<PAGE>
================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-Q

(MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM      TO

                         COMMISSION FILE NUMBER 0-22583


                                 ORBIT/FR, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          DELAWARE                                        23-2874370
 (STATE OR OTHER JURISDICTION                         (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)

   506 PRUDENTIAL ROAD, HORSHAM, PA                        19044
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

                                 (215) 674-5100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


                                 NOT APPLICABLE
     (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE
                                  LAST REPORT)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]


     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]


     There were 6,084,473 shares of common stock, $.01 par value, outstanding as
of August 15, 2005.

================================================================================

<PAGE>
                                 ORBIT/FR, INC.

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                                  PAGE NO.
                                                                                                                  --------
<S>            <C>             <C>                                                                                  <C>

PART I.        FINANCIAL INFORMATION

               Item 1.        Consolidated Financial Statements

                              Consolidated Balance Sheets--June 30, 2005
                                (Unaudited) and December 31, 2004...................................................  3

                              Consolidated Statements of Operations-- Three and six months
                                ended June 30, 2005 and 2004 (Unaudited)............................................  4

                              Consolidated Statements of Cash Flows-- Six months
                               ended June 30, 2005 and 2004 (Unaudited).............................................  5

                              Notes to Consolidated Financial Statements
                                (Unaudited).........................................................................  6

               Item 2.        Management's Discussion and Analysis of Financial
                                Condition and Results of Operations................................................. 10

               Item 3.        Quantitative and Qualitative Disclosure of Market Risk................................ 13

               Item 4         Controls and procedures............................................................... 13

PART II.        Other Information

               Item 1.        Legal Proceedings..................................................................... 14

               Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds........................... 14

               Item 3.        Defaults upon Senior Securities....................................................... 14

               Item 4.        Submission of Matters to a Vote of Security Holders................................... 14

               Item 5.        Other Information..................................................................... 14

               Item 6.        Exhibits and Reports on Form 8-K...................................................... 14

Signatures.......................................................................................................... 15
</TABLE>

                                                                               2
<PAGE>
                                 ORBIT/FR, INC.
                          CONSOLIDATED BALANCE SHEETS
                   (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                        JUNE, 30           DECEMBER 31,
                                                                          2005                2004
                                                                        ---------          ------------
                                                                        UNAUDITED
<S>                                                                     <C>                <C>
                                    ASSETS

Current assets:
   Cash and cash equivalents                                              $1,333              $2,814
   Accounts receivable, less allowance of $166 and $164
     in 2005 and 2004, respectively                                        4,355               4,482
   Inventory                                                               2,315               2,265
   Costs and estimated earnings in excess of billings
     on uncompleted contracts                                              1,595                 659
   Income tax refunds receivable                                             369                 241
   Deferred income taxes                                                     324                 293
   Other                                                                     221                 447
                                                                         -------             -------
Total current assets                                                      10,512              11,201

Property and equipment, net                                                1,249               1,376
Deferred income taxes                                                        181                 158
Cost in excess of net assets acquired                                        381                 381
                                                                         -------             -------

Total assets                                                             $12,323             $13,116
                                                                         =======             =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                      $   997           $   1,167
   Accounts payable--Parent                                                  533                 521
   Accrued expenses                                                        2,784               2,674
   Customer advances                                                         894                 764
   Income taxes payable                                                       43                  20
   Billings in excess of costs and estimated earnings
     on uncompleted contracts                                                753               1,745
   Deferred income taxes                                                     125                 125
                                                                         -------             -------
Total liabilities, all current                                             6,129               7,016
                                                                         -------             -------

Stockholders' equity:
  Preferred stock: $.01 par value:
     Authorized shares--2,000,000
     Issued and outstanding shares--none                                      --                  --
  Common stock: $.01 par value:
     Authorized shares--10,000,000
     Issued shares--6,084,473                                                 61                  61
  Additional paid-in capital                                              15,173              15,173
  Accumulated deficit                                                     (8,797)             (8,891)
  Treasury stock--82,900 shares                                             (243)               (243)
                                                                         -------             -------
Total stockholders' equity                                                 6,194               6,100
                                                                         -------             -------

Total liabilities and stockholders' equity                               $12,323             $13,116
                                                                         =======             =======
</TABLE>

                             See accompanying notes.



                                                                               3
<PAGE>
                                 ORBIT/FR, INC.

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
            (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)



<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED JUNE 30,               SIX MONTHS ENDED JUNE 30,
                                                     ---------------------------               -------------------------
                                                        2005            2004                     2005            2004
                                                     ---------       ---------                 ---------       ---------
<S>                                                  <C>              <C>                      <C>             <C>

Contract revenues                                       $5,331          $5,468                  $ 11,544        $ 10,092

Cost of revenues                                         3,727           3,429                     8,016           6,489
                                                     ---------       ---------                 ---------       ---------

Gross profit                                             1,604           2,039                     3,528           3,603
                                                     ---------       ---------                 ---------       ---------

Operating expenses:

   General and administrative                              541             740                     1,158           1,329

   Sales and marketing                                     764             611                     1,680           1,211

   Research and development                                285             255                       524             489
                                                     ---------       ---------                 ---------       ---------

Total operating expenses                                 1,590           1,606                     3,362           3,029
                                                     ---------       ---------                 ---------       ---------

Operating income                                            14             433                       166             574

Other expense, net                                         (22)             (5)                      (13)            (30)
                                                     ---------       ---------                 ---------       ---------

Income (loss) before income taxes                           (8)            428                       153             544

Income tax expense                                          40              21                        59             124
                                                      ---------       ---------                 ---------       ---------

Net income (loss)                                       $  (48)         $  407                $       94       $     420
                                                     =========       =========                 =========       =========

Basic and diluted income (loss) per share             $ (0.01)         $  0.07                $   0.02         $    0.07
                                                     =========       =========                 =========       =========

Weighted average number
  common shares - basic and diluted                  6,001,573       6,001,573                 6,001,573       6,001,573
                                                     =========       =========                 =========       =========
</TABLE>




                            See accompanying notes.

                                                                               4
<PAGE>
                                 ORBIT/FR, INC.

                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED
                                                                                        JUNE 30,
                                                                               --------------------------
                                                                                   2005              2004
                                                                               ---------         --------
<S>                                                                            <C>               <C>
Cash flows from operating activities:
Net income                                                                     $      94         $    420
Adjustments to reconcile net income to net cash
   used in operating activities:
      Depreciation and amortization                                                  245              206
      Deferred income tax provision                                                  (54)              (1)
      Changes in operating assets and liabilities:
         Accounts receivable                                                         127              930
         Inventory                                                                   (50)            (799)
         Costs and estimated earnings in excess of billings
           on uncompleted contracts                                                 (936)          (1,775)
         Income tax refunds receivable                                              (128)              --
         Other current assets                                                        226             (238)
         Accounts payable and accrued expenses                                       (60)             302
         Accounts payable--Parent                                                     12              734
         Customer advances                                                           130               49
         Income taxes payable                                                         23               15
         Billings in excess of costs and estimated earnings
            on uncompleted contracts                                                (992)            (578)
                                                                               ---------         --------

Net cash used in operating activities                                             (1,363)            (735)
                                                                               ---------         --------

Cash flows from investing activities:
      Purchase of property and equipment                                            (118)             (80)
                                                                               ---------         --------

Net cash used in investing activities                                               (118)             (80)
                                                                               ---------         --------

Net decrease in cash and cash equivalents                                         (1,481)            (815)
Cash and cash equivalents at beginning of period                                   2,814            2,413
                                                                               ---------         --------
Cash and cash equivalents at end of period                                     $   1,333         $  1,598
                                                                               =========         ========
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes                                   $     124         $     80
                                                                               =========         ========
</TABLE>




                             See accompanying notes.

                                                                               5
<PAGE>
                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2005
            (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1.  OWNERSHIP AND BASIS OF PRESENTATION

     ORBIT/FR, Inc. (the "Company"), was incorporated in Delaware on December 9,
1996, as a wholly owned subsidiary of Orbit-Alchut Technologies, Ltd., an
Israeli publicly traded corporation (hereinafter referred to as the "Parent").
The Company develops, markets, and supports sophisticated automated microwave
test and measurement systems for the wireless communications, satellite,
automotive, aerospace/defense and electromagnetic compatibility (EMC)
industries, and manufactures anechoic foam, a microwave absorbing material that
is an integral component of microwave test and measurement systems. ORBIT/FR,
Inc., a holding company, supports its world wide customers through its
subsidiaries ORBIT/FR Engineering, LTD (hereinafter referred to as
"Engineering", Israel), ORBIT/FR Europe, (Germany), Advanced Electromagnetics,
Inc. ("AEMI", San Diego, CA), and Orbit Advanced Technologies, Inc. and Flam and
Russell, Inc, (Horsham, PA). The Company sells its products to customers
throughout Asia, Europe, Israel, and North and South America.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information

     The accompanying unaudited consolidated financial statements for the three
and six months ended June 30, 2005 and 2004 have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation of the consolidated
financial statements have been included. The results of interim periods are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2005. The consolidated financial statements and footnotes should be
read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in this Form 10-Q and the
Company's Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission, which included the consolidated financial
statements and footnotes for the year ended December 31, 2004.

Principles of Consolidation

     The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions of the Company and its wholly-owned subsidiaries have been
eliminated in consolidation.

Use of Estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts in the financial statements
and accompanying notes. Actual results could differ from those estimates.




                                                                               6
<PAGE>
                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2005
            (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net Income (Loss) Per Share

     Basic income (loss) per share is calculated by dividing net income (loss)
by the weighted average common shares outstanding for the period. Diluted income
(loss) per share is calculated by dividing net income (loss) by the weighted
average common shares outstanding for the period plus the dilutive effect of
stock options. The dilutive effect of stock options was not assumed for the
three and six months ended June 30, 2005 and 2004 because the effect of these
securities is antidilutive.

3.  INVENTORY

     Inventory consists of the following:


<Table>
<Caption>
                                                            JUNE 30,       DECEMBER 31,
                                                             2005             2004
                                                         ------------      ------------
                                                          (UNAUDITED)
<S>                                                      <C>               <C>
   Work-in-process                                           $1,001             $1,460
   Parts and components                                       1,314                805
                                                             ------             ------
                                                             $2,315             $2,265
                                                             ======             ======
</Table>


4.  PROPERTY AND EQUIPMENT

     Property and equipment consists of the following:

<Table>
<Caption>
                                                            JUNE 30,       DECEMBER 31,
                                                             2005             2004
                                                         ------------      ------------
                                                          (UNAUDITED)
<S>                                                      <C>               <C>
   Lab and computer equipment                                $2,264             $2,292
   Office equipment                                             922                963
   Transportation equipment                                     450                396
   Furniture and fixtures                                        13                 15
   Leasehold improvements                                       286                290
                                                             ------             ------
                                                              3,935              3,956
   Less accumulated depreciation                              2,686              2,580
                                                             ------             ------

   Property and equipment, net                               $1,249             $1,376
                                                             ======             ======
</Table>


                                                                               7
<PAGE>
                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2005
             (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)



5.  ACCRUED EXPENSES

     Accrued expenses consists of the following:

<Table>
<Caption>
                                                JUNE 30,           DECEMBER 31,
                                                 2005                 2004
                                              ----------          ------------
                                              (UNAUDITED)
<S>                                            <C>                <C>
   Accrued contract costs                         $  533            $   602
   Accrued compensation                            1,165              1,038
   Accrued commissions                               234                206
   Accrued royalties                                  57                 87
   Accrued warranty                                  360                413
   Accrued DTC settlement costs                      100                100
   Other accruals                                    335                228
                                                  ------             ------
                                                  $2,784             $2,674
                                                  ======             ======
</Table>


6.  LONG-TERM CONTRACTS

<Table>
<Caption>
                                                JUNE 30,           DECEMBER 31,
                                                 2005                 2004
                                              ----------          ------------
                                              (UNAUDITED)
<S>                                            <C>                <C>
   Accumulated expenditures on
     uncompleted contracts                        $10,995            $ 9,578
   Estimated earnings thereon                       2,800              2,477
                                                  -------            -------
                                                   13,795             12,055
   Less: applicable progress billings              12,953             13,141
                                                  -------            -------
     Total                                        $   842            $(1,086)
                                                  =======            =======

    The long-term contracts are shown in the accompanying balance sheets as follows:

    Costs and estimated earnings on
      uncompleted contracts in excess
      of billings                                 $ 1,595            $   659
    Billings on uncompleted contracts in
      excess of costs and estimated earnings         (753)            (1,745)
                                                  -------            -------
                                                  $   842            $(1,086)
                                                  =======            =======
</Table>

7.  RELATED PARTY TRANSACTIONS

     Engineering and the Parent have an agreement, whereby Engineering purchases
from the Parent electrical and mechanical production services. In addition, the
Parent provides other administrative services, including, but not limited to,
bookkeeping, computer, legal, accounting, cost management, information systems,
and production support. Engineering pays the Parent for these services based
upon a rate of cost of production services plus 21%. Engineering is leasing
office space from the Parent on an annual basis, for a rental of $61 per year.
These agreements are evaluated on an annual basis.




                                                                               8
<PAGE>
                                 ORBIT/FR, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2005
            (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8.  SEGMENT AND GEOGRAPHIC INFORMATION

     The Company operates exclusively in one industry segment, the business of
developing, marketing and supporting sophisticated automated microwave test and
measurement systems. In addition to its principal operations and markets in the
United States, the Company conducts sales, customer support and service
operations out of other geographic locations in Europe, Asia, and North America.
The following table represents financial information by geographic region for
the three and six months ended June 30, 2005 and 2004.

<TABLE>
<CAPTION>
Three months ended June 30, 2005                        North America         Europe            Asia             Total
--------------------------------                        -------------         ------            ----             -----
<S>                                                     <C>                   <C>            <C>                <C>

     Sales to unaffiliated customers                        $3,421              $816           $1,094           $ 5,331
     Cost of sales to unaffiliated customers                 2,568               548              611             3,727
                                                           -------           -------           ------           -------
     Gross profit unaffiliated customers                   $   853           $   268           $  483           $ 1,604
                                                           =======           =======           ======           =======
</TABLE>

<TABLE>
<CAPTION>
Three months ended June 30, 2004                        North America         Europe            Asia             Total
--------------------------------                        -------------         ------            ----             -----
<S>                                                     <C>                   <C>            <C>                <C>
     Sales to unaffiliated customers                        $3,439            $1,246             $783           $ 5,468
     Cost of sales to unaffiliated customers                 2,504               565              360             3,429
                                                           -------           -------           ------           -------
     Gross profit unaffiliated customers                   $   935           $   681           $  423           $ 2,039
                                                           =======           =======           ======           =======
</TABLE>

<TABLE>
<CAPTION>
Six months ended June 30, 2005                          North America         Europe            Asia             Total
------------------------------                          -------------         ------            ----             -----
<S>                                                     <C>                   <C>            <C>                <C>
     Sales to unaffiliated customers                       $ 7,340            $1,441          $ 2,763          $ 11,544
     Cost of sales to unaffiliated customers                 5,233               938            1,845             8,016
                                                          --------            ------         --------           -------
     Gross profit unaffiliated customers                  $  2,107            $  503         $    918           $ 3,528
                                                          ========            ======         ========           =======
</TABLE>

<TABLE>
<CAPTION>
Six months ended June 30, 2004                          North America         Europe            Asia             Total
------------------------------                          -------------         ------            ----             -----
<S>                                                     <C>                   <C>            <C>                <C>
     Sales to unaffiliated customers                       $ 5,703            $2,024          $ 2,365          $ 10,092
     Cost of sales to unaffiliated customers                 3,943             1,073            1,473             6,489
                                                          --------            ------         --------           -------
     Gross profit unaffiliated customers                  $  1,760            $  951         $    892           $ 3,603
                                                          ========            ======         ========           =======
</TABLE>

     In table above "North America" includes all United States operations, and
"Europe" includes subsidiaries in Germany and Israel.

9.  INCOME TAXES

     Income tax expense was not recorded during the three and six months ended
June 30, 2005 on the Company's profitable domestic operations as previous income
tax benefits on losses were reserved for in prior periods. The Company has
reflected income tax expense on profitable foreign operations during the three
and six months ended June 30, 2004.



                                                                               9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD LOOKING STATEMENTS

     Certain information contained in this Form 10-Q contains forward looking
statements (as such term is defined in the Securities Exchange Act of 1934 and
the regulations thereunder), including without limitation, statements as to the
Company's financial condition, results of operations and liquidity and capital
resources and statements as to management's beliefs, expectations or options.
Such forward looking statements are subject to risks and uncertainties and may
be affected by various factors which may cause actual results to differ
materially from those in the forward looking statements. Certain of these risks,
uncertainties and other factors, as and when applicable, are discussed in the
Company's filings with the Securities and Exchange Commission including its
Registration Statement on Form S-1 and in its most recent Annual Report on Form
10-K, as amended, a copy of which may be obtained from the Company upon request
and without charge (except for the exhibits thereto).

RECENT EVENTS

     During 2004, the Israeli Ministry and Defense implemented a policy
temporarily suspending the export of all Israeli military products to the far
east, affecting our Israeli subsidiary's ability to deliver products
manufactured totaling approximately $2.1 million. Although this delay could lead
to a cancellation of the contract to purchase the products, the Company
anticipates the suspension will be lifted during 2005 and believes that the
customers will accept delivery of the products at that time.

RESULTS OF OPERATIONS

     The following table sets forth certain financial data as a percentage of
revenues for the periods indicated:

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED JUNE 30,                   SIX MONTHS ENDED JUNE 30,
                                           ---------------------------                   -------------------------
                                              2005             2004                       2005             2004
                                              ----             ----                       ----             ----
<S>                                           <C>              <C>                        <C>              <C>
Revenues                                      100.0%           100.0%                     100.0%           100.0%
Gross profit                                   30.1             37.3                       30.6             35.7
General and
  administrative                               10.1             13.5                       10.0             13.2
Sales and marketing                            14.3             11.2                       14.6             12.0
Research and development                        5.3              4.7                        4.5              4.8
Operating income                                0.3              7.9                        1.4              5.7
Income (loss) before
  income taxes                                 (0.2)             7.8                        1.3              5.4
Net income (loss)                              (0.9)             7.4                        0.8              4.2
</TABLE>

THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THREE MONTHS ENDED JUNE 30, 2004.

     Revenues. Revenues for the three months ended June 30, 2005 were
approximately $5.3 million compared to approximately $5.5 million for the three
months ended June 30, 2004, a decrease of approximately $137,000 or 3%. Revenues
from the wireless and EMC markets increased approximately $540,000 and $253,000
respectively, while revenues from the satellite, defense, automotive, and
university markets decreased $413,000, $227,000, $192,000 and $98,000,
respectively. Geographically, Asian revenues increased approximately $311,000,
while revenues from Europe and North America decreased approximately $430,000
and $18,000 from prior year levels.

     Cost of revenues. Cost of revenues for the three months ended June 30, 2005
were approximately $3.7 million compared to approximately $3.4 million for the
three months ended June 30, 2004, an increase of approximately $298,000 or 9%.
Gross margins decreased to 30% for the three months ended June 30,



                                                                              10
<PAGE>
2005 from 37% for the three months ended June 30, 2004. The decreased gross
margins are the result of cost overruns on large US defense contracts.

     General and administrative expenses. General and administrative expenses
for the three months ended June 30, 2005 were $541,000 compared to $740,000 for
the three months ended June 30, 2004, a decrease of approximately $199,000 or
27%. As a percentage of revenues, general and administrative expenses decreased
to 10.1% for the three months ended June 30, 2005 from 13.5% for the three
months ended June 30, 2004. The decreased costs are largely a result of 2004
compliance costs not repeated in 2005.

     Sales and marketing expenses. Sales and marketing expenses for the three
months ended June 30, 2005 were $764,000 compared to $611,000 for the three
months ended June 30, 2004, an increase of approximately $153,000 or 25%. As a
percentage of revenues, sales and marketing expenses increased to 14.3% for the
three months ended June 30, 2005, from 11.2% for the three months ended June 30,
2004. The increased sales and marketing expenses were largely due to increased
marketing efforts in Europe and Asia.

     Research and development expenses. Research and development expenses for
the three months ended June 30, 2005 were $285,000 compared to $255,000 for the
three months ended June 30, 2004, a increase of approximately $30,000 or 12%.

     Other expense, net. Other expense, net for the three months ended June 30,
2005 was approximately $22,000 compared to $5,000 for the three months ended
June 30, 2004, an increase of approximately $17,000. The Company recognizes
interest income and expense and foreign currency translation gains and losses as
other income (expense).

     Income taxes. Income tax expense for the three months ended June 30, 2005
was $40,000 compared to $21,000 for the three months ended June 30, 2004, an
increase in expense of $19,000. The Company records income tax expense on
profitable operations and income tax benefits on losses recorded by its
subsidiaries where applicable. Income tax expense was not recorded during the
six months ended June 30, 2005 on the Company's profitable domestic operations
as previously recorded deferred income tax benefits on losses were reserved for.

SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO SIX MONTHS ENDED JUNE 30, 2004.

     Revenues. Revenues for the six months ended June 30, 2005 were
approximately $11.5 million, compared to approximately $10.1 million for the six
months ended June 30, 2004, an increase of approximately $1.4 million or 14%.
Revenues from the wireless, defense, and EMC markets increased approximately
$1.0 million, $833,000, and $81,000 respectively, while revenues from the
automotive, satellite, and university markets decreased approximately $271,000,
$206,000, and $16,000, respectively. Geographically, revenues from North America
and Asia increased approximately $1.6 million and $398,000, respectively, while
revenues from Europe decreased approximately $583,000 from prior year levels.
The increased sales are largely a result of significant completion of large U.S.
defense, and Asian and European wireless contracts.

     Cost of revenues. Cost of revenues for the six months ended June 30, 2005
were approximately $8.0 million compared to approximately $6.5 million for the
six months ended June 30, 2004, an increase of approximately $1.5 million or
24%. Gross margins decreased to 31% for the six months ended June 30, 2005 from
36% for the six months ended June 30, 2004. The decreased gross margins are the
result of cost overruns on large US defense contracts and increased reserves on
Asian wireless and satellite contracts.




                                                                              11
<PAGE>
     General and administrative expenses. General and administrative expenses
for the six months ended June 30, 2005 were approximately $1.2 million compared
to approximately $1.3 million for the six months ended June 30, 2004, a decrease
of approximately $171,000 or 13%. As a percentage of revenues, general and
administrative expenses decreased to 10.0% for the six months ended June 30,
2005 from 13.2 % for the six months ended June 30, 2004. The decreased costs are
largely a result of 2004 compliance costs not repeated in 2005.

     Sales and marketing expenses. Sales and marketing expenses for the six
months ended June 30, 2005 were approximately $1.7 million, compared to
approximately $1.2 million for the six months ended June 30, 2004, and increase
of approximately $469,000. As a percentage of revenues, sales and marketing
expenses increased to 14.6% for the six months ended June 30, 2005, from 12.0%
for the six months ended June 30, 2004. The increased sales and marketing
expenses were largely due to increased marketing efforts in Europe and Asia.

     Research and development expenses. Research and development expenses for
the six months ended June 30, 2005 were $524,000 compared to $489,000 for the
six months ended June 30, 2004, an increase of approximately $35,000 or 7%. The
increase is due both to research and development efforts expended during the six
months ended June 30, 2005 on the Company's 959 Spectrum software product, and
to the Company utilization of its resources to meet contract deadlines in 2004.
As a percentage of revenues, research and development expenses decreased to 4.5%
for the six months ended June 30, 2005, from 4.8% for the six months ended June
30, 2004.

     Other expense net, Other expense, net for the six months ended June 30,
2005 was approximately $13,000 compared to $30,000 for the six months ended June
30, 2004, a decrease of approximately $17,000. The Company recognizes interest
income and expense and foreign currency translation gains and losses as other
income (loss).

     Income taxes. Income tax expense for the six months ended June 30, 2005 was
$59,000 compared to $124,000 of income tax expense for the six months ended June
30, 2004. The Company records income tax expense on profitable operations and
income tax benefits on losses recorded by its subsidiaries where applicable.
Income tax expense was not recorded during the six months ended June 30, 2005 on
the Company's profitable domestic operations as previously recorded deferred
income tax benefits on losses were reserved for.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities during the six months ended June 30,
2005 was approximately $1.4 million compared to approximately $735,000 used in
operating activities during the six months ended June 30, 2004. The Company's
net income, adjusted for non-cash items, provided $285,000 of operating cash,
compared to $625,000 provided by operating activities during the six months
ended June 30, 2004. Changes in the Company's operating assets and liabilities
during the six months ended June 30, 2005 used $1.6 million in operating cash
compared to $1.4 million used during the six months ended June 30, 2004.

     Net cash used in investing activities during the six months ended June 30,
2005 for the purchase of property and equipment was approximately $118,000
compared to approximately $80,000 invested during the six months ended June 30,
2004.

     The Company has exposure to currency fluctuations as a result of billing
certain of its contracts in foreign currency. When selling to customers in
countries with less stable currencies, the Company bills in U.S. dollars. For
the six months ended June 30, 2005, approximately 91% of the Company's revenues
were billed in U.S. dollars. Substantially all of the costs of the Company's
contracts, including costs subcontracted to the Parent, have been, and will
continue to be, U.S. dollar-denominated except for wages






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<PAGE>
for employees of the Company's Israeli and German subsidiaries, which are
denominated in local currency. The Company intends to continue to enter into
U.S. dollar-denominated contracts.

INFLATION AND SEASONALITY

     The Company does not believe that inflation or seasonality has had a
significant effect on the Company's operations to date.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risk from fluctuations in foreign currency
exchange rates. We manage exposure to variability in foreign currency exchange
rates primarily through the use of natural hedges, as both liabilities and
assets are denominated in the local currency. However, different durations in
our funding obligations and assets may expose us to the risk of foreign exchange
rate fluctuations. We have not entered into any derivative instrument
transactions to manage this risk. Based on our overall foreign currency rate
exposure at June 30, 2005, we do not believe that a hypothetical 10% change in
foreign currency rates would materially adversely affect our financial position.

ITEM 4. CONTROLS AND PROCEDURES

     (a)  Evaluation of disclosure controls and procedures. The Company's
          disclosure controls and procedures (as defined in Rule 13a-15(e) or
          Rule 15d-15(e) under the Exchange Act) are designed to ensure that
          information required to be disclosed by us in the reports that are
          filed or submitted under the Securities Exchange Act of 1934 is
          recorded, processed, summarized and reported within the time periods
          specified in the Securities and Exchange Commission's rules and forms.
          These disclosure controls and procedures include controls and
          procedures designed to ensure that information required to be
          disclosed under the Securities Exchange Act of 1934 is accumulated and
          communicated to our management on a timely basis to allow decisions
          regarding required disclosure. The Company evaluated the effectiveness
          of the design and operation of our disclosure controls and procedures
          as of December 31, 2004. Based on this evaluation, the Company's Chief
          Executive Officer and Chief Financial Officer previously concluded
          that as of December 31, 2004, these controls and procedures were
          effective.

     (b)  Change in Internal Controls. There have been no changes in internal
          control over financial reporting identified in connection with the
          foregoing evaluation that occurred during the Company's fiscal quarter
          ended December 31, 2004 that have materially affected, or are
          reasonably likely to materially affect, the Company's internal control
          over financial reporting.




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<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The Company is not currently subject to any material legal proceedings and
is not aware of any threatened litigation, unasserted claims or assessments that
could have a material adverse effect on the Company's business, operating
results, or financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - NOT
        APPLICABLE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES--NOT APPLICABLE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS--NOT APPLICABLE

ITEM 5. OTHER INFORMATION--NOT APPLICABLE

ITEM 6. EXHIBITS

          31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Israel
               Adan, President and Chief Executive Officer.

          31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Dave
               Lubbe, Chief Financial Officer.

          32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Israel
               Adan, President and Chief Executive Officer.

          32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Dave
               Lubbe, Chief Financial Officer.




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<PAGE>
ORBIT/FR, INC.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                                     ORBIT/FR, INC.
                                           -------------------------------------
                                                      Registrant


Date: August 15, 2005
                                                   /s/  Israel Adan
                                           -------------------------------------
                                           President and Chief Executive Officer


Date: August 15, 2005
                                                     /s/  Dave Lubbe
                                           -------------------------------------
                                                 Chief Financial Officer






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