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
      ACTOF
      1934


For the
quarterly period ended November 30, 2008





or


 ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGEACT
      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 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 December 31, 2008 was 2,263,775.





SOLITRON
DEVICES, INC.





INDEX




Page No.PART
      1 - FINANCIAL INFORMATIONItem
                                        1.
                                        Financial
      Statements (unaudited)Condensed
      Balance Sheets
                                        
                                        3November
      30, 2008 and February 29, 2008Condensed
      Statements of Income
                                        
                                        4Three
      and Nine months ended November 30, 2008 and 2007Condensed
      Statements of Cash Flows
                                        
                                        5Nine
      months ended November 30, 2008 and 2007Notes
      to Condensed Financial Statements
                                        
                                        6-12Item
                                        2.
                                        Management’s
      Discussion and Analysis of Financial Condition andResults
      of Operations
                                        
                                        13-17Item
                                        3.
                                        Quantitative
      and Qualitative Disclosures about Market Risk
                                        
                                        17Item
                                        4.
                                        Controls
      and Procedures
                                        
                                        17-18PART II – OTHER INFORMATIONItem
                                        6.
                                        Exhibits
                                        
                                        18Signatures
                                        
                                        
                                        19




2


PART I – FINANCIAL
INFORMATION





ITEM
1.      FINANCIAL
STATEMENTS





SOLITRON DEVICES,
INC.


CONDENSED BALANCE
SHEETS


(Unaudited,
in thousands)





Nov 30,2008
                      
                      
                      Feb 29,2008ASSETSCURRENT
      ASSETS :Cash
                      
                      $
                      68
                      
                      
                      $
                      75Investment
      in treasury bills
                      
                      
                      5,012
                      
                      
                      
                      4,410Accounts
      receivable, less allowance for doubtful accounts of $7
                      
                      
                      1,097
                      
                      
                      
                      1,026Inventories,
      net
                      
                      
                      2,441
                      
                      
                      
                      2,985Prepaid
      expenses and other current assets
                      
                      
                      114
                      
                      
                      
                      104TOTAL
      CURRENT ASSETS
                      
                      
                      8,732
                      
                      
                      
                      8,600PROPERTY,
      PLANT AND EQUIPMENT, net
                      
                      
                      579
                      
                      
                      
                      562OTHER
      ASSETS
                      
                      
                      251
                      
                      
                      
                      245TOTAL
      ASSETS
                      
                      $
                      9,562
                      
                      
                      $
                      9,407LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable – Post-petition
                      
                      $
                      354
                      
                      
                      $
                      529Accounts
      payable – Pre-petition, current portion
                      
                      
                      1,093
                      
                      
                      
                      1,114Customer
      deposit
                      
                      
                      166
                      
                      
                      
                      387Accrued
      expenses and other current liabilities
                      
                      
                      504
                      
                      
                      
                      554TOTAL
      CURRENT LIABILITIES
                      
                      
                      2,117
                      
                      
                      
                      2,584LONG
      TERM LIABILITIES, net of current portion
                      
                      
                      345
                      
                      
                      
                      345TOTAL
      LIABILITIES
                      
                      
                      2,462
                      
                      
                      
                      2,929COMMITMENTS
      & 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
                      
                      
                      4,344
                      
                      
                      
                      3,722TOTAL
      STOCKHOLDERS’ EQUITY
                      
                      
                      7,100
                      
                      
                      
                      6,478TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                      
                      $
                      9,562
                      
                      
                      $
                      9,407





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


3




SOLITRON DEVICES,
INC.


CONDENSED STATEMENTS OF
INCOME


THREE AND NINE MONTHS ENDED
NOVEMBER 30,


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





Three Months
                    
                    
                    Nine Months2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007NET
      SALES
                    
                    $
                    2,104
                    
                    
                    $
                    2,037
                    
                    
                    $
                    6,344
                    
                    
                    $
                    5,627Cost
      of Sales
                    
                    
                    1,638
                    
                    
                    
                    1,536
                    
                    
                    
                    4,910
                    
                    
                    
                    4,457Gross
      Profit
                    
                    
                    466
                    
                    
                    
                    501
                    
                    
                    
                    1,434
                    
                    
                    
                    1,170Selling,
      General and Administrative Expenses
                    
                    
                    357
                    
                    
                    
                    225
                    
                    
                    
                    874
                    
                    
                    
                    730Operating
      Income
                    
                    
                    109
                    
                    
                    
                    276
                    
                    
                    
                    560
                    
                    
                    
                    440OTHER
      INCOMEOther
      Income, Net
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1Interest
      Income
                    
                    
                    27
                    
                    
                    
                    39
                    
                    
                    
                    62
                    
                    
                    
                    129Interest
      Expense
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Other
      Income, Net
                    
                    
                    27
                    
                    
                    
                    39
                    
                    
                    
                    62
                    
                    
                    
                    130Net
      Income
                    
                    $
                    136
                    
                    
                    $
                    315
                    
                    
                    $
                    622
                    
                    
                    $
                    570INCOME
      PER SHARE     : Basic
                    
                    $
                    .06
                    
                    
                    $
                    .14
                    
                    
                    $
                    .27
                    
                    
                    $
                    .25:
      Diluted
                    
                    $
                    .05
                    
                    
                    $
                    .13
                    
                    
                    $
                    .25
                    
                    
                    $
                    .23WEIGHTED
      AVERAGESHARES
      OUTSTANDING  : Basic
                    
                    
                    2,263,427
                    
                    
                    
                    2,263,040
                    
                    
                    
                    2,263,078
                    
                    
                    
                    2,263,044:
      Diluted
                    
                    
                    2,470,288
                    
                    
                    
                    2,464,582
                    
                    
                    
                    2,474,728
                    
                    
                    
                    2,449,124





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


4




SOLITRON DEVICES,
INC.


CONDENSED STATEMENTS OF CASH
FLOWS


NINE MONTHS ENDED NOVEMBER
30,


(Unaudited,
in thousands)





2008
                          
                          
                          2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Income
                          
                          $
                          622
                          
                          
                          $
                          570Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation and amortization
                          
                          
                          147
                          
                          
                          
                          136Changes
      in operating assets and liabilities:(Increase)
      Decrease in:Investment
      in treasury bills
                          
                          
                          (602
                          )
                          
                          
                          (902
                          )Accounts
      receivable
                          
                          
                          (71
                          )
                          
                          
                          (115
                          )Inventories
                          
                          
                          544
                          
                          
                          
                          (170
                          )Prepaid
      expenses and other current assets
                          
                          
                          (10
                          )
                          
                          
                          15Other
      non-current assets
                          
                          
                          (6
                          )
                          
                          
                          (203
                          )Increase
      (Decrease) in:Accounts
      payable – Post-petition
                          
                          
                          (175
                          )
                          
                          
                          167Accounts
      payable – Pre-petition
                          
                          
                          (21
                          )
                          
                          
                          (21
                          )Customer
      deposit
                          
                          
                          (221
                          )
                          
                          
                          -Accrued
      expenses and other current liabilities
                          
                          
                          (50
                          )
                          
                          
                          367Other
      non-current liabilities
                          
                          
                          -
                          
                          
                          
                          187NET
      CASH PROVIDED BY OPERATING ACTIVITIES
                          
                          
                          157
                          
                          
                          
                          31CASH
      FLOW FROM INVESTING ACTIVITIES:Purchases
      of property, plant and equipment
                          
                          
                          (164
                          )
                          
                          
                          (82
                          )NET
      CASH (USED IN) INVESTING ACTIVITIES
                          
                          
                          (164
                          )
                          
                          
                          (82
                          )CASH
      FLOW FROM FINANCING ACTIVITIES:Exercise
      of stock options
                          
                          
                          -
                          
                          
                          
                          -NET
      CASH FROM FINANCING ACTIVITIES
                          
                          
                          -
                          
                          
                          
                          -NET
      INCREASE/(DECREASE) IN CASH
                          
                          
                          (7
                          )
                          
                          
                          (51
                          )CASH
      AT THE BEGINNING OF PERIOD
                          
                          
                          75
                          
                          
                          
                          163CASH
      AT THE END OF PERIOD
                          
                          $
                          68
                          
                          
                          $
                          112





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 29, 2008.




The
results of operations for the nine month period ended November 30, 2008 are not
necessarily indicative of the results to be expected for the entire year ending
February 28, 2009.




SIGNIFICANT ACCOUNTING
POLICIES:




Cash


Cash
includes demand deposits and money market accounts.  As of November
30, 2008, the Company had $68,000 in cash deposits which is $182,000 under the
$250,000 limit for FDIC insurance.





Investment in Treasury
Bills


During
the first quarter of this 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.  The corresponding amount of cash and cash
equivalents shown on the prior period balance sheet and statement of cash flows
has been reclassified to reflect this change in accounting principle (see
footnote 11).





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 $7,000 as of
November 30, 2008.  The Company has not had a bad debt in the past two
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.




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 November 30, 2008 and November 30, 2007 in accordance
with SFAS No. 148.





During
the quarters ended November 30, 2008 and November 30, 2007, 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, and fiscal year 2008.  The Company accrued $50,000 for its
minimum remaining obligations under the Settlement Agreement for fiscal years
2009-2013.





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
Solitron 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
October 7, 2008, which provides for the tolling of applicable statutes of
limitation through the earlier of June 26, 2009, 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 November
      30,
                
                
                For the nine months ended November
      30,2008
                
                
                2007
                
                
                2008
                
                
                2007Weighted
      average common shares outstanding
                
                
                2,263,427
                
                
                
                2,263,040
                
                
                
                2,263,078
                
                
                
                2,263,044Dilutive
      effect of employee stock options
                
                
                206,861
                
                
                
                201,542
                
                
                
                211,650
                
                
                
                186,080Weighted
      average common shares outstanding, assuming dilution
                
                
                2,470,288
                
                
                
                2,464,582
                
                
                
                2,474,728
                
                
                
                2,449,124





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 November 30, 2008 and
November 30, 2007, 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
November 30, 2008, inventories consist of the following:





Gross
                      
                      
                      Reserve
                      
                      
                      NetRaw
      Materials
                      
                      $
                      1,312,000
                      
                      
                      $
                      (321,000
                      )
                      
                      $
                      991,000Work-In-Process
                      
                      
                      1,989,000
                      
                      
                      
                      (552,000
                      )
                      
                      
                      1,437,000Finished
      Goods
                      
                      
                      444,000
                      
                      
                      
                      (431,000
                      )
                      
                      
                      13,000Totals
                      
                      $
                      3,745,000
                      
                      
                      $
                      (1,304,000
                      )
                      
                      $
                      2,441,000





9





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





6.           INCOME
TAXES:





At
November 30, 2008, the Company had net operating loss carryforwards of
approximately $12,598,000 that expire through 2022.  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 90% 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.





Total net
deferred taxes are comprised of the following at November 30, 2008:




Deferred
      tax assets:Loss
      carryforwards
                    
                    $
                    4,542,000Allowance
      for doubtful accounts
                    
                    
                    3,000Inventory
      allowance
                    
                    
                    3,565,000Accrued
      bonuses
                    
                    
                    77,000Section
      263A capitalized costs
                    
                    
                    1,111,000Total
      deferred tax assets
                    
                    
                    9,298,000Valuation
      allowance
                    
                    
                    (8,833,000
                    )Net
      deferred tax assets
                    
                    
                    465,000Deferred
      tax liabilities:Depreciation
                    
                    
                    278,000Total
      deferred tax liabilities
                    
                    
                    278,000Total
      net deferred taxes
                    
                    $
                    187,000





The
change in the valuation allowance on deferred tax assets is due principally to
the utilization of the net operating loss for the quarter ending November 30,
2008.





A
reconciliation of the provision for income taxes to the amount calculated using
the statutory federal rate (34%) for the quarter ending November 30, 2008 is as
follows:





2008
                                        
                                        
                                        2007Income
      Tax Provision atU.S.
      Statutory Rate
                                        
                                        $
                                        272,000
                                        
                                        
                                        $
                                        241,000State
      Taxes, Net of Federal Benefit
                                        
                                        
                                        29,000
                                        
                                        
                                        
                                        39,000Alternative
      Minimum Taxes
                                        
                                        
                                        -
                                        
                                        
                                        
                                        8,000Less:
      Prior Year Overaccrual
                                        
                                        
                                        
                                        
                                        
                                        
                                        (8,000
                                        )Utilization
      of Net Operating Loss Carryforward
                                        
                                        
                                        (301,000
                                        )
                                        
                                        
                                        (280,000
                                        )Income
      Tax Provision
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -




The
Company paid $13,000 in federal and state alternative minimum taxes for fiscal
year 2008 and has accrued $11,000 in federal and state alternative minimum taxes
for fiscal year 2009.





7.           OTHER
INCOME:





The
$27,000 of other income reflected in the condensed statements of income for the
quarter ended November 30, 2008 consists entirely of interest income on
investment in treasury bills net of changes in market value.  For the
fiscal quarter ended November 30, 2007, the Company earned $39,000 of other
income also consisting entirely of interest income on investment in treasury
bills net of changes in market value.




10




SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





8.           ACCRUED
EXPENSES:





As of
November 30, 2008 accrued expenses and other liabilities consisted of the
following:





Payroll
      and related employee benefits
                  
                  $
                  467,000Other
      liabilities
                  
                  
                  37,000$
                  504,000





9.           EXPORT SALES AND MAJOR
CUSTOMERS:





Revenues
from domestic and export sales to unaffiliated customers for the nine months
ended November 30, 2008 are as follows:





Geographic Region
                    
                    Power
                      Transistors
                    
                    
                    Hybrids
                    
                    
                    Field Effect
                      Transistors
                    
                    
                    Power
                      MOSFETS
                    
                    
                    TotalsEurope
      and Australia
                    
                    $
                    0
                    
                    
                    $
                    339,000
                    
                    
                    $
                    22,000
                    
                    
                    $
                    0
                    
                    
                    $
                    361,000Canada
      and Latin America
                    
                    
                    9,000
                    
                    
                    
                    0
                    
                    
                    
                    0
                    
                    
                    
                    7,000
                    
                    
                    
                    16,000Far
      East and Middle East
                    
                    
                    0
                    
                    
                    
                    0
                    
                    
                    
                    0
                    
                    
                    
                    9,000
                    
                    
                    
                    9,000United
      States
                    
                    
                    260,000
                    
                    
                    
                    840,000
                    
                    
                    
                    159,000
                    
                    
                    
                    459,000
                    
                    
                    
                    1,718,000Totals
                    
                    $
                    269,000
                    
                    
                    $
                    1,179,000
                    
                    
                    $
                    181,000
                    
                    
                    $
                    475,000
                    
                    
                    $
                    2,104,000





Revenues
from domestic and export sales to unaffiliated customers for the nine months
ended November 30, 2007 are as follows:





Geographic Region
                    
                    Power
                      Transistors
                    
                    
                    Hybrids
                    
                    
                    Field Effect
                      Transistors
                    
                    
                    Power
                      MOSFETS
                    
                    
                    TotalsEurope
      and Australia
                    
                    $
                    7,000
                    
                    
                    $
                    24,000
                    
                    
                    $
                    1,000
                    
                    
                    $
                    0
                    
                    
                    $
                    32,000Canada
      and Latin America
                    
                    
                    16,000
                    
                    
                    
                    0
                    
                    
                    
                    0
                    
                    
                    
                    5,000
                    
                    
                    
                    21,000Far
      East and Middle East
                    
                    
                    7,000
                    
                    
                    
                    0
                    
                    
                    
                    0
                    
                    
                    
                    26,000
                    
                    
                    
                    33,000United
      States
                    
                    
                    328,000
                    
                    
                    
                    996,000
                    
                    
                    
                    285,000
                    
                    
                    
                    342,000
                    
                    
                    
                    1,951,000Totals
                    
                    $
                    358,000
                    
                    
                    $
                    1,020,000
                    
                    
                    $
                    286,000
                    
                    
                    $
                    373,000
                    
                    
                    $
                    2,037,000





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 Australia LTD,
accounted for approximately 53% of net sales for the quarter ended November 30,
2008. Sales to Raytheon Company accounted for approximately 36% of net sales for
the quarter and BAE Systems Australia LTD accounted for approximately 17% of net
sales for the quarter. For the quarter ended November 30, 2007, sales to the
Company's top two customers, Raytheon Company and the U.S. Government, accounted
for approximately 43% of net sales. Sales to Raytheon Company accounted for
approximately 32% of net sales for such quarter and sales to the U.S. Government
accounted for approximately 11% of net sales for such
quarter.





10.           MAJOR
SUPPLIERS:





Purchases
from the Company’s two top suppliers, Platronics Seals and Stellar Industries,
Inc., accounted for approximately 20% of total purchases of production materials
for the quarter ended November 30, 2008.  For the quarter ended
November 30, 2007, purchases from the Company’s two top suppliers, CPS
Technologies, Inc. and Egide USA, Inc., accounted for approximately 18% of the
Company's total purchases of production materials.


11





SOLITRON
DEVICES, INC.


NOTES TO CONDENSED FINANCIAL
STATEMENTS


(Unaudited)





11.         CHANGE IN ACCOUNTING
PRINCIPLE:





During
the first quarter of this fiscal year the Company’s management decided to remove
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.  The Company has reclassified its February 29, 2008
balance sheet to reflect this change in accounting principle.  The
reclassification is as follows:





Before
change:





Cash
      and cash equivalents
                  
                  $
                  4,485,000





After
change:





Cash
                  
                  $
                  75,000Investment
      in treasury bills
                  
                  
                  4,410,000





As of
November 30, 2008:





Cash
                  
                  $
                  68,000Investment
      in treasury bills
                  
                  
                  5,012,000





Income
from Treasury bill investments will include both accrued interest income and
differences between accrued surrender value and market value.


12





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 29, 2008 and the Condensed Financial Statements and the related
Notes to the Condensed Financial Statements included in Item 1 of this Quarterly
Report on Form 10-Q.




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 29, 2008.




Trends and
Uncertainties:




During
the three months ended November 30, 2008 the Company’s book-to-bill ratio was
approximately 1.43 as compared to approximately 1.40 for the three months ended
November 30, 2007, reflecting a slight increase in the volume of orders
booked.  The Company does not believe that the quarter-to-quarter
change in the book-to-bill ratio indicates a specific trend in the demand for
the Company’s products.  Generally, the intake of orders varies
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 fall drastically below the
level experienced in the last twenty four months, the Company might be required
to implement 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.


13




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 November 30, 2008 Compared to Three Months Ended November 30,
2007:





Net sales
for the three months ended November 30, 2008 increased 3% to $2,104,000 as
compared to $2,037,000 for the three months ended November 30,
2007.  This increase was primarily attributable to a higher level of
orders that were shipped in accordance with customer requirements.





Cost of
sales for the three months ended November 30, 2008 increased to $1,638,000 from
$1,536,000 for the comparable period in 2007.  Expressed as a
percentage of sales, cost of sales increased to 78% from 75% for the same period
in 2007.  This change was due primarily to increases in materials,
direct and indirect labor wages, and manufacturing overhead
expenses.





Gross
profit for the three months ended November 30, 2008 decreased to $466,000 from
$501,000 for the three months ended November 30, 2007.  Accordingly,
gross margins on the Company’s sales decreased to 22% for the three months ended
November 30, 2008 in comparison to 25% for the three months ended November 30,
2007.  This change was due mainly to increases in materials, direct
and indirect labor wages, and manufacturing overhead expenses as discussed
above.





For the
three months ended November 30, 2008, the Company shipped 56,580 units as
compared to 266,527 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 increased 14%, from $5,891,000 to $6,705,000,
for the three months ended November 30, 2008, which was equal to the increase of
14% for the three months ended November 30, 2007.  Changes in backlog
reflect changes in the intake of orders and in the delivery requirements of
customers.





The
Company has experienced an increase of 6% in the level of bookings during the
quarter ended November 30, 2008 as compared to a 264% increase in bookings for
the same period in 2007 principally as a result of a shift in defense spending
priorities, resulting in an increase 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 increased to $357,000 for the three months
ended November 30, 2008 from $225,000 for the comparable period in
2007.  During the three months ended November 30, 2008, selling,
general, and administrative expenses as a percentage of net sales increased to
17% as compared with 11% for the three months ended November 30,
2007.  The percentage increase was due primarily to increases in sales
wages and sales travel and to increases in general and administrative accrued
wages.





Operating
income for the three months ended November 30, 2008 decreased to $109,000 as
compared to $276,000 for the three months ended November 30, 2007. This decrease
is due mainly to increases in materials, direct and indirect labor wages,
manufacturing overhead expenses, sales wages and sales travel, and to increases
in general and administrative accrued wages as mentioned above.


14





The
Company recorded net other income of $27,000 for the three months ended November
30, 2008 as compared to $39,000 for the three months ended November 30,
2007.  Included in net other income was interest income on investment
in treasury bills net of changes in market value of $27,000 for the three months
ended November 30, 2008 as compared to $39,000 for the three months ended
November 30, 2007.  The decrease in interest income is due primarily
to lower interest rates on treasury bills.




Net
income for the three months ended November 30, 2008 decreased to $136,000 as
compared to $315,000 for the same period in 2007.  This decrease is
due primarily to increases in materials, direct and indirect labor wages,
manufacturing overhead expenses, sales wages and sales travel, and to increases
in general and administrative accrued wages as mentioned above.





Results of Operations-Nine
Months Ended November 30, 2008 Compared to Nine Months Ended November 30,
2007:




Net sales
for the nine months ended November 30, 2008 increased 13% to $6,344,000 as
compared to $5,627,000 for the nine months ended November 30,
2007.  This increase was primarily attributable to a higher level of
orders that were shipped in accordance with customer requirements.




Cost of
sales for the nine months ended November 30, 2008 increased to $4,910,000 from
$4,457,000 for the comparable period in 2007.  Expressed as a
percentage of sales, cost of sales decreased to 77% from 79% for the same period
in 2007.  The change was due primarily to decreases in direct and
indirect labor wages and manufacturing overhead expenses offset by an increase
in  materials.




Gross
profit for the nine months ended November 30, 2008 increased to $1,434,000 from
$1,170,000 for the nine months ended November 30, 2007. Accordingly, gross
margins on the Company’s sales increased to approximately 23% for the nine
months ended November 30, 2008 in comparison to approximately 21% for the nine
months ended November 30, 2007.  This change was primarily due to an
increase in sales and to decreases in direct and indirect labor wages and
manufacturing overhead expenses offset by an increase in materials as discussed
above.





For the
nine months ended November 30, 2008, the Company shipped 244,689 units as
compared to 671,663 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 increased 15%, from $5,826,000 to $6,705,000
for the nine months ended November 30, 2008, as compared to an increase of
approximately 50% for the nine months ended November 30,
2007.  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 in the level of bookings of approximately 8%
for the nine months ended November 30, 2008 as compared to an increase of 81%
for the same period for the previous year 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 increased to $874,000 for the nine months
ended November 30, 2008 from $730,000 for the comparable period in
2007.  During the nine months ended November 30, 2008, selling,
general, and administrative expenses as a percentage of net sales increased to
14% as compared to 13% for the nine months ended November 30,
2007.  The increase was due primarily to increases in sales wages and
sales travel, and to increases in general and administrative accrued
wages.





Operating
income for the nine months ended November 30, 2008 increased to $560,000 from
$440,000 for the nine months ended November 30, 2007. This increase is due
mainly to an increase in sales, and a decrease in cost of sales
percentage.





The
Company recorded net other income of $62,000 for the nine months ended November
30, 2008 as compared to net other income of $130,000 for the nine months ended
November 30, 2007.  Included in net other income was interest income
of $62,000 for the nine months ended November 30, 2008 as compared to $129,000
for the nine months ended November 30, 2007.  The decrease in interest
income is due primarily to lower interest rates on treasury
bills.


15




Net
income for the nine months ended November 30, 2008 increased to $622,000 from
$570,000 for the same period in 2007.  This increase was due primarily
to a higher sales volume and lower cost of sales percentage as discussed
above.




Liquidity and Capital
Resources:




The
Company’s sole source of cash is revenue generated by ongoing
operations.  The Company’s liquidity might be adversely affected by
decreased cash receipts due to anticipated lower level of sales volume over the
next twelve to twenty-four months due to customers’ delivery
requirements.  The Company’s liquidity is not expected to improve
until the Company’s revenues increase to a level consistently above its
breakeven point.





Furthermore,
the Company’s liquidity continues to be adversely affected by the Company’s 1993
bankruptcy petition obligations and the Company’s inability to obtain additional
working capital through the sale of debt or equity securities.  For a
more complete discussion of the Company’s bankruptcy obligations, see “Business
– Bankruptcy Proceedings” in the Company’s Annual Report on Form 10-K filed for
the period ended February 29, 2008.





The
Company is required to make quarterly payments to holders of unsecured claims
until they receive 35 percent (35%) of their pre-petition
claims.  However, due to negotiations between the parties, the
unsecured creditors agreed to a deferment of this payment and the Company agreed
to make payments until its obligations are fulfilled.  The unsecured
creditors do not object to the reduced level of quarterly payments. As of
November 30, 2008, the Company has paid approximately $755,000 to its unsecured
creditors.  The Company’s remaining obligation is approximately
$1,093,000 to holders of allowed unsecured claims to be paid in quarterly
installments.





The
Company reported net income of $622,000 and operating income of $560,000 for the
nine months ended November 30, 2008.





At
November 30, 2008, February 29, 2008 and November 30, 2007, the Company had cash
of approximately $68,000, $75,000 and $112,000,
respectively.  Decreases in accounts receivable and inventories
contributed $473,000 to the last nine months’ cash flow generated by ongoing
operations.





At
November 30, 2008, February 29, 2008 and November 30, 2007, the Company had
investments in treasury bills with a market value of approximately $5,012,000,
$4,410,000 and $4,278,000, respectively.





At
November 30, 2008, the Company had working capital of $6,615,000 as compared
with a working capital at November 30, 2007 of $5,787,000.  At
February 29, 2008, the Company had a working capital of
$6,016,000.  The $599,000 increase for the nine months ended November
30, 2008 was due mainly to a $602,000 increase in investment in treasury
bills.





Off-Balance Sheet
Arrangements:





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





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 29, 2008,
including those identified below. We do not undertake any obligation to update
forward-looking statements.


16




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 and parts 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.


·
            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.




ITEM
      3.
            QUANTITATIVE AND
      QUALITATIVE DISCLOSURE ABOUT MARKET
RISK





Not
applicable





ITEM4.
            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.


17





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





ITEM6.
            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.


18





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:
      January 7, 2009/s/ Shevach SarafShevach
      SarafChairman,
      President,Chief
      Executive Officer,Treasurer
      andChief
      Financial
Officer


19




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.


20