UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549





FORM
10-Q


(Mark
one)





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


For the
quarterly period ended August 31, 2009





or


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


For the
transition period from _______ to _______





Commission
File No.  1-4978





SOLITRON DEVICES,
INC.


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
                    
                    22-1684144(State
      or Other Jurisdiction of
                    
                    (I.R.S.
      EmployerIncorporation
      or Organization)
                    
                    Identification
      No.)





3301 Electronics Way, West Palm Beach,
      Florida
                33407(Address of Principal Executive Offices)
                (Zip
      Code)





(561)
848-4311


(Registrant’s
Telephone Number, Including Area Code)




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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
   Yes   ̈    No   ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,”  “accelerated filer,”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one)




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




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes  ̈   No x




The
number of shares of the registrant’s common stock, $0.01 par value, outstanding
as of September 30, 2009 was 2,263,775.









SOLITRON
DEVICES, INC.





TABLE OF
CONTENTS




Page No.PART 1 - FINANCIAL
      INFORMATIONItem
                                                              1.
                                                              Financial
      Statements (unaudited)Condensed
      Balance Sheets August
      31, 2009 and February 28, 2009
                                                              
                                                              3Condensed
      Statements of Income Three
      and Six Months Ended August 31, 2009 and 2008
                                                              
                                                              4Condensed
      Statements of Cash Flows Six
      Months Ended August 31, 2009 and 2008
                                                              
                                                              5Notes
      to Condensed Financial Statements
                                                              
                                                              6-11Item
                                                              2.
                                                              Management’s
      Discussion and Analysis of Financial Condition and Results
      of Operations
                                                              
                                                              12-15Item
                                                              3.
                                                              Quantitative
      and Qualitative Disclosures about Market Risk
                                                              
                                                              15-16Item
                                                              4.
                                                              Controls
      and Procedures
                                                              
                                                              17PART II – OTHER INFORMATIONItem
                                                              6.
                                                              Exhibits
                                                              
                                                              17Signatures
                                                              
                                                              
                                                              18




2





PART I – FINANCIAL
INFORMATION





ITEM
1.        FINANCIAL
STATEMENTS





SOLITRON DEVICES,
INC.


CONDENSED BALANCE
SHEETS


(Unaudited,
in thousands)





August 31,
                          2009
                        
                        
                        Feb 28,
                          2009ASSETSCURRENT
      ASSETS :Cash
      and cash equivalents
                        
                        $
                        129
                        
                        
                        $
                        440Treasury
      bills
                        
                        
                        5,325
                        
                        
                        
                        5,113Accounts
      receivable, less allowance for doubtful accounts of $2
                        
                        
                        943
                        
                        
                        
                        871Inventories,
      net
                        
                        
                        2,706
                        
                        
                        
                        2,569Prepaid
      expenses and other current assets
                        
                        
                        144
                        
                        
                        
                        139TOTAL
      CURRENT ASSETS
                        
                        
                        9,247
                        
                        
                        
                        9,132PROPERTY,
      PLANT AND EQUIPMENT, net
                        
                        
                        559
                        
                        
                        
                        581OTHER
      ASSETS
                        
                        
                        56
                        
                        
                        
                        52TOTAL
      ASSETS
                        
                        $
                        9,862
                        
                        
                        $
                        9,765LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable – Post-petition
                        
                        $
                        401
                        
                        
                        $
                        443Accounts
      payable – Pre-petition, current portion
                        
                        
                        1,072
                        
                        
                        
                        1,086Customer
      deposits
                        
                        
                        39
                        
                        
                        
                        61Accrued
      expenses and other current liabilities
                        
                        
                        354
                        
                        
                        
                        570TOTAL
      CURRENT LIABILITIES
                        
                        
                        1,866
                        
                        
                        
                        2,160LONG
      TERM LIABILITIES, net of current portion
                        
                        
                        148
                        
                        
                        
                        158TOTAL
      LIABILITIES
                        
                        
                        2,014
                        
                        
                        
                        2,318COMMITMENTS
      & CONTINGENCIESSTOCKHOLDERS’
      EQUITYPreferred
      stock, $.01 par value, authorized 500,000 shares, none
    issued
                        
                        
                        -0-
                        
                        
                        
                        -0-Common
      stock, $.01 par value, authorized 10,000,000 shares,
    2,263,775shares
      issued and outstanding, net of 173,287 shares of treasury
      stock
                        
                        
                        23
                        
                        
                        
                        23Additional
      paid-in capital
                        
                        
                        2,733
                        
                        
                        
                        2,733Retained
      earnings
                        
                        
                        5,092
                        
                        
                        
                        4,691TOTAL
      STOCKHOLDERS’ EQUITY
                        
                        
                        7,848
                        
                        
                        
                        7,447TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
                        $
                        9,862
                        
                        
                        $
                        9,765




The
accompanying notes are an integral part of the financial
statements.




3





SOLITRON DEVICES,
INC.


CONDENSED STATEMENTS OF
INCOME


THREE AND SIX MONTHS ENDED
AUGUST 31,


(Unaudited,
in thousands except for share and per share amounts)





Three months
                  
                  
                  Six Months2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008NET
      SALES
                  
                  $
                  1,938
                  
                  
                  $
                  2,071
                  
                  
                  $
                  3,758
                  
                  
                  $
                  4,240Cost
      of Sales
                  
                  
                  1,316
                  
                  
                  
                  1,649
                  
                  
                  
                  2,865
                  
                  
                  
                  3,272Gross
      Profit
                  
                  
                  622
                  
                  
                  
                  422
                  
                  
                  
                  893
                  
                  
                  
                  968Selling,
      General and Administrative Expenses
                  
                  
                  241
                  
                  
                  
                  233
                  
                  
                  
                  512
                  
                  
                  
                  517Operating
      Income
                  
                  
                  381
                  
                  
                  
                  189
                  
                  
                  
                  381
                  
                  
                  
                  451OTHER
      INCOMEOther
      Income, Net
                  
                  
                  16
                  
                  
                  
                  -
                  
                  
                  
                  9
                  
                  
                  
                  -Interest
      Income
                  
                  
                  3
                  
                  
                  
                  25
                  
                  
                  
                  11
                  
                  
                  
                  35Interest
      Expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Other
      Income, Net
                  
                  
                  19
                  
                  
                  
                  25
                  
                  
                  
                  20
                  
                  
                  
                  35Net
      Income
                  
                  $
                  400
                  
                  
                  $
                  214
                  
                  
                  $
                  401
                  
                  
                  $
                  486INCOME
      PER SHARE      : Basic
                  
                  $
                  .18
                  
                  
                  $
                  .09
                  
                  
                  $
                  .18
                  
                  
                  $
                  .21:
      Diluted
                  
                  $
                  .16
                  
                  
                  $
                  .09
                  
                  
                  $
                  .16
                  
                  
                  $
                  .20WEIGHTED
      AVERAGESHARES
      OUTSTANDING  : Basic
                  
                  
                  2,263,775
                  
                  
                  
                  2,262,904
                  
                  
                  
                  2,263,775
                  
                  
                  
                  2,262,904:
      Diluted
                  
                  
                  2,451,081
                  
                  
                  
                  2,474,926
                  
                  
                  
                  2,452,983
                  
                  
                  
                  2,476,949





The
accompanying notes are an integral part of the financial
statements.




4




SOLITRON DEVICES,
INC.


CONDENSED STATEMENTS OF CASH
FLOWS


SIX MONTHS ENDED AUGUST
31,


(Unaudited,
in thousands)





2009
                    
                    
                    2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Income
                    
                    $
                    401
                    
                    
                    $
                    486Adjustments
      to reconcile net income to net cash provided
      by operating activities:Depreciation
      and amortization
                    
                    
                    100
                    
                    
                    
                    98Changes
      in operating assets and liabilities:(Increase)
      Decrease in:Accounts
      receivable
                    
                    
                    (72
                    )
                    
                    
                    243Inventories
                    
                    
                    (137
                    )
                    
                    
                    405Prepaid
      expenses and other current assets
                    
                    
                    (5
                    )
                    
                    
                    (36
                    )Other
      non-current assets
                    
                    
                    (4
                    )
                    
                    
                    5Increase
      (Decrease) in:Accounts
      payable – Post-petition
                    
                    
                    (42
                    )
                    
                    
                    (215
                    )Accounts
      payable – Pre-petition
                    
                    
                    (14
                    )
                    
                    
                    (14
                    )Customer
      deposits
                    
                    
                    (22
                    )
                    
                    
                    (131
                    )Accrued
      expenses and other current liabilities
                    
                    
                    (216
                    )
                    
                    
                    (177
                    )Other
      non-current liabilities
                    
                    
                    (10
                    )
                    
                    
                    -NET
      CASH PROVIDED BY OPERATING ACTIVITIES
                    
                    
                    (21
                    )
                    
                    
                    664CASH
      FLOW FROM INVESTING ACTIVITIES:Investment
      in treasury bills
                    
                    
                    (212
                    )
                    
                    
                    (569
                    )Purchases
      of property, plant and equipment
                    
                    
                    (78
                    )
                    
                    
                    (94
                    )NET
      CASH (USED IN) INVESTING ACTIVITIES
                    
                    
                    (290
                    )
                    
                    
                    (663
                    )NET
      INCREASE/(DECREASE) IN CASH
                    
                    
                    (311
                    )
                    
                    
                    1CASH
      AT THE BEGINNING OF PERIOD
                    
                    
                    440
                    
                    
                    
                    75CASH
      AT THE END OF PERIOD
                    
                    $
                    129
                    
                    
                    $
                    76





The
accompanying notes are an integral part of the financial
statements.




5




SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





1.
            GENERAL AND
      SIGNIFICANT ACCOUNTING
POLICIES:





GENERAL:





The
financial information included herein is unaudited; however, such information
reflects all adjustments (consisting primarily of normal recurring adjustments),
which are, in the opinion of management, necessary for a fair statement of the
results for the interim period.




The
accompanying unaudited interim condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
for reporting on Form 10-Q.  Pursuant to such rules and regulations,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted.




The
information contained in this Quarterly Report on Form 10-Q should be read in
conjunction with the Notes to  the Consolidated Financial Statements
appearing in the Solitron Devices, Inc. Annual Report on Form 10-K for the year
ended February 28, 2009.




The
results of operations for the three-month period ended August 31, 2009 are not
necessarily indicative of the results to be expected for the entire year ending
February 28, 2010.




SIGNIFICANT ACCOUNTING
POLICIES:




Cash


Cash
includes demand deposits and money market accounts.  The Company has
$129,000 in cash deposits which is $121,000 under the $250,000 limit for FDIC
insurance.





Investment in Treasury
Bills


During
the first quarter of last fiscal year, the Company’s management decided to
reclassify its investment in treasury bills from cash and cash equivalents and
report it separately as “Investment in Treasury Bills”. Investment in Treasury
Bills includes treasury bills with maturities of one year or less and is stated
at market value.





Accounts
Receivable


The
Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated credit risk by performing credit checks
and actively pursuing past due accounts.  An allowance for doubtful
accounts has been established.  The allowance amount was $2,000 as of
August 31, 2009 and $7,000 as of February 28, 2009.  The Company has
not had a bad debt in the past three years.





Shipping and
Handling


Shipping
and handling costs billed to customers are recorded in net
sales.  Shipping costs incurred by the Company are recorded in cost of
sales.





Inventories


Inventories
are stated at the lower of cost or market.  Cost is determined using
the “first-in, first-out” (FIFO) method.  The Company buys raw
material only to fill customer orders.  Excess raw material is created
only when a vendor imposes a minimum buy in excess of actual
requirements.  Such excess material will usually be utilized to meet
the requirements of the customer’s subsequent orders.  If excess
material is not utilized after two fiscal years it is fully
reserved.  Any inventory item once designated as reserved is carried
at zero value in all subsequent valuation activities.




The
Company’s inventory valuation policy is as follows:





Raw
      material /Work in process:
            All
      material purchased, processed and/or used in the last two fiscal years is
      valued at the lower of its acquisition cost or market.  All
      material not purchased/used in the last two fiscal years is fully reserved
      for.




6





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





Finished
      goods:
            All
      finished goods with firm orders for later delivery are valued (material
      and overhead) at the lower of cost or market.  All finished
      goods with no orders are fully
reserved.





Direct
      labor costs:
            Direct
      labor costs are allocated to finished goods and work in process inventory
      based on engineering estimates of the amount of man hours required from
      the different direct labor departments to bring each device to its
      particular level of completion.





Stock Based
Compensation


In
December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
148, “Accounting for Stock-Based Compensation-Transition and Disclosure, and
amendment of FASB Statement No. 123”.  This statement amends SFAS No.
123, to provide alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation.  This statement also amends the disclosure requirements
of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported
results.  The Company has prepared its interim financial statements
for the quarters ended August 31, 2009 and August 31, 2008 in accordance with
SFAS No. 148.





During
the quarters ended August 31, 2009 and August 31, 2008, the Company did not
issue any stock-based compensation to its employees or directors.




2.
            ENVIRONMENTAL
      REGULATION:





While the
Company believes that it has the environmental permits necessary to conduct its
business and that its operations conform to present environmental regulations,
increased public attention has been focused on the environmental impact of
semiconductor manufacturing operations.  The Company, in the conduct
of its manufacturing operations, has handled and does handle materials that are
considered hazardous, toxic or volatile under federal, state and local laws and,
therefore, is subject to regulations related to their use, storage, discharge
and disposal.  No assurance can be made that the risk of accidental
release of such materials can be completely eliminated.  In the event
of a violation of environmental laws, the Company could be held liable for
damages and the costs of remediation. In addition, the Company, along with the
rest of the semiconductor industry, is subject to variable interpretations and
governmental priorities concerning environmental laws and
regulations.  Environmental statutes have been interpreted to provide
for joint and several liability and strict liability regardless of actual
fault.  There can be no assurance that the Company will not be
required to incur costs to comply with, or that the operations, business or
financial condition of the Company will not be materially adversely affected by
current or future environmental laws or regulations.





3.
            ENVIRONMENTAL
      LIABILITIES:





The
Company entered into an Ability to Pay Multi-Site Settlement Agreement with the
United States Environmental Protection Agency (“USEPA”), effective February 24,
2006 (“Settlement Agreement”), to resolve the Company’s alleged liability to
USEPA at the following sites:  Solitron Microwave Superfund Site, Port
Salerno, Florida (“Port Salerno Site”); Petroleum Products Corporation Superfund
Site, Pembroke Park, Florida; Casmalia Resources Superfund Site, Santa Barbara,
California (“Casmalia Site”); Solitron Devices Site, Riviera Beach, Florida (the
“Riviera Beach Site”); and City Industries Superfund Site, Orlando, Florida
(collectively, the “Sites”).  The Settlement Agreement required the
Company to pay to USEPA the sum of $74,000 by February 24, 2008; the Company
paid the entire sum of $74,000 to USEPA on February 27, 2006. In addition, the
Company is required to pay to USEPA the sum of $10,000 or 5% of Solitron’s net
after-tax income over the first $500,000, if any, whichever is greater, for each
year from fiscal years 2009-2013.  For payment to USEPA to be above
$10,000 for any of these five years, the Company’s net income must exceed
$700,000 for such year, which has happened in fiscal year 2001, fiscal year
2006, fiscal year 2008 and fiscal year 2009.  In February 2009, the
Company paid $10,000 to USEPA for fiscal
year 2009 based on preliminary net income projections. In June 2009, the Company
paid an additional $15,000 pursuant to its obligations under the Settlement
Agreement. The Company accrued $40,000 for its remaining minimum obligations
under the Settlement Agreement.  This amount is reflected in “Accrued
expenses and other current liabilities” on the Company’s balance sheets at
August 31, 2009.




7





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





In
consideration of the payments made by the Company under the Settlement
Agreement, USEPA agreed not to sue or take any administrative action against the
Company with regard to any of the Sites.  The Company has also been
notified by a group of alleged responsible parties formed at the Casmalia Site
(“Casmalia PRP Group”) that, based on their review and lack of objection to the
Settlement Agreement, the Casmalia PRP Group does not anticipate pursuing the
Company for cost recovery at the Casmalia site.





On
October 21, 1993, a Consent Final Judgment was entered into between the Company
and the Florida Department of Environmental Protection (“FDEP”) in the Circuit
Court of the Nineteenth Judicial Circuit of Florida in and for Martin County,
Florida, in Case No. 91-1232 CA (the “Consent Final Judgment”).  The
Consent Final Judgment required the Company to remediate the Port Salerno and
Riviera Beach Sites, make monthly payments to escrow accounts for each Site
until the sale of the Sites to fund the remediation work, take all reasonable
steps to sell the two Sites and, upon the sale of the Sites, apply the net
proceeds from the sales to fund the remediation work.  Both Sites have
been sold pursuant to purchase agreements approved by FDEP.





Prior to
the sale of the Port Salerno Site and Riviera Beach Site, USEPA took over from
FDEP as the lead regulatory agency for the remediation of the
Sites.   At the closing of the sale of each Site, the net
proceeds of sale were distributed to USEPA and/or FDEP or other parties, as
directed by the agencies.  In addition, upon the sale of the Riviera
Beach Site, the Riviera Beach Escrow Account was transferred to USEPA, as
directed by the agencies.  The current balance in the Port Salerno
Escrow Account is approximately $58,000. At present, work at the Port
Salerno Site is being performed by USEPA.  Work at the Riviera Beach
Site is being performed by Honeywell, Inc. (“Honeywell”), pursuant to an
Administrative Order on Consent entered into between Honeywell and
USEPA.  The Company has been notified by FDEP that the successful
performance of remediation work in accordance with the Consent Final Judgment
standards by USEPA at the Port Salerno Site and by Honeywell at the Riviera
Beach Site will be construed by FDEP as discharging the Company’s remediation
obligations under the Consent Final Judgment.





There
remains a possibility that FDEP will determine at some time in the future that
the final remedy approved by USEPA and implemented at either, or both of, the
Port Salerno Site and Riviera Beach Site does not meet the State cleanup
requirements imposed by the Consent Final Judgment.  If such a final
determination is made by FDEP, there is a possibility that FDEP will require the
Company to implement additional remedial action at either, or both of, the Port
Salerno Site and Riviera Beach Site.





By letter
dated November 16, 2006, FDEP notified the Company that FDEP has unreimbursed
expenses associated with the Port Salerno Site and Riviera Beach Site of
$214,800.  FDEP further notified the Company that FDEP required the
Company to resume payments under the Consent Final Judgment to ensure that there
are adequate funds to cover FDEP’s unreimbursed expenses and the Company’s
residual liability under the Consent Final Judgment.  During a follow
up telephone conversation with the Company’s attorney, FDEP advised the Company
that FDEP will prepare a justification for the asserted unreimbursed
expenses.  Upon receipt of the cost reimbursement package, the Company
is required to transfer $55,000.00 from the Port Salerno Escrow Account to FDEP
as partial payment for FDEP’s unreimbursed expenses that are otherwise
recoverable under the Consent Final Judgment.  FDEP further stated,
during the telephone conversation, that FDEP will work with the Company to
establish a reduced payment schedule for the Company to resume under the Consent
Final Judgment based on an appropriate showing by the Company of financial
hardship.  The Company is currently awaiting receipt of FDEP’s cost
reimbursement package.  Upon receipt of that documentation, the
Company will be required to provide a recommendation to FDEP for resumption of
payments to FDEP under the Consent Final Judgment based on the Company’s present
ability to pay.




8





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)




On August
7, 2002, the Company received a Request for Information from the State of New
York Department of Environmental Conservation (“NYDEC”), seeking information on
whether the Company had disposed of certain wastes at the Clarkstown Landfill
Site located in the Town of Clarkstown, Rockland County, New York (The
Clarkstown Landfill Site”).  By letter dated August 29, 2002, the
Company responded to the Request for Information and advised NYDEC that the
Company’s former Tappan, New York facility had closed in the mid-1980’s, prior
to the initiation of the Company’s bankruptcy proceedings described
below.  The Company contends that, to the extent that NYDEC has a
claim against the Company as a result of the Company’s alleged disposal of
wastes at the Clarkstown Landfill Site prior to the closing of the Company’s
former Tappan facility in the mid-1980’s, the claim was discharged in bankruptcy
as a result of the Bankruptcy Court’s August 1993 Order.  At NYDEC’s
request, the Company entered into a revised Tolling Agreement with NYDEC on June
12, 2009, which provides for the tolling of applicable statutes of limitation
through the earlier of January 18, 2010, or the date the State institutes a suit
against the Company for any claims associated with the Clarkstown Landfill
Site.  It is not known at this time whether NYDEC will pursue a claim
against the Company in connection with the Clarkstown Landfill
Site.  As of the date of this filing, no such claim has been
made.





4.
            EARNINGS PER
      SHARE:





The
shares used in the computation of the Company’s basic and diluted earnings per
common share were as follows:





For the three months ended
                  August 31,
                
                
                For the six months ended
                  August 31,2009
                
                
                2008
                
                
                2009
                
                
                2008Weighted
      average common shares outstanding
                
                
                2,263,775
                
                
                
                2,262,904
                
                
                
                2,263,775
                
                
                
                2,262,904Dilutive
      effect of employee stock options
                
                
                187,306
                
                
                
                212,022
                
                
                
                189,208
                
                
                
                214,045Weighted
      average common shares outstanding, assuming dilution
                
                
                2,451,081
                
                
                
                2,474,926
                
                
                
                2,452,983
                
                
                
                2,476,949





Weighted
average common shares outstanding, assuming dilution, include the incremental
shares that would be issued upon the assumed exercise of stock
options.  For the three month periods ended August 31, 2009 and August
31, 2008 respectively, 13,500 and 13,800 shares underlying the Company's stock
options were excluded from the calculation of diluted earning per share because
the exercise prices of the stock options were greater than or equal to the
average price of the common shares, and therefore their inclusion would have
been anti-dilutive.





5.
            INVENTORIES:





As of
August 31, 2009, inventories consist of the following:


Gross
            
            
            Reserve
            
            
            NetRaw
      Materials
            
            $
            1,456,000
            
            
            $
            (319,000
            )
            
            $
            1,137,000Work-In-Process
            
            
            2,278,000
            
            
            
            (717,000
            )
            
            
            1,561,000Finished
      Goods
            
            
            466,000
            
            
            
            (458,000
            )
            
            
            8,000Totals
            
            $
            4,200,000
            
            
            $
            (1,494,000
            )
            
            $
            2,706,000





6.
            INCOME
      TAXES:





At August
31, 2009, the Company has net operating loss carryforwards of approximately
$16,582,000 that expire through 2023.  Such net operating losses are
available to offset future taxable income, if any.  As the utilization
of such net operating losses for tax purposes is not assured, the deferred tax
asset has been mostly reserved through the recording of a 100% valuation
allowance.  Should a cumulative change in the ownership of more than
50% occur within a three-year period, there could be an annual limitation on the
use of the net operating loss carryforward.




9





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





Total net
deferred taxes are comprised of the following at August 31, 2009:





Deferred
      tax assets:Loss
      carryforwards
                    
                    $
                    6,240,000Allowance
      for doubtful accounts
                    
                    
                    1,000Inventory
      allowance
                    
                    
                    550,000Depreciation
                    
                    
                    84,000Section
      263A capitalized costs
                    
                    
                    112,000Total
      deferred tax assets
                    
                    
                    6,987,000Valuation
      allowance
                    
                    
                    (6,987,000
                    )Total
      net deferred taxes
                    
                    $
                    0





The
change in the valuation allowance on deferred tax assets is due principally to
the utilization of the net operating loss for the year ending August 31,
2009.





A
reconciliation of the U.S. federal statutory tax rate to the Company’s effective
tax rate for fiscal year ended August 31, 2009 is as follows:


U.S.
      federal statutory rate
                  
                  
                  34.0
                  %Change
      in valuation allowance
                  
                  
                  (34.0
                  )Effective
      income tax rate
                  
                  
                  0.0
                  %





7.
            OTHER
      INCOME:





The
$19,000 of other income reflected in the condensed statements of income for the
quarter ended August 31, 2009 consists of $3,000 of interest income on
investment in treasury bills net of changes in market value plus 16,000 of
income tax benefit. The $25,000 of other income reflected in the condensed
statements of income for the quarter ended August 31, 2009 consists entirely of
interest income on investment in treasury bills net of changes in market
value.





8.
            ACCRUED
      EXPENSES:





As of
August 31, 2009, accrued expenses and other liabilities consisted of the
following:





Payroll
      and related employee benefits
                      
                      $
                      312,000Other
      liabilities
                      
                      
                      42,000$
                      354,000




10





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





9.
            EXPORT SALES AND MAJOR
      CUSTOMERS:





Revenues
from domestic and export sales to unaffiliated customers for the six months
ended August 31, 2009 are as follows:





Power
                                  
                                  
                                  
                                  
                                  
                                  Field
      Effect
                                  
                                  
                                  PowerGeographic
      Region
                                  
                                  Transistors
                                  
                                  
                                  Hybrids
                                  
                                  
                                  Transistors
                                  
                                  
                                  MOSFETS
                                  
                                  
                                  TotalsEurope
      and Australia
                                  
                                  $
                                  50,000
                                  
                                  
                                  $
                                  61,000
                                  
                                  
                                  $
                                  4,000
                                  
                                  
                                  $
                                  3,000
                                  
                                  
                                  $
                                  118,000Canada
      and Latin America
                                  
                                  
                                  11,000
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  24,000
                                  
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  36,000Far
      East and Middle East
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  0
                                  
                                  
                                  
                                  48,000
                                  
                                  
                                  
                                  48,000United
      States
                                  
                                  
                                  150,000
                                  
                                  
                                  
                                  960,000
                                  
                                  
                                  
                                  249,000
                                  
                                  
                                  
                                  377,000
                                  
                                  
                                  
                                  1,736,000Totals
                                  
                                  $
                                  211,000
                                  
                                  
                                  $
                                  1,021,000
                                  
                                  
                                  $
                                  277,000
                                  
                                  
                                  $
                                  429,000
                                  
                                  
                                  $
                                  1,938,000





Revenues
from domestic and export sales to unaffiliated customers for the six months
ended August 31, 2008 are as follows:





Power
                            
                            
                            
                            
                            
                            Field
      Effect
                            
                            
                            PowerGeographic
      Region
                            
                            Transistors
                            
                            
                            Hybrids
                            
                            
                            Transistors
                            
                            
                            MOSFETS
                            
                            
                            TotalsEurope
      and Australia
                            
                            $
                            32,000
                            
                            
                            $
                            184,000
                            
                            
                            $
                            10,000
                            
                            
                            $
                            0
                            
                            
                            $
                            226,000Canada
      and Latin America
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            5,000
                            
                            
                            
                            15,000
                            
                            
                            
                            20,000Far
      East and Middle East
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            3,000
                            
                            
                            
                            20,000
                            
                            
                            
                            23,000United
      States
                            
                            
                            297,000
                            
                            
                            
                            1,015,000
                            
                            
                            
                            155,000
                            
                            
                            
                            335,000
                            
                            
                            
                            1,802,000Totals
                            
                            $
                            329,000
                            
                            
                            $
                            1,199,000
                            
                            
                            $
                            173,000
                            
                            
                            $
                            370,000
                            
                            
                            $
                            2,071,000





Revenues
from domestic and export sales are attributed to global geographic region
according to the location of the customer’s primary manufacturing or operating
facilities.





Sales to
the Company's top two customers, Raytheon Company and BAE Systems, Inc.,
accounted for approximately 54% of net sales for the quarter ended August 31,
2009 as compared with 50% of the Company's net sales for the quarter ended
August 31, 2008.  Sales to Raytheon Company accounted for approximately 49%
of net sales for the quarter ended August 31, 2009 and 39% for the quarter ended
August 31, 2008.  Sales to the U.S. Government accounted for
approximately 4% of net sales for the quarter ended August 31, 2009 and 11% for
the quarter ended August 31, 2008.





10.
            MAJOR
      SUPPLIERS


Purchases
from the Company’s two top suppliers, Platronics Seals and Eastern States
Components, Inc., accounted for approximately 32% of total purchases of
production materials for the quarter ended August 31, 2009.  For the
quarter ended August 31, 2008, purchases from the Company’s two top suppliers,
Platronics Seals and Egide USA, Inc., accounted for approximately 19% of the
Company's total purchases of production materials.





11.
            SUBSEQUENT
      EVENTS





On
September 22, 2009, the Company received AS9100 Rev B certification as well as
re-certification for the ISO 9001:2000 quality management standard
certification.  Companies in the aerospace industry are increasingly
selecting suppliers on the basis of AS9100 certification. Achieving certified
status means that the Company may now obtain new business that may have been out
of reach in the past and expects to maintain ongoing relationships with its
existing aerospace customers long into the future.




11




Item
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Overview:




Solitron
Devices, Inc., a Delaware corporation (the “Company” or “Solitron”), designs,
develops, manufactures and markets solid-state semiconductor components and
related devices primarily for the military and aerospace markets.  The
Company manufactures a large variety of bipolar and metal oxide semiconductor
(“MOS”) power transistors, power and control hybrids, junction and power MOS
field effect transistors and other related products.  Most of the
Company’s products are custom made pursuant to contracts with customers whose
end products are sold to the U.S. Government.  Other products, such as
Joint Army/Navy transistors, diodes and Standard Military Drawings voltage
regulators, are sold as standard or catalog items.




The
following discussion and analysis of factors which have affected the Company's
financial position and operating results during the periods included in the
accompanying condensed financial statements should be read in conjunction with
the Financial Statements and the related Notes to Financial Statements and
Management’s Discussion and Analysis of Financial Condition and Results of
Operations included in the Company’s Annual Report on Form 10-K for the year
ended February 28, 2009 and the Condensed Financial Statements and the related
Notes to Condensed Financial Statements included in Item 1 of this Quarterly
Report on Form 10-Q.




Recent
Developments:




On
September 22, 2009, the Company received AS9100 Rev B certification as well as
re-certification for the ISO 9001:2000 quality management standard
certification.  Companies in the aerospace industry are increasingly
selecting suppliers on the basis of AS9100 certification. Achieving certified
status means that the Company may now obtain new business that may have been out
of reach in the past and expects to maintain ongoing relationships with its
existing aerospace customers long into the future.




Significant Accounting
Policies:




The
discussion and analysis of our financial condition and results of operations are
based upon the condensed financial statements included elsewhere in this
Quarterly Report on Form 10-Q which are prepared in accordance with accounting
principles generally accepted in the United States. Preparing financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates
and assumptions are affected by management’s application of accounting policies.
Our critical accounting policies include inventories, valuation of plant,
equipment, revenue recognition and accounting for income taxes. A discussion of
all of these critical accounting policies can be found in Note 1 of the “Notes
To Financial Statements” in Item 8 of our Annual Report on Form 10-K for
the fiscal year ended February 28, 2009.




Trends and
Uncertainties:




During
the three months ended August 31, 2009, the Company’s book-to-bill ratio was
approximately 1.05 as compared to approximately 1.44 for the three months ended
August 31, 2008, reflecting a decrease in the volume of orders
booked.  Generally, the intake of orders over the last twenty four
months has varied greatly as a result of the fluctuations in the general
economy, variations in defense spending on programs the Company supports, and
the timing of contract awards by the Department of Defense and subsequently by
its prime contractors, which is expected to continue over the next twelve to
twenty four months. The Company continues to identify means intended to reduce
its variable manufacturing costs to offset the potential impact of low volume of
orders to be shipped.  However, should order intake continue to fall
drastically below the level experienced in the last twenty four months, the
Company might be required to implement further cost cutting or other downsizing
measures to continue its business operations.




Inventories


Inventories
are stated at the lower of cost or market.  Cost is determined using
the “first-in, first-out” (FIFO) method.  The Company buys raw
material only to fill customer orders.  Excess raw material is created
only when a vendor imposes a minimum buy in excess of actual
requirements.  Such excess material will usually be utilized to meet
the requirements of the customer’s subsequent orders.  If excess
material is not utilized after two fiscal years it is fully
reserved.  Any inventory item once designated as reserved is carried
at zero value in all subsequent valuation activities.




12




The
Company’s inventory valuation policy is as follows:





Raw
      material/Work in process:
            All
      material purchased, processed and/or used in the last two fiscal years is
      valued at the lower of its acquisition cost or market.  All
      material not purchased/used in the last two fiscal years is fully reserved
      for.





Finished
      goods:
            All
      finished goods with firm orders for later delivery are valued (material
      and overhead) at the lower of cost or market.  All finished
      goods with no orders are fully
reserved.





Direct
      labor costs:
            Direct
      labor costs are allocated to finished goods and work in process inventory
      based on engineering estimates of the amount of man hours required from
      the different direct labor departments to bring each device to its
      particular level of completion.





Results of Operations-Three
months Ended August 31, 2009 Compared to Three months Ended August 31,
2008:





Net sales
for the three months ended August 31, 2009 decreased 6% to $1,938,000 as
compared to $2,071,000 for the three months ended August 31,
2008.  This decrease was primarily attributable to a lower level of
orders that were shipped in accordance with customer requirements.





Cost of
sales for the three months ended August 31, 2009 decreased to $1,316,000 from
$1,649,000 for the comparable period in 2008.  Expressed as a
percentage of sales, cost of sale decreased to 68% from 80% for the same period
in 2008.  This change was due primarily to a decrease in net sales
combined with a decrease in raw material costs.





Gross
profit for the three months ended August 31, 2009 increased to $622,000 from
$422,000 for the three months ended August 31, 2008.  Gross margins on
the Company’s sales increased to 32% for the three months ended August 31, 2009
in comparison to 20% for the three months ended August 31, 2008.  This
change was due mainly to a decrease in net sales combined with a decrease in raw
material costs.





For the
three months ended August 31, 2009, the Company shipped 32,221 units as compared
to 58,532 units shipped during the same period of the prior year.  It
should be noted that since the Company manufactures a wide variety of products
with an average sales price ranging from less than one dollar to several hundred
dollars, such periodic variations in the Company’s volume of units shipped
should not be regarded as a reliable indicator of the Company’s
performance.





The
Company’s backlog of open orders decreased 2% to $5,218,000 for the three months
ended August 31, 2009 when compared with the three months ended August 31, 2008.
Changes in backlog reflect changes in the intake of orders and in the delivery
requirements of customers.





The
Company has experienced a decrease of 31% to $2,040,000 in the level of bookings
during the three months ended August 31, 2009 when compared with the three
months ended August 31, 2008. The decline in bookings for the current quarter is
principally a result of a decline in defense spending, resulting in a decrease
in the monetary value of, and timing differences in the placement of contracts
by the Department of Defense and its prime contractors.





Selling,
general, and administrative expenses decreased to $241,000 for the three
months ended August 31, 2009 from $233,000 for the comparable period in
2008.  During the three months ended August 31, 2009, selling,
general, and administrative expenses as a percentage of net sales rose to 12% as
compared with 11% for the three months ended August 31, 2008.  The
percentage increase was due primarily to increases in professional and legal
fees.





Operating
income for the three months ended August 31, 2009 increased to $381,000 as
compared to $189,000 for the three months ended August 31, 2008. This increase
is due primarily to lower raw material costs.




13




The
Company recorded net other income of $19,000 for the three months ended August
31, 2009 as compared to $25,000 for the three months ended August 31,
2008.  Included in net other income was interest income on investment
in treasury bills net of changes in market value of $3,000 for the three months
ended August 31, 2009 plus $16,000 of income tax benefit. For the three months
ended August 31, 2008, the Company recorded $25,000 of interest income on
investment in treasury bills net of changes in market value.  The
decrease in interest income is due primarily to lower rates of return on
invested funds.




Net
income for the three months August 31, 2009 increased to $400,000 as
compared to $214,000 for the same period in 2008.  This increase is
due lower raw material costs.





Results of Operations-Six
Months Ended August 31, 2009 Compared to Six Months Ended August 31,
2008:





Net sales
for the six months ended August 31, 2009 decreased 11% to $3,758,000 as
compared to $4,240,000 for the six months ended August 31, 2008.  This
decrease was primarily attributable to a lower level of orders that were shipped
in accordance with customer requirements.




Cost of
sales for the six months ended August 31, 2009 decreased to $2,865,000 from
$3,272,000 for the comparable period in 2008.  Expressed as a
percentage of sales, cost of sales decreased to 76% from 77% for the same period
in 2008.  This change was due primarily to a decrease in net sales
combined with a decrease in raw material costs.




Gross
profit for the six months ended August 31, 2009 decreased to $893,000 from
$968,000 for the six months ended August 31, 2008. Gross margins on the
Company’s sales increased to 24% from 23% for the same period in
2008.  The change in dollar amount was primarily due to a decrease in
net sales combined with a decrease in raw material costs.




For the
six months ended August 31, 2009, the Company shipped 80,680 units as compared
to 188,109 units shipped during the same period of the prior year.  It
should be noted that since the Company manufactures a wide variety of products
with an average sales price ranging from less than one dollar to several hundred
dollars, such periodic variations in the Company’s volume of units shipped
should not be regarded as a reliable indicator of the Company’s
performance.




The
Company’s backlog of open orders decreased 17% to $5,218,000 for the six months
ended August 31, 2009 when compared with the six months ended August 31, 2008.
Changes in backlog resulted from changes in the intake of orders and in the
delivery dates required by customers.





The
Company has experienced a decrease of 34% in the level of bookings during the
six months ended August 31, 2009 when compared with the six months ended August
31, 2008. The decrease over the current six month period occurred principally as
a result of a shift in defense spending priorities, resulting in a decrease in
the monetary value of, and timing differences in the placement of contracts by
the Department of Defense and its prime contractors.





Selling,
general, and administrative expenses decreased to $512,000 for the six months
ended August 31, 2009 from $517,000 for the comparable period in
2008.  During the six months ended August 31, 2009, selling, general,
and administrative expenses as a percentage of net sales increased to
14% as compared to 12% for the six months ended August 31,
2008.  For the six months ended August 31, 2009, the Company has
experienced higher professional and legal fees offset by lower selling, general
and administrative labor costs.





Operating
income for the six months ended August 31, 2009 decreased to $381,000 from
$451,000 for the six months ended August 31, 2008. This decrease is due
primarily to a decrease in net sales.





The
Company recorded net other income of $20,000 for the six months ended August 31,
2009 as compared to net other income of $35,000 for the six months ended August
31, 2008.  Included in net other income was interest income of $11,000
for the six months ended August 31, 2009 as compared to $35,000 for the six
months ended August 31, 2008.  The decrease in interest income is due
primarily to lower interest rates on treasury bills. Also included in net other
income for the six months ended August 31, 2009 was $16,000 of income tax
benefit offset by $7,000 of expense from receivables adjustments.




Net
income for the six months ended August 31, 2009 decreased to $401,000 from
$486,000 for the same period in 2008.  This decrease was due primarily
to a lower net sales volume.




14




Liquidity and Capital
Resources:




Subject
to the following discussion, the Company expects its sole source of liquidity
over the next twelve months to be cash from operations.  However, due
to the level of current backlog and level of new order intake, the Company might
operate at a loss during the balance of the current fiscal year.  The
Company anticipates that its capital expenditures required to sustain operations
will be approximately $200,000 during the balance of the current fiscal year and
will be funded from operations.





Based
upon (i) management’s best information as to current national defense
priorities, future defense programs, as well as management’s expectations as to
future defense spending, (ii) the market trends signaling a decline in the level
of bookings, and an increase in the cost of raw materials and operations that
will result in the potential erosion of   profit levels and
continued price pressures due to more intense competition, and (iii) the
continued competition in the defense and aerospace market, the Company believes
that it will have sufficient cash on hand to satisfy its operating needs during
the current fiscal year.  However, due to the level of current backlog
and new order intake (due to the status of the general economy and the shift to
Commercial Off–The-Shelf (COTS) by the defense industry), the Company might
operate at a loss during  the balance of the current fiscal
year.  Thus, based on these factorsand at the current
level of bookings, costs of raw materials and services, profit margins and sales
levels, the Company may not generate sufficient cash to satisfy its operating
needs and its obligations to pre-bankruptcy creditors in accordance with the
Company’s plan of reorganization. Thus, the Company is in continuous
negotiations with all claim holders to reschedule these payments.  In
the event the Company is unable to restructure its obligations to pre-bankruptcy
creditors or the slowdown in the intake of new orders continue, the Company has
a contingency plan to further reduce its size and thereby reduce its cost of
operations within certain limitations.  Over the long-term, the
Company believes that if the volume and prices of product sales remain as
presently anticipated, the Company will generate sufficient cash from operations
to sustain operations and pay pre-bankruptcy creditor obligations at the current
reduced level of payments.  In the event that bookings in the
long-term continue to decline significantly below the level experienced during
the previous fiscal year, the Company may be required to implement cost-cutting
or other downsizing measures to continue its business
operations.  Such cost-cutting measures could inhibit future growth
prospects. In appropriate situations, the Company may seek strategic alliances,
joint ventures with others or acquisitions in order to maximize marketing
potential and utilization of existing resources and provide further
opportunities for growth.





The
Company reported net income of $401,000 and operating income of $381,000 for the
six months ended August 31, 2009.





At August
31, 2009, February 28, 2009 and August 31, 2008, the Company had cash of
approximately $129,000, $440,000 and $76,000, respectively.  Decreases
in accounts payable and in accrued expenses accounted for  $272,000 of
the reduction in cash over the six month period ended August 31,
2009.





At August
31, 2009, February 28, 2009 and August 31, 2008, the Company had investments in
treasury bills of approximately $5,325,000, $5,113,000 and $4,979,000,
respectively.





At August
31, 2009, the Company had working capital of $7,381,000 as compared with a
working capital at August 31, 2008 of $6,511,000.  At February 28,
2009, the Company had a working capital of $6,972,000.  The $393,000
increase for the six months ended August 31, 2009 was due mainly to a $294,000
decrease in current liabilities.





Off-Balance Sheet
Arrangements:





The
Company has not engaged in any off-balance sheet arrangements.





ITEM
3.           QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK





Not
applicable




15





FORWARD-LOOKING
STATEMENTS




Some of
the statements in this Quarterly Report on Form 10-Q are "forward-looking
statements," as that term is defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include statements regarding our
business, financial condition, results of operations, strategies or
prospects. You can identify forward-looking statements by the fact that these
statements do not relate strictly to historical or current matters. Rather,
forward-looking statements relate to anticipated or expected events, activities,
trends or results. Because forward-looking statements relate to matters that
have not yet occurred, these statements are inherently subject to risks and
uncertainties. Many factors could cause our actual activities or results to
differ materially from the activities and results anticipated in forward-looking
statements. These factors include those described under the caption "Risk
Factors" in our Annual Report on Form 10-K for the year ended February 28, 2009,
including those identified below. We do not undertake any obligation to update
forward-looking statements.




Some of
the factors that may impact our business, financial condition, results of
operations, strategies or prospects include:





·
            Our
      complex manufacturing processes may lower yields and reduce our
      revenues.


·
            Our
      business could be materially and adversely affected if we are unable to
      obtain qualified supplies of raw materials, parts and finished components
      on a timely basis and at a cost-effective
price.


·
            We
      are dependent on government contracts, which are subject to termination,
      price renegotiations and regulatory compliance, which can increase the
      cost of doing business and negatively impact our
  revenues.


·
            Changes
      in government policy or economic conditions could negatively impact our
      results.


·
            Our
      inventories may become obsolete and other assets may be subject to
      risks.


·
            Environmental
      regulations could require us to incur significant
  costs.


·
            Our
      business is highly competitive, and increased competition could reduce
      gross profit margins and the value of an investment in our
      Company.


·
            Downturns
      in the business cycle could reduce the revenues and profitability of our
      business.


·
            Our
      operating results may decrease due to the decline of profitability in the
      semiconductor industry.


·
            Uncertainty
      of current economic conditions, domestically and globally, could continue
      to affect demand for our products and negatively impact our
      business.


·
            Cost
      reduction efforts may be unsuccessful or insufficient to improve our
      profitability and may adversely impact
  productivity.


·
            We
      may not achieve the intended effects of our new business strategy, which
      could adversely impact our business, financial condition and results of
      operations.


·
            Our
      inability to introduce new products could result in decreased revenues and
      loss of market share to competitors; new technologies could also reduce
      the demand for our products.


·
            Loss
      of, or reduction of business from, substantial clients could hurt our
      business by reducing our revenues, profitability and cash
      flow.


·
            A
      shortage of three-inch silicon wafers could result in lost revenues due to
      an inability to build our products.


·
            The
      nature of our products exposes us to potentially significant product
      liability risk.


·
            We
      depend on the recruitment and retention of qualified personnel, and our
      failure to attract and retain such personnel could seriously harm our
      business.


·
            Provisions
      in our charter documents and rights agreement could make it more difficult
      to acquire our Company and may reduce the market price of our
      stock.


·
            Natural
      disasters, like hurricanes, or occurrences of other natural disasters
      whether in the United States or internationally may affect the markets in
      which our common stock trades, the markets in which we operate and our
      profitability.


·
            Natural
      disasters, like hurricanes, or occurrences of other natural disasters
      whether in the United States or internationally may affect the
      availability of raw materials which may adversely affect our
      profitability.


·
            Failure
      to protect our proprietary technologies or maintain the right to use
      certain technologies may negatively affect our ability to
      compete.


·
            The
      price of our common stock has fluctuated widely in the past and may
      fluctuate widely in the future.




16





ITEM
4.           CONTROLS AND
PROCEDURES





Our
Evaluation of Disclosure Controls and Procedures





The
Company carried out an evaluation, under the supervision and with the
participation of its management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e), and 15d-15(e)) as of the
end of the period covered by this Quarterly Report.  Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of the end of the
period covered by this Quarterly Report.





Changes
in Internal Control over Financial Reporting





Based on
an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
there has been no change in our internal control over financial reporting during
our last fiscal quarter identified in connection with that evaluation, that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.





PART II– OTHER
INFORMATION





ITEM
6.           EXHIBITS:





Exhibits





31
            Certification
      of  Chief Executive Officer and Chief Financial Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of
  2002.





32
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906  of the Sarbanes-Oxley Act of
  2002.




17





SIGNATURES





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





SOLITRON
      DEVICES, INC.Date:
      October 8, 2009/s/ Shevach SarafShevach
      SarafChairman,
      President,Chief
      Executive Officer,Treasurer
      andChief
      Financial Officer




18




EXHIBIT
INDEX




EXHIBIT NUMBER
                
                DESCRIPTION31
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.32
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002.


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