SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C.  20549





FORM
      10-KSB





{X}ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF


THE
      SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)





For
      the fiscal year ended June 30, 2007





Commission
      File Number:  0-13011





TNR
      TECHNICAL,
      INC.


(Exact
      name of Registrant as specified in its charter)






New
                York
            11-2565202(State
                of jurisdictioni of ncorporation or organization)
            (I.R.S.
                Employer Identification Number)








301
                Central Park Drive, Sanford, Florida
            32771(Address
                of principal executive offices)
            (Zip
                Code)Registrant's
                telephone number, including area code:
            (407)
                321-3011






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


None




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





Common
      Stock, $.02 Par Value  (Title
        of
        Class)




Check
      whether the Registrant is not required to file reports pursuant to Section
      13 or
      15(d) of the Exchange Act. [ ]





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





Indicate
      by check mark if disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of Registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in part III of this
      Form 10-KSB or any amendment to this Form 10-KSB
      [  ].





Indicate
      by check mark whether the Registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
      [ ]
      No [X]





State
      issuer’s revenues for its most recent fiscal year: $ 9,615,164.




As
      of
      September 21, 2007, the number of shares held by non-affiliates was 132,091
      shares.  The approximate market value based on the last sale (i.e. $35
      per share) of the Company’s Common Stock as of the  trade date of
      September 21, 2007 held by non-affiliates was approximately
      $­­4,623,185.  The number of shares outstanding of the
      issuer's Common Stock as of September 21, 2007 was 307,795.


1


FORWARD-LOOKING
      STATEMENTS





This
      annual report on Form 10-KSB contains forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E
      of
      the Securities Exchange Act of 1934, as amended and the Private Securities
      Litigation Reform Act of 1995 that are subject to risks and uncertainties.
      You
      should not place undue reliance upon those statements as they are subject to
      uncertainties and factors relating to our operations and business environment,
      all of which are difficult to predict and many of which are beyond our control.
      Forward-looking statements include statements regarding our plans, objectives,
      goals, strategies, future events, capital expenditures, future results, our
      competitive strengths, our business strategy, our industry trends and other
      statements regarding matters that are not historical facts. These statements
      often include words such as “may,” “believe,” “expect,” “anticipate,” “intend,”
“plan,” “estimate” or similar expressions. These statements are based on
      assumptions that we have made in light of our industry experience as well as
      our
      perceptions of historical trends, current conditions, expected future
      developments and other factors we believe are appropriate under the
      circumstances. As you read and consider this report on form 10-KSB, you should
      understand that these statements are not guarantees of performance or results.
      They involve risks, uncertainties and assumptions. Although we believe that
      these forward-looking statements are based on reasonable assumptions, you should
      be aware that many factors could affect our actual financial results or results
      of operations and could cause actual results to differ materially from those
      in
      the forward-looking statements. These factors include but are not limited to:
      (a) changes in levels of competition from current competitors and potential
      new
      competition; (b) costs of acquiring inventory; (c) credit risk associated with
      our customers; (d) our ability to successfully recover in the event of a
      disaster; (e) the extent to which we cannot control our fixed and variable
      costs; (f) fluctuations in the market price of the raw materials related to
      our
      goods;  (g) general economic conditions in the markets in which we
      operate; and (h) the other uncertainties which are described under “Risk
      Factors” in Item 1.  The foregoing should not be construed as an
      exhaustive list of all factors that could cause actual results to differ
      materially from those expressed in forward-looking statements made by
      us.  All forward-looking statements included in this document are made
      as of the date hereof, based on information available to the Company on the
      date
      thereof, and the Company assumes no obligation to update any forward-looking
      statements.





PART
      I


Item1.
            Description
                of Business





General





TNR
      Technical, Inc. (the “Company”) was incorporated on October 4, 1979 under
      the laws of the State of New York.  The Company designs, assembles and
      markets primary and secondary batteries to a variety of industrial
      markets.  The Company is an authorized distributor for several major
      battery manufacturers, the products of which are distributed nationally by
      the
      Company.   The Company's business is conducted principally at its
      two facilities in Sanford, Florida and Santa Ana, California.




2




The
      Company is an authorized distributor of nickel-cadmium, nickel metal hydride,
      alkaline, lithium and sealed lead acid batteries manufactured by Saft America,
      Power-Sonic, Varta Microbattery, Enersys, Duracell, Renata, GP Batteries, CSB
      Battery, Ultralife Batteries, Eveready Battery, and Sanyo Energy. As an
      authorized distributor, the Company purchases cells, assembles them into battery
      packs and maintains inventory for resale.  The Company sells its batteries
      and/or battery packs to the original equipment manufacturers, municipalities,
      hotels/resorts, military, aerospace, government agencies, electrical wholesalers
      and battery distributors without geographical limitation and on a non-exclusive
      basis.  The Company also designs and manufactures battery packs to
      customers’ specifications.  The Company’s batteries have applications in
      marine, auto, motorcycle, personal watercraft, photography, power tools,
      watches, instrumentation, laptops, CNC, Airsoft, surveying equipment, radio
      control, mobile radios, alarms, U.P.S., door locks, and emergency lighting
      as
      well as other various consumer products.




During
      the years ended June 30, 2007 and 2006, 48% and 46%, respectively, of products
      were purchased from one supplier; however, the Company has the ability to
      purchase readily available inventory from various other suppliers.





Sales
      under industrial and distribution programs accounted for substantially all
      of
      the Company’s total revenues during the Company’s past three fiscal years and no
      one customer accounted for 10% or more of the Company’s total revenues during
      these years.  As of June 30, 2007 and June 30, 2006, the Company had
      no significant backlog.





Competition





There
      are
      numerous companies producing and marketing batteries that compete with those
      sold by the Company, including larger companies, battery manufacturers and
      companies with a wider range of products and greater financial and technical
      resources than the Company.  Smaller start-up companies that purchase
      directly from offshore battery manufacturers and distributors, selling into
      the
      marketplace via web-based type operations are also entering the
      industry.  It should be noted that the Company's products and proposed
      products are technological in nature and that modern technology often progresses
      rapidly. Accordingly, the Company's present and proposed products are subject
      to
      the risk of obsolescence because of technological innovation by
      competitors.





Employees





At
      September 21, 2007, the Company leases from a non-affiliated party its staff
      which includes twenty-one persons.  Such staff includes eight
      salespersons (including two executive officers), two accounting and
      administrative staff, three warehouse and shipping clerks and eight production
      workers.  For a fee which is paid by the Company, the leasing company
      provides the payroll, 401(k) plan, worker’s compensation insurance and health
      insurance.  The Company’s agreement with the leasing company can be
      terminated on short notice at any time by the Company.








**Risk
      Factors**




*The
      following risks and uncertainties, as well as others described in this Annual
      Report on Form 10-KSB could materially adversely affect our business, results
      of
      operations and financial condition.  Security holders are cautioned
      that these and other factors may affect future performance and cause actual
      results to differ from those which may, from time to time, be
      anticipated.*




3




*We
      operate in an extremely competitive industry and are subject to continual
      pricing pressure.*





We
      compete with a number of battery manufacturers and distributors, as well as
      a
      large number of smaller, regional competitors and are therefore subject to
      continual and significant pricing pressures. These pricing pressures have
      prevented us from fully passing through to customers increased costs related
      to
      increased pricing of raw materials associated with the manufacture of batteries,
      such as nickel and lead, and the increased cost of freight for incoming and
      outgoing product due to fuel surcharges.  We expect heightened
      competitive pricing pressure as Chinese manufacturers expand their export
      capacity and increase their marketing presence in our markets.  Our
      ability to maintain and improve our operating margins has depended, and
      continues to depend, on our ability to control and reduce our
      costs.  We cannot assure you that we will be able to continue to
      reduce our operating expenses, to raise or maintain our prices or increase
      our
      unit volume, in order to maintain or improve our operating results.





*The
      failure of critical computer systems could seriously affect our sales and
      operations.*





We
      operate a number of critical computer systems that can fail for a variety of
      reasons.  If such a failure were to occur, then we may not be able to
      sufficiently recover from the failure in time to avoid the loss of data or
      adverse impact to certain of our operations that are dependent on such
      systems.  This could result in lost sales and the inefficient
      operation of our facilities for the duration of such a failure.





*Terrorist
      acts or acts of war could cause damage or disruption to our
      operations.*





Whether
      in the United States or abroad, war or acts of terrorism could cause damage
      or
      disruption to our operations, our suppliers, channels to market or customers,
      or
      could cause costs to increase, or create political or economic instability,
      any
      of which could have a material adverse effect on our business.





*We
      are dependent upon our vendors for the manufacture and supply of our
      products.*





Our
      performance depends on our ability to purchase our products in sufficient
      quantities at competitive prices and on our vendors’ ability to make and deliver
      high quality products in a cost effective, timely manner.  We have no
      long-term purchase contracts or other contracts that provide continued supply,
      pricing or access to new products and any vendor or distributor could
      discontinue selling to us at any time.  There can be no assurance that
      we will be able to acquire products we require in sufficient quantities or
      on
      terms that are acceptable to us in the future and there can be no assurance
      that
      our vendors will make and deliver high quality products in a cost effective,
      timely manner.  In addition, all products we purchase from vendors in
      the Far East must be shipped to our warehouse by freight carriers and there
      can
      be no assurance that we will be able to obtain sufficient capacity at favorable
      rates.  Our inability to acquire suitable products in a cost
      effective, timely manner or the loss of one or more key vendors or freight
      carriers could have a negative impact on our business.




4




*We
      are dependent on certain key executives.*





Our
      success depends to a significant extent upon the abilities of our senior
      management.  The loss of the services of any of the members of our
      senior management or of certain other key employees could have a significant
      adverse effect on our business.  In addition, our performance will
      depend upon our ability to attract and retain qualified management and sales
      personnel.  There can be no assurance that the members of our existing
      management team will be able to manage the Company or our growth or that we
      will
      be able to attract and hire additional qualified personnel as needed in the
      future.





*If
      we
      are sued on a product liability claim, our insurance policies may not be
      sufficient.*





Although
      we maintain general liability insurance, our insurance may not cover all
      potential types of product liability claims to which distributors for
      manufacturers are exposed or may not be adequate to indemnify us for all
      liability that may be imposed.  Any imposition of liability that is
      not covered by insurance or is in excess of our insurance coverage could harm
      our business.





*Our
      operations could be materially interrupted, and we may suffer a large amount
      of
      loss, in the case of fire, casualty or theft at one of our warehousing
      facilities.*





In
      the
      event of material damage to, or loss of, the warehousing facilities where our
      products are located due to fire, casualty, theft, severe weather, flood or
      other similar causes, we would be forced to replace any assets lost in those
      disasters within the limits of our insurance.  Additionally, any
      interruption in operations at one of our major suppliers as a result of fire,
      casualty, theft, severe weather, flood or other similar causes could cause
      a
      disruption in the availability of product and/or an increase in product
      cost.





*Laws
      regulating the transportation of batteries may be enacted which could result
      in
      the imposition of additional costs that could harm our ability to be
      profitable.*





The
      transportation of certain batteries is regulated both domestically and
      internationally. Under recently revised United Nations recommendations and
      as
      adopted by the International Air Transport Association, certain chemistries
      require a Class 9 designation for transportation.  The revised United
      Nations recommendations are not United States law until such time as they are
      incorporated into the Department of Transportation Hazardous Material
      Regulations.  At present it is not known if or when the proposed
      regulations would be adopted by the United States.  Future Department
      of Transportation or International Air Transport Association regulations or
      enforcement policies could impose costly transportation
      requirements.





*We
      cannot predict our future capital needs and we may not be able to secure
      additional financing if needed.*





We
      have
      planned for an increase in sales and, if we experience sales in excess of our
      plan, our working capital needs and capital expenditures would likely increase
      from that currently anticipated. Our ability to meet this additional customer
      demand would depend on our ability to arrange for additional equity or debt
      financing in the event that cash flow from sales lags behind the increased
      working capital requirements.




5




**Risks
      Relating to an Investment in our Common Stock**





*Our
      business is subject to changing regulations relating to corporate governance
      and
      public disclosure that has increased both our costs and the risk of
      noncompliance.*





Because
      our common stock is publicly traded, we are subject to certain rules and
      regulations of federal, state and financial market exchange entities charged
      with the protection of investors and the oversight of companies whose securities
      are publicly traded.  These entities, including the Public Company
      Accounting Oversight Board and the Securities and Exchange Commission have
      recently issued new requirements and regulations and continue to develop
      additional regulations and requirements in response to recent laws enacted
      by
      Congress, most notably Section 404 of the Sarbanes-Oxley Act of
      2002.  Our efforts to comply with these new regulations have resulted
      in, and are likely to continue to result in, materially increased general and
      administrative expenses and a significant diversion of management time and
      attention from revenue-generating and cost-reduction activities to compliance
      activities.  Compliance with Section 404 of the Sarbanes-Oxley Act of
      2002 and the related regulations regarding our required assessment of our
      internal controls over financial reporting and obtaining an associated
      independent registered public accounting firm’s audit of that assessment will
      require the commitment of significant financial and managerial
      resources.  There is no assurance that these efforts will be completed
      on a timely and successful basis.  Because these laws, regulations and
      standards are subject to varying interpretations, their application in practice
      may evolve over time as new guidance becomes available.  This
      evolution may result in continuing uncertainty regarding compliance matters
      and
      additional costs necessitated by ongoing revisions to our disclosure and
      governance practices.  In the event that our internal controls over
      financial reporting are not effective as defined under Section 404 of the
      Sarbanes-Oxley Act of 2002, there may be a material adverse impact on investor
      perceptions and a decline in the market price of our stock.  In
      addition, the board of directors of the Company reserves the right to file
      a
      form 15 to cease being a reporting company under the Exchange Act in the event
      that it determines that the Company qualifies to file said form and in the
      event
      that the Board determines that the costs of remaining a reporting company
      outweigh the benefits of same. A decision to cease reporting by next July 2008
      may be made at any time and would result in the removal of our common stock
      from
      trading on the OTC Bulletin Board where it currently trades
      sporadically.  If our common stock is removed from the OTC Bulletin
      Board, we would expect it to be available for quotation on the Pink sheets,
      but
      with a possible decrease in liquidity.







*We
      lack an established trading market for our common stock, and you may be unable
      to sell your common stock at attractive prices or at all.*






There
      is
      currently a limited and sporadic trading market for our common stock in the
      OTC
      electronic bulletin board under the symbol “TNRK.”  There can be no
      assurances given that an established public market will be obtained for our
      common stock or that any public market will last. The trading price of the
      common stock depends on many factors, including:




6




•
            
            The
                markets for similar securities;•
            
            Our
                financial condition, results of operations and prospects;•
            
            The
                publication of earnings estimates or other research reports and
                speculation in the press or investment community;•
            
            Changes
                in our industry and competition; and•
            
            General
                market and economic conditions.





*The
      market price for our common stock may be highly volatile.*





The
      market price for our common stock may be highly volatile. A variety of factors
      may have a significant impact on the market price of our common stock,
      including:





•
            
            The
                publication of earnings estimates or other research reports and
                speculation in the press or investment community;•
            
            Changes
                in our industry and competitors;•
            
            Our
                financial condition, results of operations and prospects;•
            
            Any
                future issuances of our common stock, which may include primary offerings
                for cash, issuances in connection with business acquisitions, and
                the
                grant or exercise of stock options from time to time;•
            
            Possible
                payment of dividends;•
            
            General
                market and economic conditions; and•
            
            Any
                outbreak or escalation of hostilities, which could cause a recession
                or
                downturn in our economy.





In
      addition, the markets in general can experience extreme price and volume
      fluctuations that can be unrelated or disproportionate to the operating
      performance of the companies listed or quoted. Broad market and industry factors
      may negatively affect the market price of our common stock, regardless of actual
      operating performance.





*We
      may not pay cash dividends in the future.*





Except
      for a one time special dividend of $4.75 per share paid on January 3, 2007
      to
      record holders of December 21, 2006, no cash dividends have been paid by our
      company on our common stock. The future payment by us of cash dividends on
      our
      common stock, if any, rests within the discretion of our board of directors
      and
      will depend, among other things, upon our earnings, our capital requirements
      and
      our financial condition as well as other relevant factors.  We can
      provide no assurances that we will pay cash dividends upon our common stock
      in
      the future.




7




*Future
      sales of common stock by management and other stockholders may have an adverse
      effect on the then prevailing market price of our common
      stock.*





Future
      sales of restricted shares of our common stock made under Rule 144 or shares
      of
      common stock that are part of the public float may have an adverse effect on
      the
      then prevailing market price, if any, of our common stock.





Item
                2.
            Description
                of Properties





The
      Company’s principal executive office, sales, distribution and assembly facility
      is located at 301 Central Park Drive, Sanford, Florida 32771. These facilities,
      which consist of approximately 8,000 square feet of space, are leased from
      RKW
      Holdings Ltd., a Florida Limited Partnership, controlled by Wayne Thaw, an
      executive officer, director and shareholder of the Company.  The
      Florida lease originally provided for a term of ten years expiring May 31,
      2006
      with annual increases of five percent over the preceding year's base
      rent.  The Company entered into an agreement to extend the current
      lease for a period of five years through May 31, 2011 with a current monthly
      rent of $8,947 (including sales taxes), with annual increases of 4% over the
      preceding year’s base rent. The Company is also responsible for the payment of
      all insurance, property, and other taxes related to the leased
      facilities.  Property taxes estimated at $895 per month, inclusive of
      sales taxes, are accrued on a monthly basis.





The
      Company also leases from Grove Investment Company, a non-affiliated company,
      a
      sales, distribution and assembly facility at 3400 W. Warner Avenue, Suites
      K, L
      and M, Santa Ana, CA 92704.  These facilities consist of 6,480 square
      feet of space.  The California lease commenced on July 1, 2000 and
      expires on June 30, 2008.  The Company currently pays a base rent of
      $6,156 per month, which is subject to increase for its share of the landlord’s
      increased operating expenses.  The Company owns production equipment
      consisting primarily of welding, soldering, testing, pneumatic and material
      handling equipment, and inspection equipment which has been sufficient for
      its
      needs to date.





Item
                3.
            Legal
                Proceedings





There
      are
      no material legal proceedings to which the Company is a party.





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





No
      matters were submitted to a vote of security holders during the fourth quarter
      of fiscal 2007.








PART
      II





Item
                5.
            Market
                for Registrant’s Common Equity, Related Stockholder Matters and Small
                Business


Issuer
      Purchases of Equity
      Securities.




8





Principal
      Market and Stock Prices.





The
      Company’s Common Stock may be quoted in the over-the-counter
      market.  The high and low sales prices of the Company’s Common Stock
      are shown below for the two years ended June 30, 2007.




High
              
              
              LowFiscal
                  2007First
                  Quarter
              
              $
              30.00
              
              
              $
              25.75Second
                  Quarter
              
              
              40.00
              
              
              
              23.50Third
                  Quarter
              
              
              35.00
              
              
              
              27.05Fourth
                  Quarter
              
              
              42.00
              
              
              
              29.00Fiscal
                  2006First
                  Quarter
              
              $
              23.00
              
              
              $
              20.50Second
                  Quarter
              
              
              23.00
              
              
              
              21.60Third
                  Quarter
              
              
              24.80
              
              
              
              22.60Fourth
                  Quarter
              
              
              28.00
              
              
              
              23.25


The
      closing last sale of the Company’s Common Stock on September 21, 2007 was
      $35.00. The foregoing quotation and those sale prices contained in the table
      above represent approximately inter-dealers prices, without retail markup,
      markdown or commission.  Such sales prices should not be viewed as
      necessarily indicative of the price that could have been obtained on that date
      for a substantial number of securities due to the limited market and trading
      volume for the Company's Common Stock.





The
      approximate number of holders of record of the Company’s Common Stock, as of
      September 21, 2007 was 410 as supplied by the Company’s transfer agent, American
      Stock Transfer Company, 59 Maiden Lane, New York,
      NY  10038.





Except
      for a one time special dividend of $4.75 per share paid on January 3, 2007
      to
      record holders of December 21, 2006, no cash dividends have been paid by the
      Company on its Common Stock.  In the future, regular or special
      dividends may be paid by the Company at the sole discretion of the Company’s
      Board of Directors; however, there can be no assurances given that any regular
      or special dividends will be declared and paid by the Company.





Stock
      Repurchases





Management
      of the Company over the years received a number of comments from its odd lot
      stockholders regarding the costs associated with any sale of their odd
      lots.  Further, management would like to reduce the Company’s expense
      of maintaining mailings to odd lot holders.  Accordingly, TNR from
      time-to-time over a period of approximately ten years has privately purchased
      from holders of its Common Stock, such odd lots (i.e. 99 shares or less) and
      on
      a limited basis, round lots of 100 or more shares.  The purchase price
      paid was based upon the market value of the Company’s Common Stock on the NASD
      electronic bulletin board of the Company’s Common Stock for the preceding
      trading day. The Company’s odd lot repurchase plan, which began in December,
      1995, originally terminated in June 2005, but was extended through January
      31,
      2006 to provide additional time to stockholders to present their odd lot shares
      for repurchase.  Stock repurchases of the Company’s Common Stock have
      ceased for the foreseeable future.




9




During
      the fiscal years 2006, 2005, 2004, 2003, 2002, and 2001, the Company redeemed
      a
      total of 978 shares from 18 persons; 5,733 shares from 158 persons; 1,713 shares
      from 37 persons; 598 shares from 29 persons; 1,600 shares from 68 persons and
      729 shares from 22 persons, respectively.  In June 2003, the Company
      also repurchased a total of 691 shares held by a director and the Company’s
      former chief executive officer at a purchase price of $12.00 per
      share.  During the year ended June 30, 2007, no stock repurchases took
      place.





Recent
      Sales of Unregistered Securities





During
      the past three fiscal years, the Company had no sales of unregistered
      securities, except for the exercise of options to purchase common stock by
      Wayne
      Thaw (36,000 shares), Kathie Thaw (10,000 shares) and Patrick Hoscoe (2,000
      shares) during fiscal 2007.  Exemption is claimed under Section 4(2)
      and/or Rule 506 of Regulation D, under the Securities Act of 1933, as amended,
      in connection with the issuance of an aggregate of 48,000 shares to our
      executive officers (and former executive officer in the case of Kathie
      Thaw).





Item
                6.
            Management’s
                Discussion and Analysis of  Financial Condition and Results of
                Operations.







Overview





The
      Company designs, assembles and markets primary and secondary batteries to a
      variety of industrial markets.  The Company is an authorized
      distributor for several major battery manufacturers, the products of which
      are
      distributed nationally by the Company.   The Company's business
      is conducted principally at its two facilities in Sanford, Florida and Santa
      Ana, California.





Critical
      Accounting Policies





Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our financial statements, which have been prepared in accordance
      with
      generally accepted accounting principles in the United States. The preparation
      of financial statements requires management to make estimates and disclosures
      on
      the date of the financial statements. On an on-going basis, we evaluate our
      estimates including, but not limited to, those related to allowance for trade
      receivables, reserve on inventories, valuation of compensation expense on
      stock-based awards and valuation of deferred taxes. We use authoritative
      pronouncements, historical experience and other assumptions as the basis for
      making judgments. Actual results could differ from those estimates. We believe
      that the following critical accounting policies affect our more significant
      judgments and estimates in the preparation of our financial
      statements.





Management
      has discussed the selection of critical accounting policies and estimates with
      our Board of Directors and the Board of Directors has reviewed our disclosure
      relating to critical accounting policies and estimates in this annual report
      on
      Form 10-KSB.




10





·
            **Allowance
                for Doubtful Accounts**





We
      are
      required to make judgments based on historical experience and future
      expectations, as to the realizability of our accounts receivable. We make these
      assessments based on the following factors: (a) historical experience, (b)
      customer concentrations, (c) customer credit worthiness, (d) current economic
      conditions, and (e) changes in customer payment terms.





·
            **Reserve
                on Inventories**





Inventories
      are stated at lower of cost (first-in, first-out), or market. Batteries
      typically come with a date code that indicates shelf life.  If a
      battery has not been sold before this date, it can no longer be sold as “new”
product and is written off but held in reserve for those customers who are
      willing to buy older product at a discount, without warranty.





·
            **Stock-Based
                Compensation**





Effective
      January 1, 2006, we account for stock-based compensation expense in accordance
      with SFAS No. 123(R), Share-Based Payment (SFAS No. 123R). SFAS No. 123R
      supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock
      Issued to Employees (APB No. 25). Under SFAS No. 123R, stock-based compensation
      expense reflects the fair value of stock-based awards measured at the grant
      date, is recognized over the relevant service period, and is adjusted each
      period for anticipated forfeitures. We estimate the fair value of each
      stock-based award on the date of grant using the Black-Scholes option valuation
      model. The Black-Scholes option valuation model incorporates assumptions as
      to
      stock price volatility, the expected life of options, a risk-free interest
      rate
      and dividend yield. Many of these assumptions are highly subjective and require
      the exercise of management judgment. Our management must also apply judgment
      in
      developing an estimate of awards that may be forfeited. If our actual experience
      differs significantly from our estimates and we choose to employ different
      assumptions in the future, the stock-based compensation expense that we record
      in the future periods may differ materially from that recorded in the current
      period.





·
            **Deferred
                Income Taxes**





Deferred
      tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax
      bases.  Deferred tax assets and liabilities are measured using enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled.  The
      effect on deferred tax assets and liabilities of a change in tax rates is
      recognized in income in the period that includes the enactment
      date.  In assessing the realizability of deferred tax assets,
      management considers whether it is more likely than not that some portion or
      all
      of the deferred tax assets will be realized.  Management considers the
      projected future taxable income and tax planning strategies in making this
      assessment.  The Company believes that future earnings in addition to
      the amount of the taxable differences which will reverse in future periods,
      will
      be sufficient to offset recorded deferred tax assets and, accordingly, a
      valuation allowance is not considered necessary at June 30, 2007 and
      2006.




11




**Results
      of Operations**





Net
      sales
      for the fiscal year ended June 30, 2007 decreased 1.1% or $109,268 over the
      fiscal year ended June 30, 2006 primarily as a result of customer responses
      to
      price increases set by battery manufacturers and distributors to offset the
      loss
      of China’s favorable trade status and to recover costs created by extreme
      fluctuations in the price of nickel, a major component of battery
      manufacturing.  In addition, customers continue to move to the
      offshore market, specifically China.  The Company’s gross margin
      increased approximately 150 basis points, up slightly from 30.4% for the fiscal
      year ended June 30, 2006 to 31.9% for the fiscal year ended June 30,
      2007.  During the past two years, no customer accounted for more than
      10% of revenue.





Operating
      (selling, general and administrative) expenses increased by $163,291 or 9.33%
      from $1,750,161 for the fiscal year ended June 30, 2006 to $1,913,452 for the
      fiscal year ended June 30, 2007 primarily as a result of increased auditing
      fees
      and salary expense.  Salary expense increases were directly related to
      an increase in bonus accruals, the recording of an accrual for paid time off,
      and the payroll tax effect of the December 2006 exercise of stock
      options.  Operating expense when expressed as a percentage of net
      sales for the fiscal year ended June 30, 2007 increased to 19.9% from 18.0
      % for
      the fiscal year ended June 30, 2006.





Interest
      and realized and unrealized gains on investments for the year ended June 30,
      2007  increased by $214,398 over the fiscal year ended June 30, 2006
      as a result of increased interest rates and the fluctuations in the value of
      certain investments (U.S. Treasury securities).





Our
      effective income tax rate was 38.8% for the year ended June 30, 2007 as compared
      to 40.5% for the year ended June 30, 2006.





Net
      income for the fiscal year ended June 30, 2007 was $843,582 as compared to
      $725,836 for the fiscal year ended June 30, 2006.  Basic earnings per
      share were $2.93 and $2.79 in 2007 and 2006 respectively.  Diluted
      earnings per share were $2.91 and $2.44 in 2007 and 2006,
      respectively.





A
      one
      time special dividend of $4.75 per share was paid on January 3, 2007 to record
      holders of December 21, 2006. The future payment by us of cash dividends on
      our
      common stock, if any, rests within the discretion of our board of directors
      and
      will depend, among other things, upon our earnings, our capital requirements
      and
      our financial condition as well as other relevant factors.  We can
      provide no assurances that we will pay cash dividends upon our common stock
      in
      the future.




12




**Recent
      Trends**





Competition
      in wholesale distribution of batteries is increasing as offshore and U.S.
      manufacturers sell directly to customers competing with distributors for the
      same market.  Despite increased competition, new battery companies
      have entered the market offering lower prices, and selling directly to the
      end-user via web-based operations.  This, combined with the expansion
      of local battery franchises in cities throughout the USA has increased the
      level
      of competition in the battery market. As a result, we could experience continued
      pressure on our sales and gross margins.





**Liquidity
      and Capital Resources**





Working
      capital amounted to $6,250,859 at June 30, 2007 as compared to $6,173,354 at
      June 30, 2006.  Cash and investments amounted to $4,286,665 at June
      30, 2007 as compared to $4,279,462 at June 30, 2006.  As more fully
      described in the statement of cash flows included in the Company’s financial
      statements elsewhere herein, net cash provided by operating activities amounted
      to $948,786.





During
      the fiscal year ended June 30, 2007, net cash flow provided by operations
      resulted primarily from proceeds associated with the disposition of investments
      and the Company’s net income.  Longer lead times from vendors
      decreased overall inventory levels, as did management’s decision to reduce
      stocking levels on lead acid product due to fluctuations in price and a
      reluctance to carry excess stock on items that may experience price
      decreases.  Net cash was used to purchase
      investments.  Changes in income taxes payable and income taxes
      receivable reflect both the payment of tax obligations related to the previous
      fiscal year, estimated taxes associated with the current period and recognition
      of additional refundable income taxes resulting from the exercise of outstanding
      stock options in December 2006.  Accounts payable and accrued expenses
      increased primarily as a result of the timing of payments to vendors and an
      increase in bonus and paid time-off accruals.  Advance payments for
      product from vendors in China resulted in increases in prepaid
      expenses.  Net cash was provided by investing activities through the
      disposition of property and equipment. Cash used in financing activities to
      pay
      dividends was offset by the issuance of common stock resulting from the
      aforementioned exercise of a portion of the Company’s outstanding stock options
      and the recording of current tax expense associated with the exercise of those
      options.





During
      the fiscal year ended June 30, 2006, cash used in operating activities resulted
      primarily from the purchase of U.S. Government securities and inventory. Cash
      was provided primarily by the Company’s net income. Other sources of cash
      include proceeds from the sale of investments and increases in accounts payable
      and accrued expenses which are mainly related to the timing of vendor payments.
      Sales activity during the period resulted in increased accounts receivable
      balances. Cash was used in investing activities to purchase property and
      equipment. Cash was used in financing activities to purchase treasury
      stock.





During
      the past two years, the Company’s liquidity needs have been satisfied from
      internal sources including cash from operations and amounts available from
      the
      Company’s working capital.  During fiscal 2008, management expects
      this trend to continue.  There are no material commitments for capital
      expenditures or any long-term credit arrangements as of June 30,
      2007.




13




**Lease
      Commitments**





Future
      minimum rental payments associated with operating lease obligations are
      approximated as follows:





**Year
                Ending June 30,**2008
            
            $
            175,0002009
            
            
            105,0002010
            
            
            109,0002011
            
            
            104,000$
            493,000





Total
      lease and rental expense approximated $185,000 and $175,000 in 2007 and 2006
      respectively.  In 2007 and 2006 lease expense associated with related
      parties amounted approximately to $115,000 and $108,000
      respectively.





**Recent
      Accounting Pronouncements**





In
      June
      2006, the FASB issued FASB Interpretation No 48 “Accounting for Uncertainty in
      Income Taxes – and interpretation of FASB Statement 109” (“FIN
      48”).  FIN 48 prescribes a comprehensive model for recognizing,
      measuring, presenting and disclosing in the financial statements tax positions
      taken or expected to be taken on a tax return, including a decision whether
      to
      file or not to file in a particular jurisdiction.  FIN 48 is effective
      for fiscal years beginning after December 15, 2006.  If there are
      changes in net assets as a result of application of FIN 48 those will be
      accounted for as an adjustment to retained earnings.  The Company has
      not yet determined the impact of FIN 48 on its financial position and results
      of
      operations.





In
      September 2006, the FASB issued SFAS No, 157, “Fair Value Measurement” (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value, and expands disclosure about fair value measurements.  SFAS 157
      is effective for financial statements issued for fiscal years beginning after
      November 15, 2007, and interim periods within those fiscal years.  The
      Company has not yet determined the impact of SFAS 157 on its financial position
      and results of operations.





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when quantifying
      Misstatements in Current Year Financial Statements” (“SAB 108”).  SAB
      108 requires companies to evaluate the materiality of identified unadjusted
      errors on each financial statement and related financial statement disclosure
      using both the rollover approach and the iron curtain approach.  The
      rollover approach quantifies misstatements based on the amount of the error
      in
      the current year financial statements whereas the iron curtain approach
      quantifies misstatements based on the effects of correcting the misstatement
      existing in the balance sheet at the end of the current year, irrespective
      of
      the misstatement’s year(s) origin.  Financial statements would require
      adjustment when either approach results in quantifying a misstatement that
      is
      material.  Correcting prior year financial statements for immediate
      errors would not require previously filed reports to be amended.  SAB
      108 is effective for the first fiscal year ending after November 15,
      2006.  The Company does not expect the impact of SAB 108 on its
      financial position and results of operations to be material.




14




**Factors
      that may affect future results and market price of
      stock.**





There
      are
      many factors which may impact our future operating results and the market price
      of our common stock.  These factors include but are not limited to:
      (a) changes in levels of competition from current competitors and potential
      new
      competition; (b) costs of acquiring inventory; (c) credit risk associated with
      our customers; (d) our ability to successfully recover in the event of a
      disaster; (e) the extent to which we cannot control our fixed and variable
      costs; (f) fluctuations in the market price of the raw materials related to
      our
      goods;  (g) general economic conditions in the markets in which we
      operate; (h) changing regulations relating to our corporate governance and
      public disclosure and risk of noncompliance; (i) the lack of an established
      trading market for our common stock and the other uncertainties which are
      described under “Risk Factors” in Item 1.  The foregoing should not be
      construed as an exhaustive list of all factors.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on the Company’s financial condition, changes in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources that are material to the Company’s
      investors.





**Non-reliance
      on previously issued financial statements or a related audit report or completed
      interim review.**





On
      May
      10, 2007, TNR Technical, Inc. determined to restate its previously filed
      unaudited financial statements included in the Company’s Form 10-QSB filed for
      the quarter ended December 31, 2006. Such financial statements were restated
      to
      correct an internal accounting error related to the tax effect of stock options
      exercised in December 2006.  Because of the accounting error, the
      Company’s current income tax expense was understated, and net income was
      overstated by $428,000 for the three and six months ended December 31,
      2006.  The Company included the restated results for the quarterly
      period ended December 31, 2006 in an Amendment on Form 10-QSB/A to the Company’s
      previously filed Form 10-QSB for the same period.  Because of the
      accounting error described above, the unaudited financial statements included
      in
      the Company’s originally filed Form 10-QSB for the quarter ended December 31,
      2006 should no longer be relied upon.  Officers of the Company
      authorized to make the Restatement discussed the matters disclosed in the filing
      with Cross, Fernandez & Riley LLP, the Company’s independent registered
      public accounting firm.





**Possible
      Ceasing of filing Reports under the Securities Exchange Act of
      1934**





The
      Company’s costs of being a reporting company, under the Securities Exchange Act
      of 1934 (the “Exchange Act”) were $124,863 for fiscal 2007, an increase of 53%
      over the comparable period of the prior fiscal year.  Currently, these
      costs are 9% of earnings before income tax.  Management of the Company
      is concerned about the substantial additional professional costs that it will
      incur as a reporting company, estimated in the range of $175,000 to $190,000
      for
      fiscal 2008, and $160,000 to $200,000 in subsequent years under the Exchange
      Act, as well as the additional time burden that will be placed on its limited
      accounting and administrative personnel. In particular, Section 404 of the
      Sarbanes-Oxley Act of 2002, management’s assessment of the effectiveness of
      internal controls over financial reporting will require compliance by the
      Company for its fiscal year ended June 30, 2008 and the auditors assessment
      of the effectiveness of internal controls for its fiscal year ended June 30,
      2009.  The Board of Directors of the Company reserves the right to
      file a Form 15 to cease being a reporting company under the Exchange Act in
      the
      event that it determines that the Company qualifies to file said form and in
      the
      event that the Board determines that the costs of remaining a reporting company
      outweigh the benefits of same. A decision to cease reporting by next July 2008
      may be made at any time and would result in the removal of our common stock
      from
      trading on the OTC Bulletin Board where it currently trades
      sporadically.  If our common stock is removed from the OTC Bulletin
      Board, we would expect it to be available for quotation on the Pink sheets,
      but
      with a possible decrease in liquidity.





Item7.
            Financial
                Statements.





The
      information required by Item 8, and an index thereto, appears at pages F-1
      through F-17 (inclusive) of this Report, which pages follow this
      page.




15




**TNR
      TECHNICAL, INC.**





**Financial
      Statements**





**June
      30, 2007 and 2006**

















TNR
      TECHNICAL, INC.




Index
                  to Financial StatementsIndependent
                  Auditors’ Report for Year Ended June 30, 2007
              F-1Independent
                  Auditors’ Report for Year Ended June 20, 2006
              F-2Financial
                  Statements:Balance
                  Sheets – June 30, 2007 and 2006
              F-3Statements
                  of Income – Years ended June 30, 2007 and 2006F-4Statements
                  of Shareholders’ Equity – Years ended June 30, 2007 and
                  2006F-5Statements
                  of Cash Flows – Years ended June 30, 2007   and
                  2006F-6Notes
                  to Financial Statements
              F-7




**Report
      of Independent Registered Public Accounting Firm**




The
                Board of Directors




TNR
                Technical, Inc.






We
      have audited the
      accompanying balance sheet of TNR Technical, Inc. as of June 30, 2007, and
      the
      related statements of income, shareholders’ equity, and cash flows for the year
      then ended. These financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audit.






We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting.  Our audit included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting.  Accordingly, we express no such opinion. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audit provides a
      reasonable basis for our opinion.






In
      our opinion, the
      financial statements referred to above present fairly, in all material respects,
      the financial position of TNR Technical, Inc. as of June 30, 2007, and the
      results of its operations and its cash flows for the year then ended in
      conformity with accounting principles generally accepted in the United
      States.








September
                18, 2007
            By:
            /s/ Cross,
              Fernandez and Riley, LLPCertified
                Public Accountants




F-1




Report
      of Independent Registered Public Accounting Firm











The
      Shareholders and Board of Directors


TNR
      Technical, Inc.:








We
      have
      audited the accompanying balance sheet of TNR Technical, Inc. as of June 30,
      2006, and the related statements of income, shareholders’ equity and cash flows
      for the year then ended.  These financial statements are the
      responsibility of the Company’s management.  Our responsibility is to
      express an opinion on these financial statements based on our
      audit.





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





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of TNR Technical, Inc. as of June
      30,
      2006 and the results of its operations and its cash flows for the year then
      ended, in conformity with accounting principles generally accepted in the United
      States of America.











August
                18, 2006
            By:
            /s/ **Tschopp,
              Whitcomb & Orr, P.A.**




F-2





**Item
      1.Financial Statements**




TNR
      TECHNICAL, INC.




**Balance
        Sheets**





**June
                30, 2007**
            
            
            **June
                30, 2006****Assets**
              Current
                assets:Cash
                  and cash equivalents
            
            $
            694,019
            
            
            $
            522,151Investments
            
            
            3,592,646
            
            
            
            3,757,311Accounts
                  receivable - trade, less allowance for doubtfulaccounts
                  of $12,275 and $24,842
            
            
            806,050
            
            
            
            763,125Inventories  (note
                  2)
            
            
            1,307,191
            
            
            
            1,387,165Prepaid
                  expenses and other current assets
            
            
            101,345
            
            
            
            32,739Income
                  taxes receivable
            
            
            403,500
            
            
            
            -Deferred
                  income taxes  (note 7)
            
            
            70,000
            
            
            
            184,000Total
                  current assets
            
            
            6,974,751
            
            
            
            6,646,491Property
                  and equipment, at cost, net of accumulateddepreciation
                  and amortization  (note 3)
            
            
            92,776
            
            
            
            127,651Deposits
            
            
            16,360
            
            
            
            16,360Total
                  assets
            
            $
            7,083,887
            
            
            $
            6,790,502**Liabilities
                  and Shareholders' Equity**Current
                  liabilities:Accounts
                  payable
            
            $
            367,090
            
            
            $
            126,939Accrued
                  expenses
            
            
            356,802
            
            
            
            177,198Income
                  taxes payable
            
            
            -
            
            
            
            169,000Total
                  current liabilities
            
            
            723,892
            
            
            
            473,137Deferred
                  tax liability  (note 7)
            
            
            13,000
            
            
            
            20,000Total
                  liabilities
            
            
            736,892
            
            
            
            493,137Shareholders'
                  equity (notes 4 and 5):Common
                  stock - $0.02 par value, authorized 500,000 shares;issued
                  and outstanding 360,331 and 313,581 in 2007 and
                  2006,                    respectively
            
            
            7,207
            
            
            
            6,272Additional
                  paid-in capital
            
            
            3,405,001
            
            
            
            2,736,261Retained
                  earnings
            
            
            3,338,612
            
            
            
            3,963,382Treasury
                  stock, at cost  52,536 and 53,786 shares
            
            
            (403,825
            )
            
            
            (408,550
            )Total
                  shareholders' equity
            
            
            6,346,995
            
            
            
            6,297,365$
            7,083,887
            
            
            $
            6,790,502






See
        accompanying notes to financial statements.




F-3




**TNR
                TECHNICAL, INC.****Statements
                of Income****For
                the years ended June 30,****2007**
            
            
            **2006**Revenue:Net
                  sales
            
            $
            9,615,164
            
            
            $
            9,724,432Costs
                  and expenses:Cost
                  of goods sold
            
            
            6,546,696
            
            
            
            6,764,385Selling,
                  general and administrative
            
            
            1,913,452
            
            
            
            1,750,161Total
                  costs and expenses
            
            
            8,460,148
            
            
            
            8,514,546Operating
                  income
            
            
            1,155,016
            
            
            
            1,209,886Other
                  income (expense):Interest
                  income
            
            
            89,226
            
            
            
            20,662Realized
                  and unrealized gains (losses)
            
            
            134,340
            
            
            
            (11,493
            )Total
                  other income (expense)
            
            
            223,566
            
            
            
            9,169Income
                  before income taxes
            
            
            1,378,582
            
            
            
            1,219,055Provision
                  for income taxes (note 8)
            
            
            535,000
            
            
            
            493,219Net
                  income
            
            $
            843,582
            
            
            $
            725,836Basic
                  earnings per share
            
            $
            2.93
            
            
            $
            2.79Diluted
                  earnings per share
            
            $
            2.91
            
            
            $
            2.44Weighted
                  average number of shares outstanding - basic
            
            
            287,795
            
            
            
            260,109Weighted
                  average number of shares outstanding - diluted
            
            
            290,243
            
            
            
            297,000




See
        accompanying notes to financial statements.






F-4




**TNR
      TECHNICAL, INC.**





**Statements
      of Shareholders’ Equity**






TotalCommon
            
            
            Paid-in
            
            
            Retained
            
            
            Treasury
            
            
            ShareholdersShares
            
            
            Stock
            
            
            Capital
            
            
            Earnings
            
            
            Stock
            
            
            EquityBalances,
              July
                31, 2005
            
            
            313,581
            
            
            $
            6,272
            
            
            $
            2,698,261
            
            
            $
            3,237,546
            
            
            $
            (386,792
            )
            
            $
            5,555,287Issuance
                of stock options
            
            
            -
            
            
            
            -
            
            
            
            38,000
            
            
            
            -
            
            
            
            -
            
            
            
            38,000Purchase
                of Company stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (21,758
            )
            
            
            (21,758
            )Net
                income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            725,836
            
            
            
            -
            
            
            
            725,836Balances,
              June
                30, 2006
            
            
            313,581
            
            
            $
            6,272
            
            
            $
            2,736,261
            
            
            $
            3,963,382
            
            
            $
            (408,550
            )
            
            $
            6,297,365Common
                stock dividends
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,468,352
            )
            
            
            -
            
            
            
            (1,468,352
            )Exercise
                of  Stock Options
            
            
            48,000
            
            
            
            960
            
            
            
            245,440
            
            
            
            -
            
            
            
            -
            
            
            
            246,400Tax
                effect of stock option exercise
            
            
            -
            
            
            
            -
            
            
            
            428,000
            
            
            
            -
            
            
            
            -
            
            
            
            428,000Retirement
                of Company stock
            
            
            (1,250
            )
            
            
            (25
            )
            
            
            (4,700
            )
            
            
            -
            
            
            
            4,725
            
            
            
            -Net
                income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            843,582
            
            
            
            -
            
            
            
            843,582Balances,
              June
                30, 2007
            
            
            360,331
            
            
            $
            7,207
            
            
            $
            3,405,001
            
            
            $
            3,338,612
            
            
            $
            (403,825
            )
            
            $
            6,346,995






See
        accompanying notes to financial statements.


F-5






**TNR
        TECHNICAL, INC.**
  **Statements
          of Cash Flows**





**For
                the years ended June 30,****2007**
            
            
            **2006**Cash
                flows from operating activities:Net
                income
            
            $
            843,582
            
            
            $
            725,836Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Deferred
                income taxes
            
            
            107,000
            
            
            
            (64,000
            )Depreciation
                and amortization
            
            
            15,303
            
            
            
            48,213Provision
                for doubtful accounts
            
            
            (12,703
            )
            
            
            8,400Realized
                and unrealized (gain) loss on investments
            
            
            (134,340
            )
            
            
            11,493Loss
                on disposition of fixed assets
            
            
            2,538
            
            
            
            -0-Issuance
                of stock options
            
            
            -0-
            
            
            
            38,000Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (30,222
            )
            
            
            (117,518
            )Purchase
                of investments and accrued interest
            
            
            (3,247,661
            )
            
            
            (403,746
            )Proceeds
                from disposition of investments
            
            
            3,546,666
            
            
            
            -0-Inventories
            
            
            79,974
            
            
            
            (198,320
            )Prepaid
                expenses and other assets
            
            
            (68,606
            )
            
            
            (1,944
            )Accounts
                payable and accrued expenses
            
            
            419,755
            
            
            
            53,199Deposits
            
            
            -0-
            
            
            
            (476
            )Income
                taxes receivable/payable
            
            
            (572,500
            )
            
            
            62,619Net
                cash provided by operating activities
            
            
            948,786
            
            
            
            161,756Cash
                from investing activities:Purchase
                of property and equipment
            
            
            (7,966
            )
            
            
            (49,479
            )Proceeds
                from disposition of property and equipment
            
            
            25,000
            
            
            
            -0-Net
                cash provided by (used in) investing activities
            
            
            17,034
            
            
            
            (49,479
            )Cash
                flows from financing activities:Dividend
                Payments
            
            
            (1,468,352
            )
            
            
            -0-Purchase
                of treasury stock
            
            
            -0-
            
            
            
            (21,758
            )Tax
                effect of stock option exercise
            
            
            428,000
            
            
            
            -0-Issuance
                of common stock
            
            
            246,400
            
            
            
            -0-Net
                cash used in financing activities
            
            
            (793,952
            )
            
            
            (21,758
            )Increase
                in cash and cash equivalents
            
            
            171,868
            
            
            
            90,519Cash
                and cash equivalents – beginning of period
            
            
            522,151
            
            
            
            431,632Cash
                and cash equivalents – end of period
            
            $
            694,019
            
            
            $
            522,151Supplemental
                disclosure of cash flow information:Cash
                paid during the year for income taxes
            
            $
            572,500
            
            
            $
            405,777




F-6




**TNR
      TECHNICAL, INC**


**Notes
      to Financial Statements**




June30,
      2007 and 2006





**(1)**
            **Summary
                of Significant Accounting
                Policies**





**(a)**
            **Nature
                of Operations**





TNR
      Technical, Inc. (TNR or the Company) designs, assembles and markets batteries
      and multi-cell battery packs to a wide variety of industrial
      markets.  The Company is a distributor for a number of major U.S.
      battery manufacturers and markets its products nationally.





**(b)**
            **Accounts
                Receivable**





Accounts
      receivable are customer obligations due under normal trade terms and are stated
      at the amount management expects to collect from outstanding
      balances.  Management provides for probable uncollectible amounts
      using the reserve method based on its assessment of the current status of the
      individual receivables and after using reasonable collection
      efforts.  After all attempts to collect a receivable have failed, the
      receivable is written off against the allowance.





**(c)**
            **Investments**





Investments
      held by the Company are classified as trading securities and consist of
      certificates of deposit and certain government and corporate fixed income
      securities.  Trading securities are carried at fair value and
      unrealized gains and losses associated with trading securities are included
      in
      earnings on a current basis.  Unrealized losses associated with
      trading securities amounted to $2,943 in 2007 and $129,042 in 2006. The Company
      determines cost on the specific identification basis.





**(d)**
            **Inventories**





Inventories
                are stated at the lower of cost (first-in, first-out) or
                market.





**(e)**
            **Property
                and Equipment**





Property
      and equipment are recorded at cost.  The Company provides depreciation
      for machinery and equipment using the straight-line method over the estimated
      useful lives of the respective assets, which range from three to seven
      years.  Amortization of leasehold improvements is computed using the
      straight-line method over the lesser of the lease term or estimated useful
      lives
      of the improvements which range from four to eleven years.





(Continued)


F-7


**TNR
          TECHNICAL, INC**
 **Notes
          to Financial Statements**
  June30,
          2007 and 2006


**(1)**
            **Summary
                of Significant Accounting Policies -
                Continued**





**(f)**
            **Major
                Suppliers**





During
      the years ended June 30, 2007 and 2006, 48% and 46%, respectively, of products
      were purchased from one supplier; however, the Company has the ability to
      purchase readily available inventory from various other suppliers.





**(g)**
            **Revenue
                Recognition**





The
      Company, consistent with the practice of most entities operating in the battery
      distribution business, recognizes revenue upon shipment of battery products
      from
      its warehouse facilities.  The Company’s customers take title to the
      products at the time of shipment and bear the cost of freight.  There
      is no continuing performance obligation by the Company subsequent to shipment
      of
      product.  The costs incurred by the Company for shipping and handling
      are offset against freight charged to customers.





**(h)**
            **Advertising
                Costs**





Advertising
      expenditures related to product distribution and marketing efforts consist
      primarily of internet advertising, product presentation material, catalog
      preparation, printing and postage expenses which are expensed as
      incurred.  Advertising costs included in general and administrative
      expenses were $28,465 and $41,765 for the years ended June 30, 2007 and 2006,
      respectively.





**(i)**
            **Use
                of Estimates**





Management
                of the Company has made certain estimates and assumptions related
                to the
                reporting of assets and liabilities and disclosure of contingent
                assets
                and liabilities to prepare these financial statements in conformity
                with
                accounting principles generally accepted in the United States of
                America.  Actual results could differ from those
                estimates.





**(j)**
            **Financial
                Instruments Fair Value and Credit
                Risks**





The
      carrying amounts reported in the balance sheet approximates fair value for
      cash
      and cash equivalents, investments, accounts receivable, accounts payable and
      accrued expenses since they are short term in nature or they are receivable
      or
      payable upon demand.  Financial instruments, which potentially subject
      the Company to concentrations of credit risk, consist principally of trade
      accounts receivable which amounted to approximately $818,000 at June 30,
      2007.  The Company performs periodic credit evaluations of its trade
      customers and generally


(Continued)


F-8


**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006




**(1)**
            **Summary of Significant Accounting
                Policies -
                Continued**


does
      not
      require collateral.  The Company maintains its cash balances at
      certain financial institutions which at times may exceed federally insured
      limits.  The Company believes it is not exposed to any significant
      credit risk in these accounts.





**(k)**
            **Stock-Based
                Compensation**




On
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards (“SFAS”) No. 123(R), Share-Based Payment, which is a revision of
      SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R)
      requires the measurement and recognition of compensation expenses for all
      share-based payment awards made to employees and directors including employee
      stock options and restricted stock based on estimated fair values. SFAS
      No. 123(R) supersedes the Company’s previous accounting under Accounting
      Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to
      Employees. The Company adopted SFAS No. 123(R) using the modified
      prospective method. Under the modified prospective method, compensation costs
      are recognized beginning with the effective date based on the requirements
      of
      SFAS No. 123(R) for all share-based payments granted after the effective
      date and based on the requirements of SFAS No. 123 for all awards granted
      to employees prior to the effective date of SFAS No. 123(R) that remain
      unvested on the effective date. In accordance with the modified prospective
      transition method, the Company’s financial statements for the prior periods have
      not been restated to reflect, and do not include, the impact of SFAS
      No. 123(R).




The
      Company estimates the fair value of each option award issued under their stock
      option plans on the date of grant using a Black-Scholes option-pricing model.
      The Company estimates the volatility of its common stock at the date of grant
      based on the historical volatility of its common stock. These historical periods
      may exclude portions of time when unusual transactions occurred. The Company
      determines the expected life based on historical experience with similar awards,
      giving consideration to the contractual terms, vesting schedules and
      post-vesting forfeitures. The Company bases the risk-free interest rate on
      the
      implied yield currently available on U.S. Treasury issues with an equivalent
      remaining term approximately equal to the expected life of the
      award.





Under
      the
      SFAS No. 123(R), stock-based compensation expenses recognized in the
      accompanying audited statement of operations for the year ended June 30,
      2006 was $38,000 which caused net income to decrease by that amount and basic
      and diluted income per share for 2006 to decrease by $0.15 and $0.13,
      respectively. There was no stock-based compensation expense recognized during
      2007 since there were no new option grants and all outstanding options had
      been
      fully expensed prior to July 1, 2006.





Prior
      to
      the adoption of SFAS No. 123(R), the Company accounted for stock-based
      awards to employees and directors using the intrinsic value method in accordance
      with APB Opinion No. 25 as allowed under SFAS No. 123. Under the
      intrinsic value method, no stock-based compensation expenses have been
      recognized in the Company’s statement of operations for stock options because
      the exercise price of the Company’s stock options granted to employees and
      directors equaled the fair market value of the underlying stock at the date
      of
      grant. If the Company had elected to recognize compensation expense for stock
      options based on the fair value at grant date, consistent with the method
      prescribed by SFAS No. 123(R), net income and income per share for 2006
      would have been decreased to the pro forma amounts shown in Note 5
      below.




F-9


**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006




**(l)**
            **Income
                Taxes**





Deferred
      tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax
      bases.  Deferred tax assets and liabilities are measured using enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled.  The
      effect on deferred tax assets and liabilities of a change in tax rates is
      recognized in income in the period that includes the enactment
      date.  Valuation allowances are established when necessary to reduce
      deferred tax assets to the amount expected to be realized.





**(m)**
            **Cash
                Equivalents**





For
      purposes of cash flows, the Company considers all highly liquid investments
      with
      an initial maturity of three months or less to be cash equivalents.





**(n)**
            **Earnings
                Per Common Share**





Basic
      earnings per common share have been computed based upon the weighted average
      number of common shares outstanding during the years
      presented.  Common stock equivalents resulting from the issuance of
      the stock options are included in the calculation of diluted earnings per share
      information.





**(o)**
            **Recent
                Accounting
                Pronouncements**





In
      June
      2006, the FASB issued FASB Interpretation No 48 “Accounting for Uncertainty in
      Income Taxes – and interpretation of FASB Statement 109” (“FIN
      48”).  FIN 48 prescribes a comprehensive model for recognizing,
      measuring, presenting and disclosing in the financial statements tax positions
      taken or expected to be taken on a tax return, including a decision whether
      to
      file or not to file in a particular jurisdiction.  FIN 48 is effective
      for fiscal years beginning after December 15, 2006.  If there are
      changes in net assets as a result of application of FIN 48 those will be
      accounted for as an adjustment to retained earnings.  The Company has
      not yet determined the impact of FIN 48 on its financial position and results
      of
      operations.





In
      September 2006, the FASB issued SFAS No, 157, “Fair Value Measurement” (“SFAS
      157”).




F-10


**TNR
          TECHNICAL, INC**
 **Notes
          to Financial Statements**
  June30,
          2007 and 2006






**(1)**
            **Summary
                of Significant Accounting
                Policies-Continued**





SFAS
      157
      defines fair value, establishes a framework for measuring fair value, and
      expands disclosure about fair value measurements.  SFAS 157 is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007, and interim periods within those fiscal years.  The
      Company has not yet determined the impact of SFAS 157 on its financial position
      and results of operations.





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when quantifying
      Misstatements in Current Year Financial Statements” (“SAB 108”).  SAB
      108 requires companies to evaluate the materiality of identified unadjusted
      errors on each financial statement and related financial statement disclosure
      using both the rollover approach and the iron curtain approach.  The
      rollover approach quantifies misstatements based on the amount of the error
      in
      the current year financial statements whereas the iron curtain approach
      quantifies misstatements based on the effects of correcting the misstatement
      existing in the balance sheet at the end of the current year, irrespective
      of
      the misstatement’s year(s) origin.  Financial statements would require
      adjustment when either approach results in quantifying a misstatement that
      is
      material.  Correcting prior year financial statements for immediate
      errors would not require previously filed reports to be amended.  SAB
      108 is effective for the first fiscal year ending after November 15,
      2006.  The Company does not expect the impact of SAB 108 on its
      financial position and results of operations to be material.





**(2)**
            **Inventories**





Inventories
      consist of the following as of June 30,:





**2007**
            
            
            **2006**Finished
                goods/work-in-progress
            
            
            38,763
            
            
            
            41,615Purchased
                product and materials
            
            
            1,275,860
            
            
            
            1,354,680Inventory
                reserve
            
            $
            (7,432
            )
            
            $
            (9,130
            )$
            1,307,191
            
            
            
            1,387,165





**(3)**
            **Property
                and Equipment**





Property
      and equipment consists of the following:




F-11




**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006




**2007**
            
            
            **2006**Machinery
                and equipment
            
            $
            93,435
            
            
            $
            93,666Furniture
                and fixtures
            
            
            121,441
            
            
            
            121,441Vehicles
            
            
            51,202
            
            
            
            107,810Leasehold
                improvements
            
            
            32,767
            
            
            
            28,355298,845
            
            
            
            351,272Less
                accumulated depreciation and amortization
            
            
            206,069
            
            
            
            223,621$
            92,776
            
            
            $
            127,651





**(4)**
            **Stockholders’
                Equity**





Common
      Stock – The Company’s common stock consists of the following:





Authorized
      500,000 shares of common stock, $.02 par value.  The stockholders of
      common stock are entitled to one vote for each share held.





Treasury
      Stock – Shares of common stock repurchased become treasury shares.  No
      shares of common stock were repurchased in fiscal 2007.  The Company
      repurchased 978 shares of common stock for $21,758 during fiscal
      2006.  During fiscal 2007, 1,250 shares of treasury stock at a cost of
      $4,725 were retired.





In
      January 2007, a special one-time dividend of $4.75 per share was issued to
      stockholders of record as of December 21, 2006 and reduced retained earnings
      by
      $1,468,352.





**(5)**
            **Stock
                Option Plans**





The
      1998
      Incentive and Non-Qualified Stock Option Plan, (the “1998 Plan”), was approved
      by the Board of Directors effective December 15, 1998 subject to stockholder
      approval within 12 months.  The 1998 Plan covers 60,000 shares of
      Common Stock, subject to adjustment of shares under the anti-dilution provisions
      of the 1998 Plan.  The 1998 Plan authorizes the issuance of the
      options covered thereby as either “Incentive Stock Options” within the meaning
      of the Internal Revenue Code of 1986, as amended, or as “Non-Statutory Stock
      Options.”  Persons eligible to receive options under the 1998 Plan
      include employees, directors, officers, consultants or advisors, provided that
      bona fide services shall be rendered by consultants or advisors and such
      services must not be in connection with the offer or sale of securities in
      a
      capital raising transaction; however, only employees (who may also be officers
      and/or directors) are eligible to receive an Incentive Stock
      Option.  The 1998 Plan also provides that no options may be granted
      after December 15, 2008.




F-12




TNR
      TECHNICAL, INC.


**Notes
      to Financial Statements**




June
      30,
      2007 and 2006




**(5)**
            **Stock Option Plans
                -
                Continued**




Options
      outstanding consist of the following:




****
            ****
            **Weighted
                Average**
            ********
            ****
            **Number**
            ****
            ****
            **Exercise
                Price**Balance
                outstanding, June 30, 2005
            
            
            48,000
            
            
            $
            5.13Option
                grants
            
            
            10,000
            
            
            
            21.80Balance
                outstanding, June 30, 2006
            
            
            58,000
            
            
            
            8.00Option
                exercised
            
            
            (48,000
            )
            
            
            5.13Balance
                outstanding, June 30, 2007
            
            
            10,000
            
            
            
            21.80





Information
      related to options at June 30, 2007, is as follows:





**Outstanding
                and Exercisable**
            
            
            **Weighted
                Average****Exercise
                Price**
            
            
            **Equivalent
                Shares**
            
            
            **Exercise
                Price**
            
            
            **Remaining
                Contract Life**$
            21.00
            
            
            
            5,000
            
            
            $
            21.00
            
            
            
            8.022.60
            
            
            
            5,000
            
            
            
            22.60
            
            
            
            8.510,000
            
            
            
            21.80
            
            
            
            8.3





Through
      December 31, 2005, the Company continued to account for stock-based compensation
      using the intrinsic value method prescribed by SFAS 123 and Accounting
      Principles Board Opinion No. 25 under which no compensation cost for stock
      options is recognized for stock option awards granted at or above fair market
      value.  Subsequent to this date, in January 2006, options issued for
      the purchase of 5,000 shares of common stock were valued at $38,000 using the
      Black-Scholes option-pricing model in accordance with the provisions of SFAS
      123R and recorded as compensation expense in the accompanying 2006 financial
      statements.





****SFAS
      No. 123 requires that companies using the intrinsic value method make pro forma
      disclosure of net income and net income per share as if the fair value method
      of
      accounting had been applied.  For purposes of pro forma disclosures,
      the Company used the Black-Scholes option-pricing model to estimate the fair
      value of options issued in August 2005.  The estimated fair value of
      the options is amortized to expense over the options’ expected vesting
      period.  Had compensation cost for the Company’s stock option plan
      been determined based on the estimated fair value at the grant dates for awards
      under the plan consistent with the fair value method of SFAS No. 123 utilizing
      the Black-Scholes option-pricing model, the Company’s net income and basic and
      diluted earnings per share




F-13




**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006






**(5)**
            **Stock
                Option Plans -
                Continued**





for
      the
      year ended June 30, 2006 would have approximated the pro forma amounts indicated
      below:





**2006**Net
                income:As
                reported
            
            $
            725,836Deduct
                total stock-based compensation expense determined
              under
                fair value based method
            
            
            (35,136
            )Pro
                forma
            
            $
            690,700





Basic
                earnings per share:As
                reported
            
            $
            2.79Pro
                forma
            
            
            2.66Diluted
                earnings per share:As
                reported
            
            $
            2.44Pro
                forma
            
            
            2.33





The
      computation of the effect on net earnings and earnings per share with respect
      to
      outstanding options in accordance with SFAS 123R was calculated using the
      Black-Scholes option-pricing model which included the following significant
      assumptions:





Risk-free
                interest rate
            
            
            4.25
            %Expected
                volatility
            
            
            10.00
            %Expected
                dividend yield
            
            
            0.00
            %Expected
                life
            
            8.5
                years





The
      weighted average fair value at the date of grant of the options granted during
      the year ended June 30, 2006 approximated $7.51 per option.





During
      fiscal year 2007, 48,000 options were exercised at an average weighted price
      of
      $5.13.    At the time of exercise, the fair market value of
      the stock was $28.10.  The intrinsic value of the options exercised
      was $1,102,400.




The
      Black-Scholes option valuation model was developed for use in estimating the
      fair value of traded options, which have no vesting restrictions and are fully
      transferable.  In addition, option valuation models require the input
      of highly subjective assumptions including the expected stock price volatility.
      Because the Company’s employee stock options have characteristics significantly
      different from those of traded options, and because changes in the subjective
      input assumptions can materially affect the fair value estimate, in management’s
      opinion, the existing models do not necessarily provide a reliable single
      measure of the fair value of its employee stock options. The exercise of stock
      options during Fiscal 2007 increased paid in capital in the amount of cash
      received for the options by $246,400.  In addition, the tax benefit
      from stock exercise increased paid in capital by $428,000.




F-14




**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006






**(6)**
            **Earnings
                Per Share**





The
      following is a reconciliation of basic net income per share to diluted net
      income per share for the year ended June 30:





2007
            
            
            2006Net
                Income
            
            $
            843,582
            
            
            $
            725,836Weighted
                average shares outstanding – basic
            
            
            287,795
            
            
            
            260,109Basic
                net income per common share
            
            $
            2.93
            
            
            $
            2.79Potential
                shares – stock options
            
            
            10,000
            
            
            
            48,000Less:  treasury
                stock repurchases
            
            
            (7,552
            )
            
            
            (21,109
            )Weighted
                average shares outstanding – diluted
            
            
            290,243
            
            
            
            297,000Diluted
                net income per common share
            
            $
            2.91
            
            
            $
            2.44




All
      options outstanding at June 30, 2007 and 2006 were considered dilutive for
      purposes of determining earnings per share.





**(7)**
            **Income
                Taxes**





The
      income tax provision for the years ended June 30, 2007 and June 30, 2006
      consists of the following:


**2007**
              
              
              **2006**Current:Federal
              
              $
              387,000
              
              
              $
              453,277State
              
              
              41,000
              
              
              
              103,942428,000
              
              
              
              557,219Deferred:Federal
              
              
              91,000
              
              
              
              (53,000
              )State
              
              
              16,000
              
              
              
              (11,000
              )107,000
              
              
              
              (64,000
              )Total
              
              $
              535,000
              
              
              $
              493,219




F-15




**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006






**(7)**
            **Income
                Taxes (Continued)**





Income
      tax expense attributable to income before income tax differed from the amount
      computed by applying the U.S. Federal income tax rate of 34% to income from
      operations before income taxes as a result of the following:




**2007**
            
            
            **2006**Computed
                “expected” tax expense
            
            $
            469,000
            
            
            $
            418,000Increase
                (reduction) in income tax expenseresulting
                from:State
                income taxes, net of federal
              income
                tax benefit
            
            
            9,000
            
            
            
            45,000Change
                in deferred tax assets
            
            
            36,000
            
            
            
            27,219Other
            
            
            21,000
            
            
            
            3,000$
            535,000
            
            
            $
            493,219





The
      tax
      effects of temporary differences that give rise to significant portions of
      the
      deferred tax assets and liabilities at June 30, 2007 and 2006 are presented
      below:





**2007**
            
            
            **2006**Deferred
                tax assets:Inventories,
                principally due to additional costsinventoried
                for tax purposes
            
            $
            52,000
            
            
            $
            59,000Accounts
                receivable, due to allowance foruncollectible
                accounts
            
            
            5,000
            
            
            
            10,000Investments,
                due to exclusion of unrealized losses
              for
                tax purposes
            
            
            1,000
            
            
            
            100,000Value
                of stock options issued
            
            
            14,000
            
            
            
            15,000Accrued
                paid time off
            
            
            12,000
            
            
            
            -Deferred
                tax assets
            
            
            84,000
            
            
            
            184,000Deferred
                tax liabilities:Property
                and equipment, due to additional
              depreciation
                for tax purposes
            
            
            (27,000
            )
            
            
            (20,000
            )Net
                deferred tax
                assets
            
            $
            57,000
            
            
            $
            164,000





(Continued)





F-16




**TNR
        TECHNICAL, INC**
 **Notes
        to Financial Statements**
  June30,
        2007 and 2006





**(8)**
            **Income
                Taxes (Continued)**





Deferred
      taxes are presented in the accompanying balance sheets as follows:




**2007**
            
            
            **2006**Current
                deferred tax assets
            
            $
            70,000
            
            
            
            184,000Noncurrent
                deferred tax liability
            
            
            (13,000
            )
            
            
            (20,000
            )$
            57,000
            
            
            
            164,000





In
      assessing the realizability of deferred tax assets, management considers whether
      it is more likely than not that some portion or all of the deferred tax assets
      will be realized.  Management considers the projected future taxable
      income and tax planning strategies in making this assessment.  The
      Company believes that future earnings in addition to the amount of the taxable
      differences which will reverse in future periods, will be sufficient to offset
      recorded deferred tax assets and, accordingly, a valuation allowance is not
      considered necessary at June 30, 2007 and 2006. Paid in capital increased
      $428,000 as a result of the recording of current tax expense associated with
      the
      exercise of stock options in December 2006.





**(8)**
            **Lease
                Commitments**





The
      Company leases its Florida office, warehouse and distribution facilities from
      a
      partnership controlled by an executive officer, shareholder and director of
      the
      Company.  The lease agreement provides for payment of real estate
      taxes and insurance and extends through May 2011.  The Company also
      leases warehouse and distribution facilities in California from an unrelated
      party under a two-year operating lease agreement expiring in
      2008.  Future minimum rental payments associated with these operating
      lease obligations are approximated as follows:





**Year
                Ending June 30,**2008
            
            $
            175,0002009
            
            
            105,0002010
            
            
            109,0002011
            
            
            104,000$
            493,000





Total
      lease and rental expense approximated $185,000 and $175,000 in 2007 and 2006
      respectively.  In 2007 and 2006 lease expense associated with related
      parties amounted approximately to $115,000 and $108,000
      respectively.






**(9)**
            **Retirement
                Plan**





The
      Company participates in a qualified retirement plan (Plan) with a salary
      deferral feature designed to qualify under Section 401 of the Internal Revenue
      Code.  Employees of the Company are eligible to participate in the
      Plan if they meet certain minimum age and period of credited service
      requirements.  The Plan allows participants to defer up to 25% of
      their compensation on a pre-tax basis subject to certain maximum
      amounts.  The Plan allows the Company to make matching contributions
      not to exceed 6% of the eligible participant compensation.  In 2007
      and 2006, the Company made matching contributions of $52,759 and $49,052
      respectively.







F-17


Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure.





On
      February 14, 2007, the Company was notified by its independent registered public
      accounting firm, Tschopp, Whitcomb & Orr PA ("TWO"), the principal
      accountant of the Company's financial statements for the last fiscal year ended
      June 30, 2006 (the "Prior Fiscal Year"), that it was no longer the Company's
      independent auditor and has resigned.





TWO's
      report on the Company's financial statements for the Prior Fiscal Year, did
      not
      contain an adverse opinion or disclaimer of opinion, nor was such report
      qualified or modified as to uncertainty, audit scope or accounting
      principles.





There
      were no disagreements ("Disagreements") between Company and TWO during either
      (i) the Prior Fiscal Year, or (ii) the period July 1, 2006 through February
      14,
      2007 (the "Interim Period") on any matter of accounting principles or practices,
      financial statement disclosure, or auditing scope or procedure, which
      Disagreements, if not resolved to the satisfaction of TWO, would have caused
      TWO
      to make reference to the subject matter of the Disagreement in connection with
      its report for the Prior Fiscal Year.





There
      were no reportable events under Item 304(a)(1) of Regulation S-B, that occurred
      during either (i) the Prior Fiscal Years or (ii) the Interim
      Period.





On
      February 14, 2007, the Audit Committee of the Board of Directors appointed
      Cross, Fernandez & Riley, LLP ("CFR") as the new independent registered
      public accounting firm to audit the Company's financial statements. There were
      no discussions between the Company and CFR regarding the application of
      accounting principles to a specified transaction, either completed or proposed,
      or the type of audit opinion that might be rendered on Company's financial
      statements. Furthermore, no written or oral advice was provided by CFR that
      was
      an important factor considered by the Company in reaching a decision as to
      any
      accounting, auditing or financial reporting issue. The Company has not consulted
      with CFR regarding any matter that was either the subject of a Disagreement
      or a
      Reportable Event.





Item
                8(a)
            Controls
                and Procedures


The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the Company's Exchange Act reports
      is recorded, processed, summarized and reported within the time periods
      specified in the SEC's rules and forms, and that such information is accumulated
      and communicated to the Company's management, including its Chief Executive
      Officer and Chief Financial Officer, as appropriate, to allow timely decisions
      regarding required disclosure based closely on the definition of “disclosure
      controls and procedures” in Rule 13a-15(e). In designing and evaluating the
      disclosure controls and procedures, management recognized that any controls
      and
      procedures, no matter how well designed and operated, can provide only
      reasonable assurance of achieving the desired control objectives, and management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures. The Company carried out an
      evaluation, under the supervision and with the participation of the Company's
      management, including the Company's Chief Executive Officer and Chief Financial
      Officer, of the effectiveness of the design and operation of the Company's
      disclosure controls and procedures. Based on the foregoing, the Company’s Chief
      Executive Officer and Chief Financial Officer concluded that the Company's
      disclosure controls and procedures were effective at the reasonable assurance
      level at the end of our most recent fiscal year ended June 30, 2007, except
      for
      the material weakness listed below. There have been no changes in the Company’s
      disclosure controls and procedures or in other factors that could affect the
      disclosure controls subsequent to the date the Company completed its
      evaluation.




16





Management
      has not yet completed, and is not yet required to have completed, its assessment
      of the effectiveness of internal control over financial reporting as required
      by
      Section 404 of the Sarbanes-Oxley Act.





A
      material weakness in internal control over financial reporting is defined by
      Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 2 as a
      significant deficiency, or combination of significant deficiencies, that results
      in more than a remote likelihood that a material misstatement of the annual
      or
      interim financial statements will not be prevented or detected.





A
      significant deficiency is a control deficiency, or combination of control
      deficiencies, that adversely affects the Company’s ability to initiate,
      authorize, record, process or report external financial data reliably in
      accordance with generally accepted accounting principles such that there is
      more
      than a remote likelihood that a misstatement of the Company’s annual or interim
      financial statements that is more than inconsequential will not be prevented
      or
      detected.





The
      Company identified the following material weakness relating to internal controls
      over reporting on income taxes:





On
      May
      10, 2007, the Company’s Form 10-QSB for the quarter ended December 31, 2006 was
      amended to restate the financial statements to correct an internal accounting
      error related to the tax effect of stock options exercised in December 2006.
      Because of the accounting error, the Company’s current income tax expense was
      understated and net income was overstated for the three and six months ended
      December 31, 2006 by $428,000. In addition, the year-end tax provision lacked
      adequate review by management and resulted in a material adjustment for the
      year
      ended June 30, 2007.





Our
      Chief
      Executive Officer and Chief Financial Officer has concluded that our disclosure
      controls and procedures were not effective as of December 31, 2006 to properly
      record and report the tax effect associated with the exercise of stock
      options.  Our disclosure controls and procedures now include retaining
      competent professional review to assist us in determining the tax effect of
      employee stock options.




Item
                8(b)
            Other
                Information


None


17


PART
      III





Item9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance
                with
              Section
                16(a) of the Exchange Act.







The
      names, ages and principal occupations of the Company’s present directors, and
      the date on which their term of office commenced and expires, are listed
      below.


Name
                Age
                
                Term
                  of
                  Office
                
                First
                  Became
                  Director
                
                Principal
                  OccupationWayne
                    Thaw
                50
                
                (1)
                
                1983
                
                Chairman
                    of the
                  Board,
                    Chief
                  Executive
                    Officer
                  PresidentJerrold
                    Lazarus
                75
                
                (1)
                
                1987
                
                RetiredNorman
                    L. Thaw
                74
                
                (1)
                
                1979
                
                President
                    of
                  Stride
                    Rite
                  Stables,
                    Inc.,
                  Private
                    InvestorMitchell
                  Thaw
                51
                
                (1)
                
                1998
                
                Private
                  InvestorPatrick
                  Hoscoe
                44
                
                (1)
                
                1998
                
                Vice
                    President
                  And
                    Operations
                  Manager
                    of the
                  Company’s
                    West
                  Coast
                    DivisionLarry
                  J. Kaczmarek
                45
                
                (1)
                
                2004
                
                Colonial
                    Management Group
                  Controller/Chief
                    Financial OfficerAnthony
                    Guadagnino
                60
                
                (1)
                
                2004
                
                President
                    of
                  Presidential
                    South,
                  Inc.





(1)
            Directors
                are elected at the annual meeting of stockholders and hold office
                until
                the


following
                annual meeting.




18




Officers
      of the Company





Wayne
      Thaw is Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
      President and Treasurer of the Company. Patrick Hoscoe serves as Vice President
      of the Company.  The terms of all officers expire at the annual
      meeting of directors following the annual stockholders
      meeting.  Officers serve at the pleasure of the Board and may be
      removed, either with or without cause, by the Board of Directors, and a
      successor elected by a majority vote of the Board of Directors, at any
      time.





Biographical
      Information of Executive Officers and Directors





Wayne
      Thaw has served as Chairman of the Board and Chief Executive officer since
      December 2000 and President and Chief Operating Officer of the Company since
      November 1987.  Mr. Thaw has been a full-time employee since
      1980.





Jerrold
      Lazarus has served as a director of the Company since October
      1987.  Mr. Lazarus was a full time employee and Chairman of the Board
      and Chief Executive Officer of the Company between April 1988 and January
      2001.  Since Mr. Lazarus retired from serving as an executive officer
      of the Company in January 2001, he has not been affiliated with another
      company.





Norman
      L.
      Thaw is one of the founders of the Company and served as its Chairman and Chief
      Executive Officer between March 1987 and April 1988.  Since 1998, Mr.
      Thaw's principal occupation is the President of Stride Rite Stables, Inc.,
      a
      thoroughbred racing and breeding farm in South Florida.





Mitchell
      Thaw has been a director of the Company since December 1998. Mr. Thaw is a
      private investor and he is not currently affiliated with any firms. For over
      25
      years, Mr. Thaw has been engaged in numerous Wall Street trading and management
      positions. Mr. Thaw has expertise and experience in numerous Wall Street
      products, options, structured products, stocks, warrants, program trading,
      convertible bonds, corporate and government bonds.  Between 2002 and
      2006, he was the co-founder and co-manager of the Harbert Convertible Arbitrage
      Fund. The fund’s primary strategy was capital structure arbitrage and grew to
      over $900,000,000 in assets. Prior to joining Harbert, Mr. Thaw specialized
      in
      listed equity options and structured products. He started an institutional
      option department at KBC Securities, an international firm, where he served
      as
      vice president from November 2000 until September 2001. He started an
      institutional option department at Schroeder & Co., Inc. and served as a
      director of Institutional Options at Schroeder from April 1999 through May
      2000.  From 1988 through April 1998, Mr. Thaw was an executive for UBS
      Securities. Mr. Thaw received a BA from the University of Miami.





Patrick
      Hoscoe has been Vice President and a director of the Company since
      1998.  Mr. Hoscoe also serves as Operations Manager of the Company’s
      West Coast operations. Mr. Hoscoe has over 25 years experience in the battery
      industry and worked for House of Batteries for the five years prior to joining
      the Company in 1998.





Larry
      J.
      Kaczmarek, since May 2006, has been Controller/CFO for Colonial Management
      Group, L.P., one of the largest operators of opiate addiction substance abuse
      treatment centers in the nation. He is responsible for all accounting and
      finance functions and supervises a staff of four. Between March 2005 and May
      2005, he served as a senior financial consultant for CuraScript, Inc., a large
      specialty pharmacy distributor. He led important projects in Sarbanes Oxley
      compliance and accounts receivable.  Between September 2004 and March 2005
      he served as Director of Finance of Devereux Florida, one of the largest not
      for
      profit organizations in central Florida, serving as a mental health service
      provider for young children throughout Florida. Between February and August,
      2004, Mr. Kaczmarek was self employed and served as a senior financial
      consultant to his clients. Between April 2000 and January 2003, he served as
      Chief Financial Officer of Protegrity Holdings, Inc., a mid-sized company
      specializing in administration of workers’ compensation insurance in Longwood,
      Florida. As Chief Financial Officer, he supervised a staff of twelve persons
      and
      was responsible for all financial and accounting functions, served as lead
      contact with the bank as to its credit facility, was responsible for all risk
      management needs, served as lead negotiator relating to certain service
      contracts and developed and implemented specialized financial reports that
      provided the chief executive officer and product line leaders with current
      results and run rate trends. From 1997 to April 2000, he served as director
      of
      workers’ compensation for Humana Inc. of Louisville, Kentucky. Between 1995 and
      1997, he served as director of finance at Humana Inc. Between 1990 – 1995, Mr.
      Kaczmarek served as director of financial analysis and planning at Emphesys
      Financial Group, Inc., Green Bay, Wisconsin. He has a Bachelor of Science in
      Public Finance from Indiana University, which he received in 1984.




19





Anthony
      Guadagnino has been President and owner of Presidential Group South, Inc. since
      1985. Presidential Group South is a property management company servicing the
      needs of Central Florida. Presidential Group South has managed various real
      estate properties in Orange, Seminole and Volusia County, including single
      family homes, condominium and homeowners association, commercial and residential
      real estate buildings amounting to over 4,000 units. Mr. Guadagnino is a
      licensed broker and certified association manager.  He has been
      licensed in Maryland, Virginia and Washington, D.C.  Mr. Guadagnino
      has been in property management since 1975 and has developed condominiums in
      the
      Washington D.C. area. He has also served as a senior accountant at Eisen &
Lubin, a New York City CPA firm, where he was in charge of various real estate
      and retail client audits for major clients from 1969 to
      1972.****He is a graduate of the City College of New York,
      Bernard Baruch School of Business with a Bachelor of Science in Business
      Administration majoring in Accounting.





Family
      Relationships





Norman
      L.
      Thaw is the father of Wayne Thaw and Mitchell Thaw.





Compliance
      with Section 16(a) of the Securities Exchange Act of 1934





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
      officers and directors, and persons who own more than ten percent of a
      registered class of the Company's equity securities, to file reports of
      ownership and changes in ownership with the Securities and Exchange Commission
      (the “Commission”). Officers, directors and greater than ten percent
      stockholders are required by the Commission's regulations to furnish the Company
      with copies of all Section 16(a) forms they file. During the year ended June
      30,
      2007, no officers, directors or greater than 10% stockholders filed any forms
      late to the best of our knowledge.




20




Audit
      Committee / Lack of Other Committees





The
      Company has no standing nominating and compensation committees of the Board
      of
      Directors or committees performing similar functions. In January 2005, the
      Company formed our Audit Committee of its Board of Directors consisting of
      Larry
      J. Kaczmarek and Anthony Guadagnino as independent directors. An independent
      director is defined in Rule 4200(a)(14) of the NASD’s Listing Standards to mean
      a person other than an officer or employee of the Company or its subsidiaries
      or
      any other individual having a relationship which, in the opinion of the
      Company’s Board of Directors, would interfere with the exercise of independent
      judgment in carrying out the responsibilities of a director. The following
      persons should not be considered independent:





·
            A
                director who is employed by the Company or any of its affiliates
                for the
                current year or any of its affiliates for the current year or any
                of the
                past three years.


·
            A
                director who accepts any compensation from the Company or any of
                its
                affiliates in excess of $60,000 during the previous fiscal year other
                than
                compensation for Board service, benefits under a tax qualified retirement
                plan, or non discretionary
                compensation;


·
            A
                director who is a member of the immediate family of an individual
                who is,
                or has been in any of the past three years, employed by the Company
                or any
                of its affiliates as an executive officer.  Immediate family
                includes a person’s spouse, parents, children, siblings, mother-in-law,
                father-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law,
                and anyone who resides in such person’s
                home;


·
            A
                director who is a partner in, or a controlling shareholder or an
                executive
                officer of, any for-profit business organization to which the Company
                made, or from which the Company received, payments (other than those
                arising solely from investments in the Company’s securities) that exceed
                5% of the Company’s or business organizations consolidated gross revenues
                for that year, or $200,000, whichever is more, in any of the past
                three
                years;


·
            A
                director who is employed as an executive of another entity where
                any of
                the Company’s executives serve on that entity’s compensation
                committee.





Mr.
      Kaczmarek may be deemed to be a “Financial Expert” within the meaning of
      Sarbanes-Oxley Act of 2002, as amended.  The term “Financial Expert”
is defined as a person who has the following attributes: an understanding of
      generally accepted accounting principles and financial statements; has the
      ability to assess the general application of such principles in connection
      with
      the accounting for estimates, accruals and reserves; experience preparing,
      auditing, analyzing or evaluating financial statements that present a breadth
      and level of complexity of accounting issues that are generally comparable
      to
      the breadth and complexity of issues that can reasonably be expected to be
      raised by the Company’s financial statements, or experience actively supervising
      one or more persons engaged in such activities; an understanding of internal
      controls and procedures for financial reporting; and an understanding of audit
      committee functions.





In
      January 2005, a written charter for the Audit Committee was
      adopted.  Such charter includes, among other things, the
      following:




21





▪
            annually
                reviewing and reassessing the adequacy of the committee’s formal
                charter;


▪
            reviewing
                the annual audited financial statements with the Company's management
                and
                its independent auditors and the adequacy of its internal accounting
                controls;


▪
            reviewing
                analyses prepared by the Company's management and independent auditors
                concerning
                significant financial reporting issues and judgments made in connection
                withthe
                preparation of its financial
                statements; ▪
            being
              directly responsible for the appointment, compensation and oversight
              of
              the independent
              auditor, which shall report directly to the Audit Committee, including
              resolution of disagreements between management and the auditors regarding
              financialreporting for the purpose of preparing or issuing an audit
              report
              or related work;


▪
            reviewing
                the independence of the independent
                auditors;


▪
            reviewing
                the Company's auditing and accounting principles and practices with
                the
                independent
                auditors and reviewing major changes to its auditing and accountingprinciples
                and practices as suggested by the independent auditor or its
                management; ▪
            reviewing
              all related party transactions on an ongoing basis for potential conflict
              of interestsituations;
              and ▪
            all
              responsibilities given to the Audit Committee by virtue of the
              Sarbanes-Oxley Act of 2002,
              which was signed into law by President George W. Bush on July 30,
              2002.





Code
      of Ethics





Effective
      March 3, 2003, the Securities & Exchange Commission requires registrants
      like the Company to either adopt a code of ethics that applies to the Company’s
      Chief Executive Officer and Chief Financial Officer or explain why the Company
      has not adopted such a code of ethics.  For purposes of item 406 of
      Regulation S-K, the term “code of ethics” means written standards that are
      reasonably designed to deter wrongdoing and to promote:





·
            Honest
                and ethical conduct, including the ethical handling of actual or
                apparent
                conflictsof interest between personal and professional
                relationships;


·
            Full,
                fair, accurate, timely and understandable disclosure in reports and
                documents thatthe Company files with, or submits to, the Securities
&
                Exchange Commission and inother public communications made by the
                Company;


·
            Compliance
                with applicable governmental law, rules and
                regulations;


·
            The
                prompt internal reporting of violations of the code to an appropriate
                person orpersons identified in the code;
                and


·
            Accountability
                for adherence to the code.





In
      September 2005, the Company adopted a Code of Ethics which was filed as Exhibit
      14.1 to its Form 10-K for its fiscal year ended June 30, 2005. No changes have
      been made to the Code of Ethics.


22


Item
      10.  Executive Compensation.





The
      following table sets forth the overall compensation earned over the fiscal
      year
      ended June 30, 2007 by (1) each person who served as the principal executive
      officer of the Company during fiscal year 2007; (2) the Company’s most highly
      compensated (up to a maximum of two) executive officers as of June 30, 2007
      with
      compensation during fiscal year 2007 of $100,000 or more; and (3) those two
      individuals, if any, who would have otherwise been  included in
      section (2) above but for the fact that they were not serving as an executive
      of
      the Company as of June 30, 2007.




**Salary Compensation****Name and**
              **Principal**
              **Position**
            
            **Fiscal**
              **Year**
            
            **Salary ($)**
            
            **Bonus**
              **($)**
            
            **Stock**
              **Awards**
            
            **Options**
              **Awards**
              **($)(1)**
            
            **Non-Equity**
              **Incentive Plan**
              **Compensation**
              **($)**
            
            **Nonqualified**
              **Deferred**
              **Compensation**
              **Earnings ($)**
            
            **All Other**
              **Compensation**
              **($) (2)(3)**
            
            **Total ($)**Wayne
                Thaw
            
            2007
            
            $
            224,323
            
            30,000
            
            —
            
            $-
            —
            
            —
            
            —
            
            $  109,106
                (4)
            
            $
            363,429Chief
                Executive
              OfficerPatrick
                Hoscoe
            
            2007
            
            $   130,000
            
            42,500
            
            —
            
            $
            —
            
            —
            
            —
            
            $  --------
            
            $
            172,500Vice-President







(1)
            Reflects
                dollar amount expensed by the company during applicable fiscal year
                for
                financial statement reporting purposes pursuant to FAS 123R.  FAS
                123R requires the company to determine the overall value of the options
                as
                of the date of grant based upon the Black-Scholes method of valuation,
                and
                to then expense that value over the service period over which the
                options
                become exercisable (vest).  As a general rule, for
                time-in-service-based options, the company will immediately expense
                any
                option or portion thereof which is vested upon grant, while expensing
                the
                balance on a pro rata basis over the remaining vesting term of the
                option.  For a description FAS 123R and the assumptions used in
                determining the value of the options under the Black-Scholes model
                of
                valuation, see the notes to the financial statements included with
                this
                Form 10-KSB.




(2)
            Includes
                all other compensation not reported in the preceding columns, including
                (i) perquisites and other personal benefits, or property, unless
                the
                aggregate amount of such compensation is less than $10,000; (ii)
                any
                “gross-ups” or other amounts reimbursed during the fiscal year for the
                payment of taxes; (iii) discounts from market price with respect
                to
                securities purchased from the company except to the extent available
                generally to all security holders or to all salaried employees; (iv)
                any
                amounts paid or accrued in connection with any termination (including
                without limitation through retirement, resignation, severance or
                constructive termination, including change of responsibilities) or
                change
                in control; (v) contributions to vested and unvested defined contribution
                plans; (vi) any insurance premiums paid by, or on behalf of, the
                company
                relating to life insurance for the benefit of the named executive
                officer;
                and (vii) any dividends or other earnings paid on stock or option
                awards
                that are not factored into the grant date fair value required to
                be
                reported in a preceding column.




(3)
            Includes
                compensation for service as a director described under Director
                Compensation, below.




23






(4)
            Represents
                rent payments made to RKW of $104,474 and personal use of company
                car
                valued at $4,632; it being noted that the car was purchased in fiscal
                2006
                and that the personal usage is calculated based on personal miles
                (30% of
                use) multiplied by the standard mileage rate (48.5 cents a
                mile).  The foregoing amounts do not include insurance
                reimbursements of approximately $2,000 per year and property taxes
                paid of
                approximately $9,500 per year. See “Item
                12.”




No
      outstanding common share purchase options or other equity-based awards granted
      to or held by any named executive officer in 2007 were repriced or otherwise
      materially modified, including extension of exercise periods, the change of
      vesting or forfeiture conditions, the change or elimination of applicable
      performance criteria, or the change of the bases upon which returns are
      determined, nor was there any waiver or modification of any specified
      performance target, goal or condition to payout.




**Executive
      Officer Outstanding Equity Awards At Fiscal Year-End**




The
      following table provides certain information concerning any common share
      purchase options, stock awards or equity incentive plan awards held by each
      of
      our named executive officers that were outstanding as of June 30,
      2007.




**Option Awards**
            
            **Stock Awards****Name**
            
            
            **Number of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options(#)**
              **Exercisable**
            
            
            **Number of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options(#)**
              **Unexercisable**
            
            
            **Equity**
              **Incentive Plan**
              **Awards:**
              **Number of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Unearned**
              **Options (#)**
            
            
            **Option**
              **Exercise**
              **Price ($)**
            
            **Option**
              **Expiration**
              **Date**
            
            **Number of**
              **Shares or**
              **Units of**
              **Stock That**
              **Have Not**
              **Vested (#)**
            
            
            **Market**
              **Value of**
              **Shares or**
              **Units of**
              **Stock
                That**
              **Have Not**
              **Vested**
            
            
            **Equity**
              **Incentive**
              **Plan**
              **Awards:**
              **Number**
              **of**
              **Unearned**
              **Shares,**
              **Units or**
              **Other**
              **Rights**
              **That Have**
              **Not**
              **Vested**
            
            
            **Equity**
              **Incentive Plan**
              **Awards:**
              **Market or**
              **Payout Value of**
              **Unearned**
              **Shares, Units or**
              **Other Rights**
              **That Have Not**
              **Vested**Wayne
                Thaw
            
            
            
            5,000
            
            
            
            —
            
            
            
            —
            
            
            $
            22.60
            
            01/30/16
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —(1)
            
            
            
            5,000
            
            
            
            —
            
            
            
            —
            
            
            $
            21.00
            
            08/17/15Patrick
                Hoscoe
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            $
            —
            
            --------
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —


____________


(1) All options are fully vested




**Lack
      of Employment Agreements**




The
      Company has no employment agreements with its executive officers. Wayne Thaw
      currently receives an annual salary of approximately $220,000 plus such
      increases and bonuses as determined by the Board of Directors.  The
      Company also pays for the cost of gasoline, repairs and insurance related to
      an
      automobile purchased by the Company for Wayne Thaw’s use.  Patrick
      Hoscoe currently receives an annual salary of $130,000 plus such increases
      and
      bonuses as determined by the Company’s Board of Directors.





The
      Company leases its employees from a non-affiliated company which has established
      a 401(k) plan pursuant to which the Company matches employees’ contributions of
      an amount equal to $1.00 per employee’s contributed dollar up to a maximum
      matching contribution of six percent of the compensation of each respective
      employee. The Company has no other annuity, pension, or retirement benefits
      for
      its employees.  Except as described herein, the Company has not
      afforded any of its officers or directors any other personal benefits, the
      value
      of which exceeds 10% of his cash compensation, which is not directly related
      to
      job performance or provided generally to all salaried employees.




24




**CORPORATE
      GOVERNANCE**




**BOARD
      OF DIRECTORS**




**Board
      Members Who Are Deemed Independent**




Our
      board
      of directors has determined that three of our directors, namely, Larry J.
      Kaczmarek Jerrold Lazarus and Anthony Guadagnino, are each an “independent” as
      that term is defined in Rule 4200(a)(14) of the NASD’s Listing
      Standards.




**DIRECTOR
      COMPENSATION**




Directors,
      who are executive officers, do not presently receive compensation for serving
      on
      the Board or on its committees, although such compensation may be paid in the
      future.  Directors who are not serving as executive officers receive
      modest cash fees for attendance at board meetings and committee meetings and
      are
      eligible to receive stock options at the discretion of the Board. Our Directors
      who are not executive officers or on our audit committee, are also eligible
      to
      receive compensation as consultants to our company. To date, no options or
      equity awards have been made to our non-employee / non-executive directors.
      All
      directors shall be reimbursed for their reasonable out of pocket expenses
      associated with attending the meeting.





**Director
      Compensation**




The
      following table shows the overall compensation earned for the 2007 fiscal year
      with respect to each non-employee and non-executive director as of June 30,
      2007.




**DIRECTOR COMPENSATION****Name and**
                **Principal**
                **Position**
              
              **Fees**
                **Earned**
                **or Paid**
                **in Cash**
                **($)**
              
              
              **Stock**
                **Awards ($)**
              
              
              **Option**
                **Awards ($)**
                **(1)**
              
              
              **Non-Equity**
                **Incentive Plan**
                **Compensation**
                **($) (2)**
              
              
              **Nonqualified**
                **Deferred**
                **Compensation**
                **Earnings ($)**
              
              
              **All Other**
                **Compensation ($)**
                **(3)**
              
              
              **Total ($)**Larry
                  Kacmarek, Director
              
              $
              2,850
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              2,850Jerrold
                  Lazarus, Director
              
              $
              1,000
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              1,000Anthony
                  Guadagnino, Director
              
              $
              3,050
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              3,050Norman
                  Thaw, Director
              
              $
              0
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              0Mitchell
                  A. Thaw, Director
              
              $
              0
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              0


(1)
            Reflects
                dollar amount expensed by the company during applicable fiscal year
                for
                financial statement reporting purposes pursuant to FAS 123R.  FAS
                123R requires the company to determine the overall value of the options
                as
                of the date of grant based upon the Black-Scholes method of valuation,
                and
                to then expense that value over the service period over which the
                options
                become exercisable (vest).  As a general rule, for
                time-in-service-based options, the company will immediately expense
                any
                option or portion thereof which is vested upon grant, while expensing
                the
                balance on a pro rata basis over the remaining vesting term of the
                option.  For a description FAS 123 R and the assumptions used in
                determining the value of the options under the Black-Scholes model
                of
                valuation, see the notes to the financial statements included with
                this
                prospectus.




25




(2)
            Excludes
                awards or earnings reported in preceding
                columns.




(3)
            Includes
                all other compensation not reported in the preceding columns, including
                (i) perquisites and other personal benefits, or property, unless
                the
                aggregate amount of such compensation is less than $10,000; (ii)
                any
                “gross-ups” or other amounts reimbursed during the fiscal year for the
                payment of taxes; (iii) discounts from market price with respect
                to
                securities purchased from the company except to the extent available
                generally to all security holders or to all salaried employees; (iv)
                any
                amounts paid or accrued in connection with any termination (including
                without limitation through retirement, resignation, severance or
                constructive termination, including change of responsibilities) or
                change
                in control; (v) contributions to vested and unvested defined contribution
                      plans; (vi) any insurance premiums paid by, or on behalf of,
                the company
                relating to life insurance for the benefit of the director; (vii)
                any
                consulting fees earned, or paid or payable; (viii) any annual costs
                of
                payments and promises of payments pursuant to a director legacy program
                and similar charitable awards program; and (ix) any dividends or
                other
                earnings paid on stock or option awards that are not factored into
                the
                grant date fair value required to be reported in a preceding
                column.







Stock
      Option Plans





The
      1992 Plan





The
      1992
      Incentive and Non-Qualified Stock Option Plan, (the “1992 Plan”), was approved
      by the Board of Directors on November 17, 1992 and ratified by
      stockholders on January 29, 1993.  The 1992 Plan covered 60,000 shares
      of Common Stock, subject to adjustment of shares under the anti-dilution
      provisions of the 1992 Plan.  The 1992 Plan authorizes the issuance of
      the options covered thereby as either “Incentive Stock Options” within the
      meaning of the Internal Revenue Code of 1986, as amended, or as “Non-Statutory
      Stock Options.”  Persons eligible to receive options under the 1992
      Plan included employees, directors, officers, consultants or advisors, provided
      that bona fide services shall be rendered by consultants or advisors and such
      services must not be in connection with the offer or sale of securities in
      a
      capital raising transaction; however, only employees (who may also be officers
      and/or directors) were eligible to receive an Incentive Stock Option. The 1992
      Plan also provided that no options may be granted after
      November 16, 2002.  In December 1996, the Company granted
      ten year non-statutory options to purchase 30,000 shares at an exercise price
      of
      $3.25 per share to Wayne Thaw (10,000 shares), Jerrold Lazarus (10,000 shares)
      and Kathie Thaw (10,000 shares).  In December 1998, the Company
      granted ten year non-statutory stock options to purchase 7,000 shares at an
      exercise price of $5.00 per share to Jerrold Lazarus (2,000 shares), Wayne
      Thaw
      (3,000 shares) and Patrick Hoscoe (2,000 shares).   In December
      2001, the Company granted Wayne Thaw 10-year Non-Statutory Stock Options to
      purchase 23,000 shares of the Company’s Common Stock at an exercise price of
      $6.80 per share.  In April 2002, Jerrold Lazarus exercised his options
      to purchase 12,000 shares.  Between October and December 2006, Wayne
      Thaw, Kathie Thaw and Patrick Hoscoe exercised options to purchased 36,000,
      10,000 and 2,000 shares, respectively. Accordingly, all 60,000 options have
      been
      granted and exercised under the 1992 Plan.




26





The
      1992
      Plan was administered by the Company's Board of Directors or a stock option
      committee consisting of three members of the Board which has the authority
      to
      determine the persons to whom options shall be granted, whether any particular
      option shall be an Incentive Option or a Non-Statutory Option, the number of
      shares to be covered by each option, the time or times at which options will
      be
      granted or may be exercised and the other terms and provisions of the
      Options.





Under
      the
      1992 Plan, the aggregate fair market value (determined at the time the option
      is
      granted) of the optioned stock for which Incentive Stock Options are exercisable
      for the first time by any employee during any calendar year (under all such
      Plans of the individual's Employer Corporation and its parent and subsidiary
      corporation) shall not exceed $100,000.





The
      1992
      Plan also provided that the Board of directors shall determine the exercise
      price of the Common Stock under each option.  The 1992 Plan also
      provided that:  (i) the exercise price of Incentive Stock Options
      granted there-under shall not be less than 100% (110% if the optionee owns
      10%
      or more of the outstanding voting securities of the Company) of the fair market
      value of such shares on the date of grant, as determined by the Board or
      Committee, and (ii) no option by its terms may be exercised more than ten years
      (five years in the case of an Incentive Stock Option, where the optionee owns
      10% or more of the outstanding voting securities of the Company) after the
      date
      of grant. All Stock Options are non-transferable except by will or the laws
      of
      descent and distribution.





The
      1998 Plan





The
      1998
      Incentive and Non-Qualified Stock Option Plan, (the “1998 Plan”), was approved
      by the Board of Directors effective December 15, 1998 subject to stockholder
      approval within 12 months. The 1998 Plan, as amended by stockholders in December
      2003, covers 60,000 shares of Common Stock, subject to adjustment of shares
      under the anti-dilution provisions of the 1998 Plan.  The 1998 Plan
      authorizes the issuance of the options covered thereby as either “Incentive
      Stock Options” within the meaning of the Internal Revenue Code of 1986, as
      amended, or as “Non-Statutory Stock Options.”  Persons eligible to
      receive options under the 1998 Plan includes employees, directors, officers,
      consultants or advisors, provided that bona fide services shall be rendered
      by
      consultants or advisors and such services must not be in connection with the
      offer or sale of securities in a capital raising transaction; however, only
      employees (who may also be officers and/or directors) are eligible to receive
      an
      Incentive Stock Option.  The 1998 Plan also provides that no options
      may be granted after December 15, 2008.  Except for the foregoing, the
      1998 Plan is identical to the 1992 Plan. Ten-year Non-Statutory Stock Options
      to
      purchase 5,000 shares exercisable at $21.00 per share were granted to Wayne
      Thaw
      in August 2005 and 10-year Non-Statutory Stock Options to purchase 5,000 shares
      exercisable at $22.60 were granted to Wayne Thaw in January 2006.  No
      other options have been granted under the 1998 Plan. See “Item 12.”








Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and
                Related
              Stockholder
                Matters.





As
      of
      September 21, 2007, the Company had outstanding 307,795 shares of Common
      Stock.  The only persons of record who presently hold or are known to
      own (or believed by the Company to own) beneficially more than 5% of the
      outstanding shares of such class of stock is listed below.  The
      following table also sets forth certain information as to holdings of the
      Company’s Common Stock of all officers and directors individually, and all
      officers and directors as a group.  The shares shown in the table
      below for Norman Thaw and his sons, Wayne Thaw and Mitchell Thaw are not
      beneficially owned by each other and are listed separately.




27




Title
                of Class
            Name
                and  Address of
              Beneficial  Owner
                (1)
            Number
                of
              Shares
            Approximate  PercentCommon
                Stock
            Wayne
                Thaw and his wife Kathie Thaw (3)(4)
            101,478
            31.9Common
                Stock
            Norman
                L. Thaw (2)(4)(5)
            57,128
            18.5Common
                Stock
            Jerrold
                Lazarus
            -0-
            -0-Common
                Stock
            Patrick
                Hoscoe
            2,000
            .6Common
                Stock
            Mitchell
                A. Thaw (4)
            25,525
            8.3Common
                Stock
            Larry
                J. Kaczmarek
            -0-
            -0-Common
                Stock
            Anthony
                Guadagnino
            -0-
            -0-Common
                Stock
            All
                Directors and Officers as a
              Group
                (7 persons) (3)
            186,131
            58.5





(1)
            All
                shares are directly owned, and the sole investment and voting power
                is
                held, by the persons named.  The address for all officers and
                directors is c/o TNR Technical, Inc., 301 Central Park Drive, Sanford,
                Florida 32771.





(2)
            May
                be deemed to be a parent and/or founder of the Company under the
                Securities Act of 1933, as amended and may be deemed to be a “control
                person” of the Company within the meaning of the Securities Exchange Act
                of 1934.





(3)
            Includes
                options to purchase 10,000 shares granted to Wayne
                Thaw.





(4)
            Wayne
                Thaw and Kathie Thaw are married and their individual stock ownership
                which is in a family trust for their benefit is shown
                jointly.   Norman Thaw is the father of Wayne Thaw and
                Mitchell A. Thaw.





(5)
            Norman
                Thaw’s stock ownership is held in a revocable
                trust.





The
      Company does not know of any arrangement or pledge of its securities by persons
      now considered in control of the Company that might result in a change of
      control of the Company.




28







Equity
      Compensation Plan





The
      following summary information relates to our Compensation Plans described in
      Item 11 pursuant to which we have granted options to purchase our Common Stock
      with the information set forth in the table as of the filing date of this Form
      10-KSB:





(a)
            (b)
            (c)Plan
                category
            Number
                of securities to
              be
                issued upon exercise
              of
                outstanding options
            Weighted
                average
              exercise
                price of
              outstanding
              options
                (1)
            Number
                of securities
              remaining
                available for
              future
                issuance under
              equity
                compensation plan
              (excluding
                securities
              reflected
                in column (a))Equity
                compensation
              Plans
                approved by
              Security
                Holders
            10,000
            21.80
            50,000


_____________________


(1)
            Based
                upon 5,000 options exercisable at $21.00 per share and 5,000 options
                exercisable at $22.60 per share.





Item
                12.
            Certain
                Relationships and Related
                Transactions.





See
      Item
      2 regarding the description of lease between the Company and a RKW Holding
      Ltd.
      (“RKW”), a Florida Limited Partnership, controlled by Wayne Thaw.  For
      the fiscal year ended 2007 and 2006, $104,474 and $99,595, respectively, were
      paid by the Company to RKW, which amount will increase by approximately 4%
      for
      each new contract year, which begins on June 1st of each
      year. The
      foregoing amounts paid to RKW do not include insurance reimbursement of
      approximately $2,000 per year and property taxes paid of approximately $9,500
      per year.





Item
                13.
            Exhibits








3
            Certificate
              of Incorporation and Amendments thereto. (1)3(A)
            By-Laws.
              (1)3(B)
            February
                1992 Certificate of Amendment to Certificate ofIncorporation
                (2)10
            Lease
                Agreement dated January 17, 1996 by and between RKWHolding
                Ltd. and the Registrant (3)10.1
            Amended
              lease with RKW Holdings Ltd. (5)11
            Earnings
              per share.  See Financial Statements14.1
            Code
              of Ethics and Code of Conduct (6)31
            Chief
                Executive Officer and Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certification (*)32
            Chief
                Executive Officer and Chief Financial Officer Section 1350Certification
                (*)99
            1998
              Incentive and Non-Statutory Stock Option Plan (4)99.1
            Amendment
              to 1998 Incentive and Non-Statutory Stock Option Plan
              (6)




_____________
 *
        Filed
        herewith.
 (1)
              Exhibits
                  3 and 3(A) are incorporated by reference from Registration
                  No. 2-85110 whichwere
                  filed in a Registration Statement on Form
                  S-18.
 (2)
              Incorporated
                  by reference to Form 10-KSB for the fiscal year ended
                  July 31, 1992.
 (3)
              Incorporated
                  by reference to Form 10-KSB for the fiscal year ended July 31,
                  1996.
 (4)
              Incorporated
                  by reference to Form 10-KSB for the fiscal year ended July 31,
                  1999.
 (5)
              Incorporated
                  by reference to Form 8-K dated June 8, 2005 filed for June 1, 2005
                  -date
                  of earliest event.
 (6)
              Incorporated
                  by reference to Form 10-KSB for the fiscal year ended June 30,
                  2005.




29




Item
                14.
            Principal
                Accountant Fees and Services





**Cross
      Fernandez & Riley, LLP**




The
      firm
      of Cross Fernandez & Riley, LLP (“CFR”) was retained by the Company as its
      new independent auditors on February 14, 2007.  See “Item
      8.”





Audit
      Fees





For
      the
      fiscal year ended June 30, 2007, the aggregate fees for professional services
      rendered by Cross, Fernandez & Riley, LLP (“CFR”) for the audit of the
      Company’s annual financial statements for the year ended June 30, 2007 included
      in the Company’s Annual Report on Form 10-KSB and the  review of its
      interim financial statements for the quarter ended March 31, 2007 included
      in
      the Company’s Quarterly Report on Form 10-QSB totaled approximately
      $53,400.





All
      Other Fees





For
      the
      fiscal year ended June 30, 2007, CFR was not engaged to perform audit related
      services, tax services or other services.





**Tschopp,
      Whitcomb & Orr P.A.**





Audit
      Fees





For
      the
      fiscal years ended June 30, 2007 and June 30, 2006, the aggregate fees billed
      for professional services rendered by Tschopp, Whitcomb & Orr P.A. (“TWO”)
      for the fiscal 2006 audit of the Company’s annual financial statements and the
      first and second quarters of fiscal 2007 and all fiscal 2006 reviews of its
      financial statements included in the Company’s quarterly reports (exclusive of
      the form 10-QSB for the quarter ended March 31, 2007 totaled approximately
      $7,900 and $19,000, respectively.





30





Financial
      Information Systems Design and Implementation Fees





For
      the
      fiscal years ended June 30, 2007 and June 30, 2006, there were no fees billed
      for professional services rendered by TWO in connection with, directly or
      indirectly, operating or supervising the operation of its information system
      or
      managing its local area network.





All
      Other Fees





For
      the
      fiscal years ended June 30, 2007 and June 30, 2006, there was approximately
      $5,100 and $5,000, respectively, in fees billed for tax and limited consulting
      services.





31


**SIGNATURES**





Pursuant
      to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the Registrant has caused this Report to be signed on its behalf by the
      undersigned, thereunto duly authorized.




**TNR
              TECHNICAL,
              INC.**By:
            /s/ *Wayne
              Thaw*Wayne
              ThawChief
              Executive Officer




Dated:  Sanford,
        Florida


September 27, 2007





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




Signature
            
            Title
            
            Date/s/
                Norman L. Thaw
            
            Director
            
            September
                27, 2007Norman
                L. ThawDirectorJerrold
                Lazarus/s/
                Wayne Thaw
            
            Chairman
                of the
            
            September
                27, 2007Wayne
                Thaw
            
            Board,
              ChiefExecutive
              OfficerPresident,Pricipal
              Financialand
              AccountingOfficer


/s/
                Mitchell
                Thaw
            
            Director
            
            September
                27,
                2007Mitchell
                Thaw/s/
                Patrick
                Hoscoe
            
            Vice
                President
            
            September
                27,
                2007Patrick
                Hoscoe
            
            and
              Director/s/
                Larry J.
                Kaczmarek
            
            Director
            
            September
                27,
                2007Larry
                J.
                Kaczmarek/s/
              Anthony Guadagnino
            
            Director
            
            September
              27, 2007Anthony
              Guadagnino








Norman
      Thaw, Wayne Thaw, Mitchell Thaw, Patrick Hoscoe, Jerrold Lazarus, Larry
      Kaczmarek and Anthony Guadagnino represent all the members of the Board of
      Directors.














32