc. (March 2010 to present); Member of Audit Committee of Community First Credit Union of Florida (September 2008 to present); Corporate Controller of The LGL Group, Inc. (August 2009 to March 2010); Chief Financial Officer of a21, Inc. (August 2008 to August 2009); Corporate Controller of a21, Inc.(March 2007 to August 2008); Auditor at KPMG LLP (August 2004 to March 2007).                                                                                                                                                                           |

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| Name and Principal Position                                                                                  | Year     | Salary($)      | Bonus($) | All OtherCompensation($)                   | Total($)       |
|--------------------------------------------------------------------------------------------------------------|----------|----------------|----------|--------------------------------------------|----------------|
| Gregory P. Anderson(1)     Chief Executive     Officer     | 20092008 | 150,888-       | --       | --                                         | 150,888-       |
| Robert Zylstra(2)     Former Chief Executive     Officer   | 20092008 | 104,077209,010 | --       |   86,996(3)-                     | 191,073209,010 |
| Harold D. Castle(4)     Former Chief Financial     Officer | 20092008 | 166,393148,198 | ---      |   57,981(5)  35,286(6) | 224,374183,484 |
| Hans Wunderl(7)     Former Chief Operating     Officer     | 20092008 | 182,794-       | 50,000-  | --                                         | 232,794-       |

|   | (1) |   Mr. Anderson has served as the Company’s Chief Executive Officer since July 2, 2009, and served as the Vice President of Operations for the Company’s subsidiary, MtronPTI from December 2000 to June 30, 2009. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) |    Mr. Castle received a severance package in the amount of $42,750 and a PTO payout in the amount of $15,231. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------|

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| Name                    |   | Fees Earned or Paid in Cash($) |   |   | Stock Awards($)(1) |   |   | Total($) |   |
|-------------------------|--------|--------------------------------|--------|--------|--------------------|--------|--------|----------|--------|
| Marc Gabelli            |   |                           | 1      | (2)    |               |   | --     |     |   |   | 1 |   |
| Timothy Foufas          |   |                           | 15,000 |   |               |   | 16,665 |     |   |   | 31,665 |   |
| E. Val Cerutti(3)  |   |                           | 18,000 |   |               |   | 16,665 |     |   |   | 34,665 |   |
| Peter DaPuzzo(3)   |   |                           | 20,750 |   |               |   | 16,665 |     |   |   | 37,415 |   |
| Avrum Gray(3)      |   |                           | 19,750 |   |               |   | 16,665 |     |   |   | 36,415 |   |
| Patrick J. Guarino      |   |                           | 18,500 |   |               |   | 16,665 |     |   |   | 35,165 |   |
| Jeremiah Healy          |   |                           | 18,000 |   |               |   | 16,665 |     |   |   | 34,665 |   |
| Anthony R. Pustorino    |   |                           | 22,000 |   |               |   | 16,665 |     |   |   | 38,665 |   |
| Javier Romero           |   |                           | 14,000 |   |               |   | 16,665 |     |   |   | 30,665 |   |

| (1) | On December 15, 2009, as a portion of their base compensation for fiscal 2009, members of the Board of Directors other than Mr. Gabelli were granted 3,165 shares each of restricted stock under the Company’s 2001 Equity Incentive Plan, to vest quarterly over the course of 2010.  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)               | On December 31, 2009, Messrs. Cerutti, DaPuzzo and Gray resigned from the Board of Directors. |
|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|

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| Item 12. | Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters. |
|----------|-------------------------------------------------------------------------------------------------|

| ·   | each person who is known by us to beneficially own 5% or more of our common stock; |
|--------------------|------------------------------------------------------------------------------------|

| ·   | each of our directors and named executive officers; and |
|--------------------|---------------------------------------------------------|

| ·   | all of our directors and executive officers, as a group. |
|--------------------|----------------------------------------------------------|

|                                                             |   | Common StockBeneficially Owned (1) |    |
|------------------------------------------------------------------|--------|------------------------------------|---------|
| Name and Address of Beneficial Owner                             |   | Shares                             |    |   | % |   |
| 5% or Greater Stockholders:                                      |   |                               |    |   |   |   |
|                                                             |   |                               |    |   |   |   |
| Mario J. Gabelli (2)                                        |   |                               | 366,874 |   |   |   | 16.5 |   |
|                                                             |   |                               |    |   |   |   |   |   |
| Directors and Named Executive Officers:                          |   |                               |    |   |   |   |   |   |
|                                                             |   |                               |    |   |   |   |   |   |
| Marc Gabelli                                                     |   |                               | 539,354 | (3) |   |   | 24.2 |   |
| Gregory P. Anderson                                              |   |                               | 1,500   |   |   |   | * |   |
| Timothy Foufas                                                   |   |                               | 11,191  | (4) |   |   | * |   |
| Hans Wunderl                                                     |   |                               | 2,469   | (5) |   |   | * |   |
| Patrick J. Guarino                                               |   |                               | 12,191  | (4) |   |   | * |   |
| Jeremiah M. Healy                                                |   |                               | 16,220  | (6) |   |   | * |   |
| Anthony R. Pustorino                                             |   |                               | 13,195  | (4) |   |   | * |   |
| Javier Romero                                                    |   |                               | 10,191  | (4) |   |   | * |   |
| Robert R. Zylstra(7)                                        |   |                               | 10,400  | (6) |   |   | * |   |
| Harold D. Castle(8)                                         |   |                               | – |   |   |   | – |   |
|                                                             |   |                               |    |   |   |   |   |   |
| All executive officers and directors as a group (11 persons) (9) |   |                               | 616,711 |   |   |   | 27.7 |   |
|                                                             |   |                               |    |   |   |   |   |   |

| (1) | The applicable percentage of ownership for each beneficial owner is based on 2,227,684 of Common Stock outstanding as of March 30, 2010. Shares of Common Stock issuable upon exercise of options, warrants or other rights beneficially owned that are exercisable within 60 days are deemed outstanding for the purpose of computing the percentage ownership of the person holding such securities and rights and all executiveofficers and directors as a group. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes (i) 244,396 shares of Common Stock owned directly by Mario J. Gabelli  (including 8,903 held for his benefit under the Lynch Interactive Corporation 401(k) Savings Plan); (ii) 1,203 shares owned by a charitable foundation of which Mr. Gabelli is a trustee; (iii) 96,756 shares owned by a limited partnership in which Mr. Gabelli is the general partner and has an approximate 5% interest; and (iv) 24,519shares owned by Lynch Interactive Corporation, of which Mr. Gabelli is Chairman and the beneficial  officer of approximately 24% of the outstanding common stock.  Mr. Gabelli disclaims beneficial ownership of the shares owned by such charitable foundation, by Lynch Interactive Corporation and by such limited partnership, except to the extent of his 5% interest in such limited partnership.  Mr. Gabelli’s business address is 401 Theodore Fremd Avenue, Rye, New York 10580-1430. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes (i) # 12,475 shares of Common Stock owned directly by Marc Gabelli; (ii) 506,879 shares beneficially owned by Venator Fund and Venator Global, LLC  (“Venator Global”); and (iii) 20,000 shares issuable upon the exercise of options held by Mr. Gabelli at a $13.173 per share exercise price.  Venator Global, which is the sole general partner of Venator Fund, is deemed to have beneficialownership of the securities owned beneficially by   Venator Fund.  Marc Gabelli is the President of Venator Global. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes 10,191 shares of restricted stock granted under the Company’s 2001 Equity Incentive Plan. |
|-----|----------------------------------------------------------------------------------------------------------|

| (5) | Represents 2,469 shares of restricted stock granted under the Company’s 2001 Equity Incentive Plan. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (6)    |    Includes 9,970 shares of restricted stock granted under the Company’s 2001 Equity Incentive Plan. |
|------------------|----------------------------------------------------------------------------------------------------------------------|

| (7)               | Mr. Zylstra’s date of resignation was July 1, 2009. |
|-------------------------------------------------------------------------------|-----------------------------------------------------------|

| (8)               | Mr. Castle’s date of resignation was December 2, 2009. |
|------------------------------------------------------------------------------------|--------------------------------------------------------------|

| (9)               | Includes one executive officer who was not a named executive officer for 2009. |
|------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|

----

|   | Equity Compensation Plan Information |
|--------|--------------------------------------|

----

| Report of Independent Registered Public Accounting Firm                                         |
|-------------------------------------------------------------------------------------------------|
| Consolidated Balance Sheets at December 31, 2009 and 2008                                       |
| Consolidated Statements of Operations -- Years ended December 31, 2009 and 2008                 |
| Consolidated Statements of Stockholders’ Equity -- Years ended December 31, 2009 and 2008 |
| Consolidated Statements of Cash Flows -- Years ended December 31, 2009 and 2008                 |
| Notes to Consolidated Financial Statements                                                      |

| Exhibit No. | Description                                                                                                                                                                                                                                                              |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                     |
| 3.1         | Certificate of Incorporation of The LGL Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 31, 2007).                                                                                               |
|        |                                                                                                                                                                                                                                                                     |
| 3.2         | The LGL Group, Inc. By-Laws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 31, 2007).                                                                                                                       |
|        |                                                                                                                                                                                                                                                                     |
| 10.1        | The LGL Group, Inc. 401(k) Savings Plan (incorporated by reference to Exhibit 10(b) to the Company’s Annual Report on Form 10-K for the period ended December 31, 1995).                                                                                           |
|        |                                                                                                                                                                                                                                                                     |
| 10.2        | Directors Stock Plan (incorporated by reference to Exhibit 10(o) to the Company’s Form 10-K for the year ended December 31, 1997).                                                                                                                                 |
|        |                                                                                                                                                                                                                                                                     |
| 10.3        | The LGL Group, Inc. 2001 Equity Incentive Plan adopted December 10, 2001 (incorporated by reference to Exhibit 4 to the Company’s Form S-8 Registration Statement filed on December 29, 2005.                                                                      |
|        |                                                                                                                                                                                                                                                                     |
| 10.4        | Employment Agreement by and between Mtron Industries, Inc. and South Dakota Board of Economic Development, dated December 19, 2002 (incorporated by reference to Exhibit 10(mm) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003). |
|        |                                                                                                                                                                                                                                                                     |
| 10.5        | Registration Rights Agreement by and between the Company and Venator Merchant Fund, L.P.  dated October 15, 2004 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated October 20, 2004).                         |
|        |                                                                                                                                                                                                                                                                     |
| 10.6        | Loan Agreement, by and among M-Tron Industries, Inc., Piezo Technology, Inc. and RBC Centura Bank, dated September 30, 2005 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2005).               |

----

|   |                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.7   | Unconditional Guaranty for Payment by and between The LGL Group, Inc. and RBC Centura Bank, dated September 30, 2005 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 4, 2005).                                  |
|   |                                                                                                                                                                                                                                                                                 |
| 10.8   | Modification Agreement, dated as of August 18, 2009, by and among M-tron Industries, Inc., Piezo Technology, Inc. and RBC Centura Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 23, 2009).             |
|   |                                                                                                                                                                                                                                                                                 |
| 10.9   | Amended and Restated Loan Agreement, dated as of August 18, 2009, by and among M-tron Industries, Inc., Piezo Technology, Inc. and First National Bank of Omaha (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 25, 2009). |
|   |                                                                                                                                                                                                                                                                                 |
| 10.10  | Form of Amended and Restated Term Note made by M-tron Industries, Inc. and Piezo Technology, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 16, 2009).            |
|   |                                                                                                                                                                                                                                                                                 |
| 10.11  | Form of Amended and Restated Revolving Note made by M-tron Industries, Inc. and Piezo Technology, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 16, 2009).       |
|   |                                                                                                                                                                                                                                                                                 |
| 10.12  | Unconditional Guaranty, dated as of August 18 2009, made by The LGL Group, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated August 25, 2009).                                 |
|   |                                                                                                                                                                                                                                                                                 |
| 10.13  | First Amendment to the Loan Agreement by and among M-Tron Industries, Inc., Piezo Technology, Inc. and First National Bank of Omaha, dated May 31, 2005 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 6, 2005).  |
|   |                                                                                                                                                                                                                                                                                 |
| 10.14  | Employment Agreement, dated January 7, 1999, by and between M-tron Industries, Inc. and Robert R. Zylstra (incorporated by reference to Exhibit 10(c) to the Company’s Form 10-K for the year ended December 31, 2007).                                                        |
|   |                                                                                                                                                                                                                                                                                 |
| 10.15  | Employment Agreement, dated December 24, 2007, by and between The LGL Group, Inc. and Harold D. Castle (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 28, 2007).                                                     |
|   |                                                                                                                                                                                                                                                                                 |
| 10.16  | Employment Agreement, dated February 3, 2009, by and between The LGL Group, Inc. and Hans Wunderl (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 4, 2009).                                                           |
|   |                                                                                                                                                                                                                                                                                 |
| 10.17  | Employment Agreement, dated as of June 29, 2009, by and between The LGL Group, Inc. and Greg Anderson (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 8, 2009).                                               |
|   |                                                                                                                                                                                                                                                                                 |
| 10.18  | Form of Indemnification Agreement by and between The LGL Group, Inc. and its executive officers and directors (incorporated by reference to Exhibit 10(q) to the Company’s Form 10-K for the year ended December 31, 2007).                                                    |
|   |                                                                                                                                                                                                                                                                                 |
| 10.19  | Form of Restricted Stock Agreement by and between The LGL Group, Inc. and each of its Directors (incorporated by reference to Exhibit 10(v) to the Company’s Form 10-K for the year ended December 31, 2007).                                                                  |
|   |                                                                                                                                                                                                                                                                                 |
| 18.1   | Letter, dated March 31, 2010, to the Board of Directors of The LGL Group, Inc. from J.H. Cohn LLP regarding the preferability of newly adopted accounting principle.*                                                                                                                |
|   |                                                                                                                                                                                                                                                                                 |
| 21.1   | Subsidiaries of the The LGL Group, Inc.*                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                 |
| 23.1   | Consent of Independent Registered Public Accounting Firm – J.H. Cohn LLP.*                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                 |
| 31.1   | Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                 |
| 31.2   | Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                 |
| 32.1   | Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                 |
| 32.2   | Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                             |

|   | * filed herewith |
|--------|------------------|

----

|           |   | THE LGL GROUP, INC. |
|----------------|--------|---------------------|
|           |   |                |
|           |   |                |
| March 31, 2010 |   | By:                 |   /s/ Gregory P. Anderson |
|           |   |                | Gregory P. Anderson |
|           |   |                | President and Chief Executive Officer(Principal Executive Officer) |
|           |   |                |   |

| SIGNATURE                         | CAPACITY                                           | DATE                        |
|-----------------------------------|----------------------------------------------------|-----------------------------|
|                              |                                               |                        |
|                              | Chairman of the Board of Directors                 | March 31, 2010              |
| MARC J. GABELLI                   |                                               |                        |
| /s/ Gregory P. Anderson           |  President and Chief Executive Officer        |    March 31, 2010 |
| GREGORY P. ANDERSON               | (Principal Executive Officer)                      |                        |
| /s/ R. LaDuane Clifton            |  Chief Accounting Officer                     |    March 31, 2010 |
| R. LADUANE CLIFTON                | (Principal Financial and Accounting Officer)  |                        |
| /s/ Timothy Foufas                | Vice-Chairman of the                               |    March 31, 2010 |
| TIMOTHY FOUFAS                    | Board of Directors                            |                        |
| /s/ Patrick J. Guarino  | Vice-Chairman of the                               |    March 31, 2010 |
| PATRICK J. GUARINO                | Board of Directors                            |                        |
| /s/ Jeremiah M. Healy             | Director                                           |    March 31, 2010 |
| JEREMIAH M. HEALY                 |                                          |                        |
| /s/ Anthony Pustorino        | Director                                           |    March 31, 2010 |
| ANTHONY PUSTORINO            |                                               |                        |
| /s/ Javier Romero            | Director                                           |    March 31, 2010 |
| JAVIER ROMERO                |                                               |                        |
| /s/ Hans Wunderl             | Director                                           |    March 31, 2010 |
| HANS WUNDERL                      |                                               |                        |
|                              |                                               |                        |

----

----

|                                                                                                                                                                                                            |   | December 31, |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| ASSETS                                                                                                                                                                                                          |   | 2009         |    |   | 2008 |   |
| Current Assets:                                                                                                                                                                                                 |   |         |    |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                       |   | $            | 3,816   |   |   | $ | 5,325 |   |
| Accounts receivable, less allowances of $259 and $158, respectively (Note A)                                                                                                                                    |   |         | 4,779   |   |   |   | 6,483 |   |
| Inventories (Note B)                                                                                                                                                                                            |   |         | 5,348   |   |   |   | 5,408 |   |
| Prepaid expenses and other current assets                                                                                                                                                                       |   |         | 412     |   |   |   | 414 |   |
| Total Current Assets                                                                                                                                                                                            |   |         | 14,355  |   |   |   | 17,630 |   |
| Property, Plant and Equipment (Note A)                                                                                                                                                                          |   |         |    |   |   |   |   |   |
| Land                                                                                                                                                                                                            |   |         | 670     |   |   |   | 693 |   |
| Buildings and improvements                                                                                                                                                                                      |   |         | 4,856   |   |   |   | 5,048 |   |
| Machinery and equipment                                                                                                                                                                                         |   |         | 13,312  |   |   |   | 12,901 |   |
| Gross property, plant and equipment                                                                                                                                                                             |   |         | 18,838  |   |   |   | 18,642 |   |
| Less: accumulated depreciation                                                                                                                                                                                  |   |         | (15,113 | ) |   |   | (14,129 | ) |
| Net property, plant, and equipment                                                                                                                                                                              |   |         | 3,725   |   |   |   | 4,513 |   |
| Deferred income taxes, net (Notes A and G)                                                                                                                                                                      |   |         | 111     |   |   |   | 111 |   |
| Other assets                                                                                                                                                                                                    |   |         | 377     |   |   |   | 398 |   |
| Total Assets                                                                                                                                                                                                    |   | $            | 18,568  |   |   | $ | 22,652 |   |
|                                                                                                                                                                                                            |   |         |    |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                      |   |         |    |   |   |   |   |   |
| Current Liabilities:                                                                                                                                                                                            |   |         |    |   |   |   |   |   |
| Note payable to bank (Note C)                                                                                                                                                                                   |   | $            | 1,696   |   |   | $ | 2,749 |   |
| Accounts payable                                                                                                                                                                                                |   |         | 2,333   |   |   |   | 2,093 |   |
| Accrued compensation and commissions expense                                                                                                                                                                    |   |         | 1,220   |   |   |   | 1,323 |   |
| Other accrued expenses                                                                                                                                                                                          |   |         | 1,020   |   |   |   | 1,098 |   |
| Current maturities of long-term debt (Note C)                                                                                                                                                                   |   |         | 2,620   |   |   |   | 397 |   |
| Total Current Liabilities                                                                                                                                                                                       |   |         | 8,889   |   |   |   | 7,660 |   |
| Long-term debt (Note C)                                                                                                                                                                                         |   |         | 669     |   |   |   | 3,660 |   |
| Total Liabilities                                                                                                                                                                                               |   |         | 9,558   |   |   |   | 11,320 |   |
|                                                                                                                                                                                                            |   |         |    |   |   |   |   |   |
| Commitments and Contingencies                                                                                                                                                                                   |   |         |    |   |   |   |   |   |
|                                                                                                                                                                                                            |   |         |    |   |   |   |   |   |
| Stockholders' Equity                                                                                                                                                                                            |   |         |    |   |   |   |   |   |
| Common stock, $0.01 par value - 10,000,000 shares authorized; 2,227,684 and 2,188,510 shares issued for 2009 and 2008, respectively; 2,227,684 and 2,183,326 shares outstanding for 2009 and 2008, respectively |   |         | 22      |   |   |   | 22 |   |
| Additional paid-in capital                                                                                                                                                                                      |   |         | 20,708  |   |   |   | 20,728 |   |
| Accumulated deficit                                                                                                                                                                                             |   |         | (11,604 | ) |   |   | (9,082 | ) |
| Accumulated other comprehensive loss (Note H)                                                                                                                                                                   |   |         | (116    | ) |   |   | (235 | ) |
| Treasury stock, at cost, of 0 and 5,274 shares for 2009 and 2008, respectively                                                                                                                                  |   |         | --      |   |   |   | (101 | ) |
| Total Stockholders' Equity                                                                                                                                                                                      |   |         | 9,010   |   |   |   | 11,332 |   |
| Total Liabilities and Stockholders' Equity                                                                                                                                                                      |   | $            | 18,568  |   |   | $ | 22,652 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Years EndedDecember 31, |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2009                    |      |   | 2008 |   |
| REVENUES                                                                                                                       |   | $                       | 31,301    |   |   | $ | 40,179 |   |
| Costs and expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                    |      |   |   |   |   |   |
| Manufacturing cost of sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    | 23,876    |   |   |   | 29,780 |   |
| Engineering, selling and administrative                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | 9,344     |   |   |   | 11,209 |   |
| Impairment loss on Lynch Systems’ assets                                                                                                |   |                    | 235       |   |   |   | -- |   |
| OPERATING LOSS                                                                                                                 |   |                    | (2,154    | ) |   |   | (810 | ) |
| Other income (expense):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    |      |   |   |   |   |   |
| Interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                    | (405      | ) |   |   | (386 | ) |
| Gain on sale of equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    | --        |   |   |   | 255 |   |
| Other income (expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                    | 56        |   |   |   | (214 | ) |
| Total Other Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    | (349      | ) |   |   | (345 | ) |
| LOSS BEFORE INCOME TAXES                                                                                                       |   |                    | (2,503    | ) |   |   | (1,155 | ) |
| Income tax benefit                                                                                                             |   |                    | (19       | ) |   |   | (127 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |      |   |   |   |   |   |
| NET LOSS                                                                                                                       |   | $                       | (2,522    | ) |   | $ | (1,282 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                    |      |   |   |   |   |   |
| Weighted average number of shares used in basic and diluted EPS calculation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    | 2,200,010 |   |   |   | 2,174,173 |   |
| BASIC AND DILUTED NET LOSS PER COMMON SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                       | (1.15     | ) |   | $ | (0.59 | ) |

----

|                                                                                       |   | Shares ofCommon StockOutstanding |      |   | CommonStock |   |   | AdditionalPaid-InCapital |   |   | Accumulated Deficit |   |   | Accumulated Other Comprehensive Loss |    |   | Treasury Stock |   |   | Total  |   |
|--------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|--------|-------------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|--------------------------------------|---------|--------|----------------|--------|--------|--------|--------|
| Balance at December 31, 2007 (as reported)                                                 |   |                             | 2,167,202 |   |        | $      | 22     |                     |   | $      | 20,921              |   |   | $                                    | (8,066  | )      |           | $      | (101   | )      |   | $ | (407 | ) |   | $ | 12,369 |   |
| Change in Accounting Principle (Note A)                                                    |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 | 266     |   |           |   |   |   |   |   |   |   |   |   | 266 |   |
| Balance at December 31, 2007 (as adjusted)                                                 |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 | (7,800  | )      |           |   |   |   |   |   |   |   |   |   | 12,635 |   |
| Comprehensive loss:                                                                        |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for year                                                                          |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | (1,282  | )      |           |   | --     |   |   |   | -- |   |   |   | (1,282 | ) |
| Other comprehensive loss                                                                   |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | --      |   |           |   | (134   | )      |   |   | -- |   |   |   | (134 | ) |
| Comprehensive loss                                                                         |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |           |   |   |   |   |   |   |   |   |   | (1,416 | ) |
|     Stock-based compensation                                           |   |                             | --        |   |        |   | --     |                     |   |   | 113                 |   |   |                                 | --      |   |           |   | --     |   |   |   | -- |   |   |   | 113 |   |
| Issuance of treasury shares for vested restricted stock                                    |   |                             | 16,034    |   |        |   | --     |                     |   |   | (306                | )      |   |                                 | --      |   |           |   | --     |   |   |   | 306 |   |   |   | -- |   |
| Balance at December 31, 2008                                                               |   |                             | 2,183,236 |   |        |   | 22     |                     |   |   | 20,728              |   |   |                                 | (9,082  | )      |           |   | (235   | )      |   |   | (101 | ) |   |   | 11,332 |   |
| Comprehensive loss:                                                                        |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for year                                                                          |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | (2,522  | )      |           |   | --     |   |   |   | -- |   |   |   | (2,522 | ) |
| Other comprehensive income                                                                 |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | --      |   |           |   | 119    |   |   |   |   |   |   |   | 119 |   |
|             Comprehensive loss |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |           |   |   |   |   |   |   |   |   |   | (2,403 | ) |
| Stock-based compensation                                                                   |   |                             | 39,174    |   |        |   | --     |                     |   |   | 81                  |   |   |                                 | --      |   |           |   | --     |   |   |   | -- |   |   |   | 81 |   |
| Issuance of treasury shares for vested restricted stock                                    |   |                             | 5,274     |   |        |   | --     |                     |   |   | (101                | )      |   |                                 | --      |   |           |   | --     |   |   |   | 101 |   |   |   | - |   |
| Balance at December 31, 2009                                                               |   |                             | 2,227,684 |   |        | $      | 22     |                     |   | $      | 20,708              |   |   | $                                    | (11,604 | )      |           | $      | (116   | )      |   | $ | -- |   |   | $ | 9,010 |   |
|                                                                                       |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                      |   | Years EndedDecember 31, |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                      |   | 2009                    |   |   | 2008 |   |
| OPERATING ACTIVITIES                                                                      |   |                    |   |   |   |   |
| Net loss                                                                                  |   | $                       | (2,522 | ) |   | $ | (1,282 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |                    |   |   |   |   |   |   |
| Impairment loss on Lynch Systems’ assets                                            |   |                    | 235    |   |   |   | -- |   |
| Depreciation                                                                              |   |                    | 878    |   |   |   | 1,038 |   |
| Amortization of finite-lived intangible assets                                            |   |                    | 60     |   |   |   | 60 |   |
| Gain on sale of equipment                                                                 |   |                    | --     |   |   |   | (255 | ) |
| Realized loss on marketable securities                                                    |   |                    | --     |   |   |   | 54 |   |
| Stock-based compensation                                                                  |   |                    | 81     |   |   |   | 113 |   |
| Changes in operating assets and liabilities:                                              |   |                    |   |   |   |   |   |   |
| Accounts receivable                                                                       |   |                    | 1,704  |   |   |   | (101 | ) |
| Inventories                                                                               |   |                    | 60     |   |   |   | 39 |   |
| Trade accounts payable and accrued liabilities                                            |   |                    | 329    |   |   |   | (575 | ) |
| Other assets/liabilities, net                                                             |   |                    | (188   | ) |   |   | (34 | ) |
| Net cash provided by (used in) operating activities                                       |   |                    | 637    |   |   |   | (943 | ) |
|                                                                                      |   |                    |   |   |   |   |   |   |
| INVESTING ACTIVITIES                                                                      |   |                    |   |   |   |   |   |   |
| Capital expenditures                                                                      |   |                    | (325   | ) |   |   | (537 | ) |
| Proceeds from sale of equipment                                                           |   |                    | --     |   |   |   | 255 |   |
| Net cash used in investing activities                                                     |   |                    | (325   | ) |   |   | (282 | ) |
|                                                                                      |   |                    |   |   |   |   |   |   |
| FINANCING ACTIVITIES                                                                      |   |                    |   |   |   |   |   |   |
| Net (repayments) borrowings on note payable to bank                                       |   |                    | (1,053 | ) |   |   | 1,714 |   |
| Repayments of long-term debt                                                              |   |                    | (768   | ) |   |   | (397 | ) |
| Net cash (used in) provided by financing activities                                       |   |                    | (1,821 | ) |   |   | 1,317 |   |
|                                                                                      |   |                    |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                          |   |                    | (1,509 | ) |   |   | 92 |   |
| Cash and cash equivalents at beginning of year                                            |   |                    | 5,325  |   |   |   | 5,233 |   |
| Cash and cash equivalents at end of year                                                  |   | $                       | 3,816  |   |   | $ | 5,325 |   |
|                                                                                      |   |                    |   |   |   |   |   |   |

| Supplemental Disclosure:                                |   |   |   |   |   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash paid for interest                                  |   | $      | 399    |   |   | $      | 389 |   |
| Cash paid for income taxes                              |   | $      | 22     |   |   | $      | 114 |   |
| Non-cash Financing Activity:                            |   |   |   |   |   |   |   |   |
| Issuance of treasury shares for vested restricted stock |   | $      | 101    |   |   | $      | 306 |   |

----

|                                |   | Owned By TheLGL Group, Inc. |   |
|-------------------------------------|--------|-----------------------------|--------|
| M-tron Industries, Inc.             |   |                        | 100.0  | % |
| M-tron Industries, Ltd.             |   |                        | 100.0  | % |
| Piezo Technology, Inc.              |   |                        | 100.0  | % |
| Piezo Technology India Private Ltd. |   |                        | 99.9   | % |
| Lynch Systems, Inc.                 |   |                        | 100.0  | % |

----

----

|   | Liabilities |
|--------|-------------|

|                              |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |   | December 31, 2009 |   |
|-----------------------------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|--------|-------------------|--------|
| Swap liability on hedge contracts |   | $                                                              | --     |   |                                          | $      | 129    |                                      |   | $      | --                |   |   | $ | 129 |   |

|   | Accounts Receivable |
|--------|---------------------|

----

|                       | As computed under LIFO |   | As reported under FIFO |   |   |   | Effect of change |   |
|----------------------------|------------------------|--------|------------------------|--------|--------|--------|------------------|--------|
| Revenues                   | $                      | 31,301 |                   | $      | 31,301 |   |             |   | $ | - |   |
| Costs and expenses         |                   | 33,483 |                   |   | 33,455 |   | (a)              |   |   | (28 | ) |
| Operating loss             |                   | (2,182 | )                      |   | (2,154 | )      |             |   |   | 28 |   |
| Other income (expense)     |                   | (349   | )                      |   | (349   | )      |             |   |   | - |   |
| Loss before income taxes   |                   | (2,531 | )                      |   | (2,503 | )      |             |   |   | 28 |   |
| Provision for income taxes |                   | (19    | )                      |   | (19    | )      |             |   |   | - |   |
| Net loss                   | $                      | (2,550 | )                      | $      | (2,522 | )      |             |   | $ | 28 |   |

|   | (a)  This amount includes a $107 increase in the inventory obsolescence reserve for fiscal year 2009, which is an indirect effect of the change in accounting principle.  The incremental increase in the cost of goods sold would not have been recognized if the Company had not switched from using the LIFO method. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                       |   | As originally reported |   |   | As adjusted |   |   | Effect of change |   |
|----------------------------|--------|------------------------|--------|--------|-------------|--------|--------|------------------|--------|
| Revenues                   |   | $                      | 40,179 |   |        | $      | 40,179 |             |   | $ | - |   |
| Costs and expenses         |   |                   | 41,010 |   |        |   | 40,989 |             |   |   | (21 | ) |
| Operating loss             |   |                   | (831   | )      |        |   | (810   | )                |   |   | 21 |   |
| Other income (expense)     |   |                   | (345   | )      |        |   | (345   | )                |   |   | - |   |
| Loss before income taxes   |   |                   | (1,176 | )      |        |   | (1,155 | )                |   |   | 21 |   |
| Provision for income taxes |   |                   | (127   | )      |        |   | (127   | )                |   |   | - |   |
| Net loss                   |   | $                      | (1,303 | )      |        | $      | (1,282 | )                |   | $ | 21 |   |

|                                             |   | As computed under LIFO |    |   | As reported under FIFO |   |    | Effect of change |   |
|--------------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|---------|------------------|--------|
| Cash and cash equivalents                        |   | $                      | 3,816   |   |                   | $      | 3,816   |             |   | $ | - |   |
| Accounts receivable, net                         |   |                   | 4,779   |   |                   |   | 4,779   |             |   |   | - |   |
| Inventories                                      |   |                   | 5,320   |   |                   |   | 5,348   |             |   |   | 28 |   |
| Prepaid expenses and other assets                |   |                   | 412     |   |                   |   | 412     |             |   |   | - |   |
| Total current assets                             |   |                   | 14,327  |   |                   |   | 14,355  |             |   |   | 28 |   |
| Net property, plant and equipment                |   |                   | 3,725   |   |                   |   | 3,725   |             |   |   | - |   |
| Deferred income taxes                            |   |                   | 111     |   |                   |   | 111     |             |   |   | - |   |
| Other assets                                     |   |                   | 377     |   |                   |   | 377     |             |   |   | - |   |
| Total assets                                     |   | $                      | 18,540  |   |                   | $      | 18,568  |             |   | $ | 28 |   |
|                                             |   |                   |    |   |                   |   |    |             |   |   |   |   |
| Total liabilities                                |   | $                      | 9,558   |   |                   | $      | 9,558   |             |   | $ | - |   |
|                                             |   |                   |    |   |                   |   |    |             |   |   |   |   |
| Common stock                                     |   |                   | 22      |   |                   |   | 22      |             |   |   | - |   |
| Additional paid-in capital                       |   |                   | 20,708  |   |                   |   | 20,708  |             |   |   | - |   |
| Accumulated deficit                              |   |                   | (11,632 | )      |                   |   | (11,604 | )                |   |   | 28 |   |
| Accumulated other comprehensive loss             |   |                   | (116    | )      |                   |   | (116    | )                |   |   | - |   |
| Total stockholder’s equity                 |   |                   | 8,982   |   |                   |   | 9,010   |             |   |   | 28 |   |
| Total liabilities and stockholder’s equity |   | $                      | 18,540  |   |                   | $      | 18,568  |             |   | $ | 28 |   |

----

|                                             |   | As originally reported |   |   | As adjusted |   |   | Effect of change |   |
|--------------------------------------------------|--------|------------------------|--------|--------|-------------|--------|--------|------------------|--------|
| Cash and cash equivalents                        |   | $                      | 5,325  |   |        | $      | 5,325  |             |   | $ | - |   |
| Accounts receivable, net                         |   |                   | 6,483  |   |        |   | 6,483  |             |   |   | - |   |
| Inventories                                      |   |                   | 5,121  |   |        |   | 5,408  |             |   |   | 287 |   |
| Prepaid expense and other assets                 |   |                   | 414    |   |        |   | 414    |             |   |   | - |   |
| Total current assets                             |   |                   | 17,343 |   |        |   | 17,630 |             |   |   | 287 |   |
| Net property, plant and equipment                |   |                   | 4,513  |   |        |   | 4,513  |             |   |   | - |   |
| Deferred income taxes                            |   |                   | 111    |   |        |   | 111    |             |   |   | - |   |
| Other assets                                     |   |                   | 398    |   |        |   | 398    |             |   |   | - |   |
| Total assets                                     |   | $                      | 22,365 |   |        | $      | 22,652 |             |   | $ | 287 |   |
|                                             |   |                   |   |   |        |   |   |             |   |   |   |   |
| Total liabilities                                |   | $                      | 11,320 |   |        | $      | 11,320 |             |   | $ | - |   |
|                                             |   |                   |   |   |        |   |   |             |   |   |   |   |
| Common stock                                     |   |                   | 22     |   |        |   | 22     |             |   |   | - |   |
| Additional paid-in capital                       |   |                   | 20,728 |   |        |   | 20,728 |             |   |   | - |   |
| Accumulated deficit                              |   |                   | (9,369 | )      |        |   | (9,082 | )                |   |   | 287 |   |
| Accumulated other comprehensive loss             |   |                   | (235   | )      |        |   | (235   | )                |   |   | - |   |
| Treasury stock                                   |   |                   | (101   | )      |        |   | (101   | )                |   |   |   |   |
| Total stockholder’s equity                 |   |                   | 11,045 |   |        |   | 11,332 |             |   |   | 287 |   |
| Total liabilities and stockholder’s equity |   | $                      | 22,365 |   |        | $      | 22,652 |             |   | $ | 287 |   |

|                                                                                      |   | As computed under LIFO |   |   | As reported under FIFO |   |   | Effect of change |   |
|-------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------|--------|
| Net loss                                                                                  |   | $                      | (2,550 | )      |                   | $      | (2,522 | )                |   | $ | 28 |   |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |                   |   |   |                   |   |   |             |   |   |   |   |
| Impairment loss on Lynch Systems’ assets                                            |   |                   | 235    |   |                   |   | 235    |             |   |   | - |   |
| Depreciation                                                                              |   |                   | 878    |   |                   |   | 878    |             |   |   | - |   |
| Amortization of finite-lived intangible assets                                            |   |                   | 60     |   |                   |   | 60     |             |   |   | - |   |
| Stock-based compensation                                                                  |   |                   | 81     |   |                   |   | 81     |             |   |   |   |   |
| Changes in operating assets and liabilities:                                              |   |                   |   |   |                   |   |   |             |   |   |   |   |
| Accounts receivable                                                                       |   |                   | 1,704  |   |                   |   | 1,704  |             |   |   | - |   |
| Inventories                                                                               |   |                   | 88     |   |                   |   | 60     |             |   |   | (28 | ) |
| Trade accounts payable and accrued liabilities                                            |   |                   | 329    |   |                   |   | 329    |             |   |   | - |   |
| Other assets/liabilities                                                                  |   |                   | (188   | )      |                   |   | (188   | )                |   |   | - |   |
| Net cash provided by operating activities                                                 |   |                   | 637    |   |                   |   | 637    |             |   |   | - |   |
|                                                                                      |   |                   |   |   |                   |   |   |             |   |   |   |   |
| Net cash used in investing activities                                                     |   |                   | (325   | )      |                   |   | (325   | )                |   |   | - |   |
|                                                                                      |   |                   |   |   |                   |   |   |             |   |   |   |   |
| Net cash used in financing activities                                                     |   |                   | (1,821 | )      |                   |   | (1,821 | )                |   |   | - |   |
| Decrease in cash and cash equivalents                                                     |   |                   | (1,509 | )      |                   |   | (1,509 | )                |   |   | - |   |
| Cash and cash equivalents at beginning of year                                            |   |                   | 5,325  |   |                   |   | 5,325  |             |   |   | - |   |
| Cash and cash equivalents at end of year                                                  |   | $                      | 3,816  |   |                   | $      | 3,816  |             |   | $ | - |   |

----

|                                                                                      |   | As originally reported |   |   | As adjusted |   |   | Effect of change |   |
|-------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------|--------|--------|------------------|--------|
| Net loss                                                                                  |   | $                      | (1,303 | )      |        | $      | (1,282 | )                |   | $ | 21 |   |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |                   |   |   |        |   |   |             |   |   |   |   |
| Impairment loss on Lynch Systems’ assets                                            |   |                   | -      |   |        |   | -      |             |   |   | - |   |
| Depreciation                                                                              |   |                   | 1,038  |   |        |   | 1,038  |             |   |   | - |   |
| Amortization of finite-lived intangible assets                                            |   |                   | 60     |   |        |   | 60     |             |   |   | - |   |
| Gain on sale of equipment                                                                 |   |                   | (255   | )      |        |   | (255   | )                |   |   | - |   |
| Realized loss on marketable securities                                                    |   |                   | 54     |   |        |   | 54     |             |   |   | - |   |
| Stock-based compensation                                                                  |   |                   | 113    |   |        |   | 113    |             |   |   | - |   |
| Changes in operating assets and liabilities:                                              |   |                   |   |   |        |   |   |             |   |   |   |   |
| Accounts receivable                                                                       |   |                   | (101   | )      |        |   | (101   | )                |   |   | - |   |
| Inventories                                                                               |   |                   | 60     |   |        |   | 39     |             |   |   | (21 | ) |
| Trade accounts payable and accrued liabilities                                            |   |                   | (575   | )      |        |   | (575   | )                |   |   | - |   |
| Other assets/liabilities                                                                  |   |                   | (34    | )      |        |   | (34    | )                |   |   | - |   |
| Net cash used in operating activities                                                     |   |                   | (943   | )      |        |   | (943   | )                |   |   | - |   |
|                                                                                      |   |                   |   |   |        |   |   |             |   |   |   |   |
| Net cash used in investing activities                                                     |   |                   | (282   | )      |        |   | (282   | )                |   |   | - |   |
|                                                                                      |   |                   |   |   |        |   |   |             |   |   |   |   |
| Net cash provided by financing activities                                                 |   |                   | 1,317  |   |        |   | 1,317  |             |   |   | - |   |
| Increase in cash and cash equivalents                                                     |   |                   | 92     |   |        |   | 92     |             |   |   | - |   |
| Cash and cash equivalents at beginning of year                                            |   |                   | 5,233  |   |        |   | 5,233  |             |   |   | - |   |
| Cash and cash equivalents at end of year                                                  |   | $                      | 5,325  |   |        | $      | 5,325  |             |   | $ | - |   |

| 2010       |   | $      | 60  |   |
|------------|--------|--------|-----|--------|
| 2011       |   |   | 60  |   |
| 2012       |   |   | 60  |   |
| 2013       |   |   | 60  |   |
| 2014       |   |   | 38  |   |
| Thereafter |   |   | 59  |   |
| Total      |   | $      | 337 |   |

----

----

|                                        |   | Number of Stock Grants |    |   | Weighted Average Exercise Price |   |   | Weighted Average Years Remaining |   |
|---------------------------------------------|--------|------------------------|---------|--------|---------------------------------|--------|--------|----------------------------------|--------|
| Outstanding non vested at December 31, 2007 |   |                   | 15,518  |   |                            | $      | 7.15   |                             |   |   | 0.9 |   |
| Granted during 2008                         |   |                   | 45,690  |   |                            |   | 1.97   |                             |   |   | 1.0 |   |
| Vested during 2008                          |   |                   | (16,034 | )      |                            |   | 7.23   |                             |   |   | -- |   |
| Forfeited or expired during 2008            |   |                   | (734    | )      |                            |   | 6.80   |                             |   |   | -- |   |
| Outstanding non vested at December 31, 2008 |   |                   | 44,440  |   |                            |   | 1.80   |                             |   |   | 1.0 |   |
| Granted during 2009                         |   |                   | 25,320  |   |                            |   | 3.16   |                             |   |   | 1.0 |   |
| Vested during 2009                          |   |                   | (44,448 | )      |                            |   | 3.00   |                             |   |   | -- |   |
| Forfeited or expired during 2009            |   |                   | --      |   |                            |   | --     |                             |   |   | -- |   |
| Outstanding non vested at December 31, 2009 |   |                   | 25,312  |   |                            |   | 3.16   |                             |   |   | 1.0 |   |

----

|                             |   | 2009   |   |   | 2008   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
| Options to purchase common stock |   |   | 20,000 |   |   |   | 200,000 |   |
| Unvested restricted stock        |   |   | 25,320 |   |   |   | 44,440 |   |
| Totals                           |   |   | 45,320 |   |   |   | 244,440 |   |

----

|   | Segment Information |
|--------|---------------------|

----

----

| e)   | FASB Accounting Standards Codification, ASC 815 Implementation Issues, FASB Staff Positions, and American Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f)   | FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position. |
|----------------|------------------------------------------------------------------------------------------------------------------------------|

| g)   | AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB and the Topics discussed in Appendix D of ASC Abstracts. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| h)   | Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|              |   | December 31,   |   |
|-------------------|--------|----------------|--------|
|              |   | 2009           |   |   | 2008 |   |
|              |   | (in thousands) |   |
| Raw materials     |   | $              | 2,738  |   |   | $ | 2,776 |   |
| Work in process   |   |           | 1,486  |   |   |   | 1,458 |   |
| Finished goods    |   |           | 1,124  |   |   |   | 1,174 |   |
| Total Inventories |   | $              | 5,348  |   |   | $ | 5,408 |   |

| C.    | Notes Payable to Banks and Long-Term Debt |
|-----------------|-------------------------------------------|

|   | Note payable to banks and long-term debt is comprised of: |
|--------|-----------------------------------------------------------|

|                                                                                                                                                                                                                                        |   | December 31,   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|
|                                                                                                                                                                                                                                        |   | 2009           |   |   | 2008 |   |
|                                                                                                                                                                                                                                        |   | (in thousands) |   |
| Notes Payable:                                                                                                                                                                                                                              |   |           |   |
| MtronPTI revolving loan (First National Bank of Omaha (“FNBO”)) at 30-day LIBOR plus 4.75%; (4.99% at December 31, 2009), due June 30, 2010                                                                                     |   | $              | 1,696  |   |   | $ | 2,749 |   |
|                                                                                                                                                                                                                                        |   |           |   |   |   |   |   |   |
| Long-Term Debt:                                                                                                                                                                                                                             |   |           |   |   |   |   |   |   |
| MtronPTI term loan (RBC Centura Bank (“RBC”)) due October 1, 2010.  The note bears interest at LIBOR Base Rate plus 2.75%.  Interest rate swap converts loan to a fixed rate, at 7.51% at December 31, 2009 |   | $              | 2,341  |   |   | $ | 2,817 |   |
| Mtron term loan (FNBO) due January 24, 2013. The note bears interest at 30-day LIBOR plus 2.10%. Interest rate swap converts loan to a fixed rate, at 5.60% at December 31, 2009                                                       |   |           | 948    |   |   |   | 1,187 |   |
| Rice University Promissory Note at a fixed interest rate of 4.50%, due August 2009                                                                                                                                                          |   |           | 0      |   |   |   | 53 |   |
|                                                                                                                                                                                                                                        |   |           | 3,289  |   |   |   | 4,057 |   |
| Current maturities                                                                                                                                                                                                                          |   |           | 2,620  |   |   |   | 397 |   |
| Long-Term Debt                                                                                                                                                                                                                              |   | $              | 669    |   |   | $ | 3,660 |   |

----

----

| 2010  |   | $      | 2,620 |   |
|-------|--------|--------|-------|--------|
| 2011  |   |   | 299   |   |
| 2012  |   |   | 321   |   |
| 2013  |   |   | 49    |   |
| 2014  |   |   | 0     |   |
| Total |   | $      | 3,289 |   |

| D.   | Related Party Transactions |
|----------------|----------------------------|

|  E.   | Stock Option Plans |
|-----------------|--------------------|

----

| Exercise Price |                |   | Number of Shares Subject to Outstanding Options |   |   | Weighted-AverageRemainingContractual Life |   |   | Number of Shares as to Which Options are Exercisable |   |
|----------------|---------------------|--------|-------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|------------------------------------------------------|--------|
|           | $   13.17 |   |                                            |   | 20,000 |                                      |   |   | 0.4                                                  |   |   |   | 20,000 |   |
| Totals         |                |   |                                            | 20,000 |   |                                      |   | 0.4    |                                                 |   |   | 20,000 |   |

|                             |   | Number of Stock Options |     |   | Weighted Average Exercise price |   |   | Weighted Average Years Remaining |   |
|----------------------------------|--------|-------------------------|----------|--------|---------------------------------|--------|--------|----------------------------------|--------|
| Outstanding at December 31, 2007 |   |                    | 200,000  |   |                            | $      | 17.07  |                             |   |   | 1.8 |   |
| Granted during 2008              |   |                    | --       |   |                            |   | --     |                             |   |   | -- |   |
| Exercised during 2008            |   |                    | --       |   |                            |   | --     |                             |   |   | -- |   |
| Forfeited or expired during 2008 |   |                    | --       |   |                            |   | --     |                             |   |   | -- |   |
| Outstanding at December 31, 2008 |   |                    | 200,000  |   |                            |   | 17.07  |                             |   |   | 0.8 |   |
| Granted during 2009              |   |                    | --       |   |                            |   | --     |                             |   |   | -- |   |
| Exercised during 2009            |   |                    | --       |   |                            |   | --     |                             |   |   | -- |   |
| Forfeited or expired during 2009 |   |                    | (180,000 | )      |                            |   | 17.50  |                             |   |   | -- |   |
| Outstanding at December 31, 2009 |   |                    | 20,000   |   |                            | $      | 13.17  |                             |   |   | 0.4 |   |
| Exercisable at December 31, 2009 |   |                    | 20,000   |   |                            | $      | 13.17  |                             |   |   | 0.4 |   |
| Vested at December 31, 2009      |   |                    | 20,000   |   |                            | $      | 13.17  |                             |   |   | 0.4 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, 2009 |   |   | December 31, 2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                 |   | Deferred Tax      |   |   | Deferred Tax      |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   | Asset             |   |   | Liability         |   |   | Asset |   |   | Liability |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   | (in thousands)    |   |
| Inventory reserve                                                                       |   | $                 | 1,357  |   |              | $      | -- |   |   | $ | 1,199 |   |   | $ | -- |   |
| Fixed assets                                                                            |   |              | --     |   |              |   | 192 |   |   |   | -- |   |   |   | 593 |   |
| Other reserves and accruals                                                             |   |              | 532    |   |              |   | -- |   |   |   | 658 |   |   |   | -- |   |
| Undistributed foreign earnings                                                          |   |              | --     |   |              |   | 549 |   |   |   | -- |   |   |   | 611 |   |
| Other                                                                                   |   |              | --     |   |              |   | 104 |   |   |   | -- |   |   |   | 126 |   |
| Tax credit carry-forwards                                                               |   |              | 1,450  |   |              |   | -- |   |   |   | 1,231 |   |   |   | -- |   |
| Tax loss carry-forwards                                                                 |   |              | 3,204  |   |              |   | -- |   |   |   | 2,800 |   |   |   | -- |   |
| Total deferred income taxes                                                             |   |              | 6,543  |   |              | $      | 845 |   |   |   | 5,888 |   |   | $ | 1,330 |   |
| Valuation allowance                                                                     |   |              | (5,587 | )      |              |   |   |   |   |   | (4,447 | ) |   |   |   |   |
| Net deferred tax assets                                                                 |   | $                 | 956    |   |              |   |   |   |   | $ | 1,441 |   |   |   |   |   |

|            |   | 2009           |   |   | 2008   |
|-----------------|--------|----------------|--------|--------|--------|
|            |   | (in thousands) |   |
| Current:        |   |           |   |   |   |
| Federal         |   | $              | 16     |   |   | $ | -- |   |
| State and local |   |           | --     |   |   |   | -- |   |
| Foreign         |   |           | (35    | )      |   |   | (127 | ) |
| Total Current   |   |           | (19    | )      |   |   | (127 | ) |
|            |   |           |   |   |   |   |   |   |
| Deferred:       |   |           |   |   |   |   |   |   |
| Federal         |   |           | --     |   |   |   | -- |   |
| State and local |   |           | --     |   |   |   | -- |   |
| Total Deferred  |   |           | --     |   |   |   | -- |   |
|            |   | $              | (19    | )      |   | $ | (127 | ) |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2009           |   |   | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                       |   | (in thousands) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |   |           |   |   |   |   |
| Tax benefit at expected statutory rate                                                               |   | $              | 851    |   |   | $      | 408 |   |
| State taxes, net of federal benefit                                                                  |   |           | 91     |   |   |   | 43 |   |
| Permanent differences                                                                                |   |           | (8     | )      |   |   | (5 | ) |
| Research and development credit                                                                      |   |           | 213    |   |   |   | 130 |   |
| Valuation allowance                                                                                  |   |           | (1,166 | )      |   |   | (703 | ) |
| Provision for income taxes                                                                                                                                                                                                                                                                                                                                                                                                 |   | $              | (19    | )      |   | $      | (127 | ) |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 31,   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2009           |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | (in thousands) |   |
| Balance beginning of year                                                                            |   | $              | (235   | ) |   | $ | (101 | ) |
| Deferred gain on swap liability on hedge contracts                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |           | 106    |   |   |   | (157 | ) |
| Unrealized gain on available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |           | 13     |   |   |   | -- |   |
| Reclassification adjustment for gains included in operations                                                                                                                                                                                                                                                                                                                                                                                                                                |   |           | --     |   |   |   | 23 |   |
| Balance end of year                                                                                  |   | $              | (116   | ) |   | $ | (235 | ) |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December 31,   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2009           |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | (in thousands) |   |
| Deferred loss on swap liability on hedge contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $              | (129   | ) |   | $ | (235 | ) |
| Unrealized gain on available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |           | 13     |   |   |   | -- |   |
| Accumulated other comprehensive loss                                                                            |   | $              | (116   | ) |   | $ | (235 | ) |

|                        |   | December 31,   |   |
|-----------------------------|--------|----------------|--------|
|                        |   | 2009           |   |   | 2008 |   |
|                        |   | (in thousands) |   |
|                        |   |           |   |   |   |   |
| Defined contribution totals |   |           | --     |   |   | $ | 208 |   |

|   | Rent Expense |
|--------|--------------|

----

|                                                                                |   | Years Ended December 31, |   |
|-------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                |   | 2009                     |   |   | 2008 |   |
|                                                                                |   | (in thousands)           |   |
| Revenues from Operations                                                            |   |                     |   |   |   |   |
| Frequency control devices – USA                                               |   | $                        | 15,522 |   |   | $ | 17,465 |   |
| Frequency control devices – Foreign                                           |   |                     | 15,779 |   |   |   | 22,714 |   |
| Total consolidated revenues                                                         |   | $                        | 31,301 |   |   | $ | 40,179 |   |
|                                                                                |   |                     |   |   |   |   |   |   |
| Operating Loss from Operations                                                      |   |                     |   |   |   |   |   |   |
| Frequency control devices                                                           |   | $                        | (176   | ) |   | $ | 1,054 |   |
| Unallocated corporate expense                                                       |   |                     | (1,978 | ) |   |   | (1,864 | ) |
| Impairment loss on Lynch Systems’ assets                                      |   |                     | --     |   |   |   | -- |   |
| Consolidated total operating loss                                                   |   |                     | (2,154 | ) |   |   | (810 | ) |
| Investment income                                                                   |   |                     | --     |   |   |   | -- |   |
| Interest expense                                                                    |   |                     | (447   | ) |   |   | (292 | ) |
| Gain on sale of equipment                                                           |   |                     | --     |   |   |   | 255 |   |
| Other income (expense)                                                              |   |                     | 98     |   |   |   | (308 | ) |
| Other income (loss)                                                                 |   |                     | (349   | ) |   |   | (345 | ) |
| Loss Before Income Taxes from Operations                                            |   | $                        | (2,503 | ) |   | $ | (1,155 | ) |
|                                                                                |   |                     |   |   |   |   |   |   |
| Capital Expenditures                                                                |   |                     |   |   |   |   |   |   |
| Frequency control devices                                                           |   | $                        | 325    |   |   | $ | 537 |   |
|                                                                                |   |                     |   |   |   |   |   |   |
| Total Assets                                                                        |   |                     |   |   |   |   |   |   |
| Frequency control devices                                                           |   | $                        | 16,921 |   |   | $ | 18,233 |   |
| General corporate                                                                   |   |                     | 1,310  |   |   |   | 3,773 |   |
| Total assets from discontinued operations and Lynch Systems’ remaining assets |   |                     | 337    |   |   |   | 646 |   |
| Consolidated total assets                                                           |   | $                        | 18,568 |   |   | $ | 22,652 |   |

----

|                                    |   | Years Ended December 31, |   |
|-----------------------------------------|--------|--------------------------|--------|
|                                    |   | 2009                     |   |   | 2008 |   |
|                                    |   | (in thousands)           |   |
| Frequency Control Devices - Significant |   |                     |   |   |   |   |
| Foreign Revenues:                       |   |                     |   |   |   |   |
| Malaysia                                |   | $                        | 4,415  |   |   | $ | 6,274 |   |
| China                                   |   |                     | 3,681  |   |   |   | 5,518 |   |
| Mexico                                  |   |                     | 1,510  |   |   |   | 2,255 |   |
| Thailand                                |   |                     | 1,029  |   |   |   | 2,106 |   |
| Singapore                               |   |                     | 1,566  |   |   |   | 1,980 |   |
| Canada                                  |   |                     | 284    |   |   |   | 1,123 |   |
| All other foreign countries             |   |                     | 3,294  |   |   |   | 3,458 |   |
| Total foreign revenues                  |   | $                        | 15,779 |   |   | $ | 22,714 |   |

----

| Exhibit No. | Description                                                                                                                                                                                                                                                                          |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                 |
| 3.1         | Certificate of Incorporation of The LGL Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 31, 2007).                                                                                                           |
|        |                                                                                                                                                                                                                                                                                 |
| 3.2         | The LGL Group, Inc. By-Laws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 31, 2007).                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                 |
| 10.1        | The LGL Group, Inc. 401(k) Savings Plan (incorporated by reference to Exhibit 10(b) to the Company’s Annual Report on Form 10-K for the period ended December 31, 1995).                                                                                                       |
|        |                                                                                                                                                                                                                                                                                 |
| 10.2        | Directors Stock Plan (incorporated by reference to Exhibit 10(o) to the Company’s Form 10-K for the year ended December 31, 1997).                                                                                                                                             |
|        |                                                                                                                                                                                                                                                                                 |
| 10.3        | The LGL Group, Inc. 2001 Equity Incentive Plan adopted December 10, 2001 (incorporated by reference to Exhibit 4 to the Company’s Form S-8 Registration Statement filed on December 29, 2005.                                                                                  |
|        |                                                                                                                                                                                                                                                                                 |
| 10.4        | Employment Agreement by and between Mtron Industries, Inc. and South Dakota Board of Economic Development, dated December 19, 2002 (incorporated by reference to Exhibit 10(mm) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).             |
|        |                                                                                                                                                                                                                                                                                 |
| 10.5        | Registration Rights Agreement by and between the Company and Venator Merchant Fund, L.P.  dated October 15, 2004 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated October 20, 2004).                                     |
|        |                                                                                                                                                                                                                                                                                 |
| 10.6        | Loan Agreement, by and among M-Tron Industries, Inc., Piezo Technology, Inc. and RBC Centura Bank, dated September 30, 2005 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 4, 2005).                           |
|        |                                                                                                                                                                                                                                                                                 |
| 10.7        | Unconditional Guaranty for Payment by and between The LGL Group, Inc. and RBC Centura Bank, dated September 30, 2005 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 4, 2005).                                  |
|        |                                                                                                                                                                                                                                                                                 |
| 10.8        | Modification Agreement, dated as of August 18, 2009, by and among M-tron Industries, Inc., Piezo Technology, Inc. and RBC Centura Bank (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 23, 2009).             |
|        |                                                                                                                                                                                                                                                                                 |
| 10.9        | Amended and Restated Loan Agreement, dated as of August 18, 2009, by and among M-tron Industries, Inc., Piezo Technology, Inc. and First National Bank of Omaha (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 25, 2009). |
|        |                                                                                                                                                                                                                                                                                 |
| 10.10       | Form of Amended and Restated Term Note made by M-tron Industries, Inc. and Piezo Technology, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 16, 2009).            |
|        |                                                                                                                                                                                                                                                                                 |
| 10.11       | Form of Amended and Restated Revolving Note made by M-tron Industries, Inc. and Piezo Technology, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 16, 2009).       |
|        |                                                                                                                                                                                                                                                                                 |
| 10.12       | Unconditional Guaranty, dated as of August 18 2009, made by The LGL Group, Inc. for the benefit of First National Bank of Omaha (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated August 25, 2009).                                 |
|        |                                                                                                                                                                                                                                                                                 |
| 10.13       | First Amendment to the Loan Agreement by and among M-Tron Industries, Inc., Piezo Technology, Inc. and First National Bank of Omaha, dated May 31, 2005 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 6, 2005).  |

----

|                          |                                                                                                                                                                                                                                    |
|-------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.14                         | Employment Agreement, dated January 7, 1999, by and between M-tron Industries, Inc. and Robert R. Zylstra (incorporated by reference to Exhibit 10(c) to the Company’s Form 10-K for the year ended December 31, 2007).           |
|                          |                                                                                                                                                                                                                                    |
| 10.15                         | Employment Agreement, dated December 24, 2007, by and between The LGL Group, Inc. and Harold D. Castle (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 28, 2007).        |
|                          |                                                                                                                                                                                                                                    |
| 10.16                         | Employment Agreement, dated February 3, 2009, by and between The LGL Group, Inc. and Hans Wunderl (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 4, 2009).              |
|                          |                                                                                                                                                                                                                                    |
| 10.17                         | Employment Agreement, dated as of June 29, 2009, by and between The LGL Group, Inc. and Greg Anderson (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 8, 2009).  |
|                          |                                                                                                                                                                                                                                    |
| 10.18                         | Form of Indemnification Agreement by and between The LGL Group, Inc. and its executive officers and directors (incorporated by reference to Exhibit 10(q) to the Company’s Form 10-K for the year ended December 31, 2007).       |
|                          |                                                                                                                                                                                                                                    |
| 10.19                         | Form of Restricted Stock Agreement by and between The LGL Group, Inc. and each of its Directors (incorporated by reference to Exhibit 10(v) to the Company’s Form 10-K for the year ended December 31, 2007).                     |
|                          |                                                                                                                                                                                                                                    |
|     18.1  | Letter, dated March 31, 2010, to the Board of Directors of The LGL Group, Inc. from J.H. Cohn LLP regarding the preferability of newly adopted accounting principle.*                                                              |
|     21.1       | Subsidiaries of the The LGL Group, Inc.*                                                                                                                                                                                                |
|                          |                                                                                                                                                                                                                                    |
|     23.1       | Consent of Independent Registered Public Accounting Firm – J.H. Cohn LLP.*                                                                                                                                                        |
|                          |                                                                                                                                                                                                                                    |
|     31.1       | Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                |
|                          |                                                                                                                                                                                                                                    |
|     31.2       | Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                |
|                          |                                                                                                                                                                                                                                    |
|     32.1       | Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                |
|                          |                                                                                                                                                                                                                                    |
|     32.2       | Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                |

|   | * filed herewith |
|--------|------------------|

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