----

| Delaware                                                            |   | 11-3191686                                   |
|---------------------------------------------------------------------|--------|----------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification Number) |

| 37-16 23rd Street, Long Island City, New      York |   | 11101           |
|----------------------------------------------------|--------|-----------------|
| (Address      of principal executive offices)      |   | (Zip      Code) |

| Large Accelerated      Filer   ̈ | Accelerated      Filer   ̈ | Non-Accelerated      Filer   ̈ | Smaller Reporting Company x |
|------------------------------------------------|------------------------------------------|----------------------------------------------|-----------------------------|

|   |                              |   | Outstanding      at |   |
|--------|-----------------------------------|--------|---------------------|--------|
|   | Class                             |   | August 9, 2010      |   |
|   | Common      stock, $.01 par value |   | 6,337,725           |   |

----

|                   |                                                                                                                            |     |
|------------------------|---------------------------------------------------------------------------------------------------------------------------------|----------|
|                   | TABLE      OF CONTENTS                                                                                                          |
|                   |                                                                                                                            |     |
|                   |                                                                                                                            | Page No. |
| PART      I            | FINANCIAL      INFORMATION                                                                                                      |     |
|                   |                                                                                                                            |     |
| Item      1.           | Financial      Statements                                                                                                       |     |
|                   |                                                                                                                            |     |
|                   | Consolidated      Balance Sheets – June 30, 2010 (unaudited) and December 31,      2009                                   | 3        |
|                   |                                                                                                                            |     |
|                   | Consolidated      Statements of Income – Three and six months ended June 30, 2010 and      2009 (unaudited)               | 4        |
|                   |                                                                                                                            |     |
|                   | Consolidated      Statements of Comprehensive Income – Three and six months ended      June 30, 2010 and 2009 (unaudited) | 5        |
|                   |                                                                                                                            |     |
|                   | Consolidated      Statement of Stockholders’ Equity – Six months ended June 30, 2010      (unaudited)               | 6        |
|                   |                                                                                                                            |     |
|                   | Consolidated      Statements of Cash Flows– Six months ended June 30, 2010 and 2009      (unaudited)                      | 7        |
|                   |                                                                                                                            |     |
|                   | Notes      to Consolidated Financial Statements–                                                                          | 8        |
|                   |                                                                                                                            |     |
| Item      2.           | Management's      Discussion and Analysis of Financial Condition and Results of      Operations                                 | 14       |
|                   |                                                                                                                            |     |
| Item      3.           | Quantitative      and Qualitative Disclosuresabout Market Risk                                                                  | 19       |
|                   |                                                                                                                            |     |
| Item      4.           | Controls      and Procedures                                                                                                    | 19       |
|                   |                                                                                                                            |     |
| PART      II           | OTHER      INFORMATION                                                                                                          |     |
|                   |                                                                                                                            |     |
| Item      1.           | Legal      Proceedings                                                                                                          | 20       |
| Item      1A.          | Risk      Factors                                                                                                               | 20       |
| Item      2.           | Unregistered      Sales of Equity Securities and Use of Proceeds                                                                | 20       |
| Item      3.           | Defaults      Upon Senior Securities                                                                                            | 20       |
| Item      4.           | [Removed      and Reserved]                                                                                                     | 20       |
| Item      5.           | Other      Information                                                                                                          | 20       |
| Item      6.           | Exhibits                                                                                                                        | 20       |
|                   |                                                                                                                            |     |
| SIGNATURE              | 21                                                                                                                              |
| INDEX      TO EXHIBITS | 22                                                                                                                              |

----

|                                                                                                                                                                                                                                                                       |   | June 30, 2010 |         |   | December 31, 2009         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------------|--------|---------------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                     |   | (unaudited)   |         |   | (as      adjusted Note 4) |   |
| Current      assets:                                                                                                                                                                                                                                                       |   |          |         |   |                      |   |
|    Cash      and cash equivalents                                                                                                                                                                                                                           |   | $             | 13,528       |   |                      | $      | 13,738 |   |
|    Marketable      securities                                                                                                                                                                                                                               |   |          | 2,033        |   |                      |   | 2,604 |   |
|    Accounts      receivable                                                                                                                                                                                                                                 |   |          | 21,024       |   |                      |   | 12,338 |   |
|    Retainage      receivable                                                                                                                                                                                                                                |   |          | 7,295        |   |                      |   | 6,637 |   |
|    Costs      and estimated earnings in excess of billings on uncompleted      contracts                                                                                                                                                                    |   |          | 2,896        |   |                      |   | 1,979 |   |
|    Prepaid      expenses and other receivables                                                                                                                                                                                                              |   |          | 592          |   |                      |   | 265 |   |
|    Advances      to and earnings from Joint Venture                                                                                                                                                                                                         |   |          | 37           |   |                      |   | 17 |   |
|    Deferred      income taxes                                                                                                                                                                                                                               |   |          | 164          |   |                      |   | 141 |   |
|       Total      current assets                                                                                                                                                                                                              |   |          | 47,569       |   |                      |   | 37,719 |   |
| Property      and equipment, net of accumulated depreciation and amortization of $2,355      and $2,341 at 6/30/10 and 12/31/09, respectively                                                                                                                              |   |          | 2,694        |   |                      |   | 2,692 |   |
| Deferred      income taxes and other                                                                                                                                                                                                                                       |   |          |  120    |   |                      |   |  126 |   |
|    Total    assets                                                                                                                                                                                                                                          |   | $             | 50,383       |   |                      | $      | 40,537 |   |
|                                                                                                                                                                                                                                                                       |   |          |         |   |                      |   |   |   |
| LIABILITIES AND      STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                  |   |          |         |   |                      |   |   |   |
| Current      liabilities:                                                                                                                                                                                                                                                  |   |          |         |   |                      |   |   |   |
|    Current      portion of mortgage payable                                                                                                                                                                                                                 |   | $             | 58           |   |                      | $      | 58 |   |
|    Accounts      payable                                                                                                                                                                                                                                    |   |          | 17,523       |   |                      |   | 12,005 |   |
|    Retainage      payable                                                                                                                                                                                                                                   |   |          | 4,306        |   |                      |   | 3,608 |   |
|    Accrued      payroll and benefits                                                                                                                                                                                                                        |   |          | 1,036        |   |                      |   | 835 |   |
|    Accrued      expenses                                                                                                                                                                                                                                    |   |          | 387          |   |                      |   | 220 |   |
|    Billings      in excess of costs and estimated earnings on uncompleted      contracts                                                                                                                                                                    |   |          | 4,590        |   |                      |   | 1,767 |   |
|    Income      taxes payable                                                                                                                                                                                                                                |   |          |  232    |   |                      |   |  139 |   |
| Total      current liabilities                                                                                                                                                                                                                                             |   |          | 28,132       |   |                      |   | 18,632 |   |
| Mortgage      payable, net of current portion                                                                                                                                                                                                                              |   |          |  1,023  |   |                      |   |  1,054 |   |
|         Total      liabilities                                                                                                                                                                                                     |   |          |  29,155 |   |                      |   |  19,686 |   |
|                                                                                                                                                                                                                                                                       |   |          |         |   |                      |   |   |   |
| Commitments      and contingencies (Note 8)                                                                                                                                                                                                                                |   |          |         |   |                      |   |   |   |
| Stockholders'      equity:                                                                                                                                                                                                                                                 |   |          |         |   |                      |   |   |   |
|    Preferred      stock, $.01 par value, 1,000,000 shares authorized, no shares issued and      outstanding                                                                                                                                                 |   |          | -            |   |                      |   | - |   |
|    Common      stock, $.01 par value, 25,000,000 shares authorized; 6,378,063 and      6,287,825 shares issued at 6/30/10 and 12/31/09, respectively;      6,325,363  and 6,235,125 shares outstanding at 6/30/10 and      12/31/09, respectively |   |          | 64           |   |                      |   | 63 |   |
|    Additional      paid-in capital                                                                                                                                                                                                                          |   |          | 13,538       |   |                      |   | 13,313 |   |
|    Retained      earnings                                                                                                                                                                                                                                   |   |          | 7,968        |   |                      |   | 7,788 |   |
|    Accumulated      other comprehensive loss:                                                                                                                                                                                                               |   |          |         |   |                      |   |   |   |
|       Net      unrealized holding losses on available - for-sale    securities                                                                                                                                                               |   |          | (202         | )      |                      |   | (173 | ) |
|    Less      treasury stock at cost, 52,700      shares                                                                                       |   |          |  (140   | )      |                      |   | (140 | ) |
|        Total      stockholders' equity                                                                                                                                                                                                  |   |          |  21,228 |   |                      |   |  20,851 |   |
|    Total      liabilities and stockholders' equity                                                                                                                                                                                                          |   | $             | 50,383       |   |                      | $      | 40,537 |   |
|                                                                                                                                                                                                                                                                       |   |          |         |   |                      |   |   |   |

----

|   | (in      thousands, except share and per sharedata) |
|--------|-----------------------------------------------------|

|                                                  |   | Three      MonthsEnded June 30, 2010 |        |   | Three      MonthsEnded June 30, 2009 |   |        | Six      MonthsEnded June 30, 2010 |   |   | Six      MonthsEnded June 30, 2009 |   |
|-------------------------------------------------------|--------|--------------------------------------|-------------|--------|--------------------------------------|--------|-------------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |
| Revenues                                              |   | $                                    | 24,439      |   |                                 | $      | 16,621      |                               |   | $      | 37,899                             |   |   | $ | 36,327 |   |
| Cost      of revenues                                 |   |                                 | 21,755      |   |                                 |   | 15,066      |                               |   |   | 33,808                             |   |   |   | 32,950 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|  Gross      profit                               |   |                                 | 2,684       |   |                                 |   | 1,555       |                               |   |   | 4,091                              |   |   |   | 3,377 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Selling,      general and administrative expenses     |   |                                 |  1,405 |   |                                 |   |  1,357 |                               |   |   |  2,641                        |   |   |   |  2,759 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|   Operating      income                     |   |                                 | 1,279       |   |                                 |   | 198         |                               |   |   | 1,450                              |   |   |   | 618 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Other      income:                                    |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|    Interest      income                |   |                                 | 24          |   |                                 |   | 20          |                               |   |   | 58                                 |   |   |   | 54 |   |
|    Interest      expense               |   |                                 | (15         | )      |                                 |   | (16         | )                                  |   |   | (28                                | )      |   |   | (34 | ) |
|      Total      other income |   |                                 | 9           |   |                                 |   | 4           |                               |   |   | 30                                 |   |   |   | 20 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Income      before provision for income taxes         |   |                                 | 1,288       |   |                                 |   | 202         |                               |   |   | 1,480                              |   |   |   | 638 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Provision      for income taxes                       |   |                                 | 567         |   |                                 |   | 79          |                               |   |   | 672                                |   |   |   | 228 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Net      income                                       |   | $                                    | 721         |   |                                 | $      | 123         |                               |   | $      | 808                                |   |   | $ | 410 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Earnings      per common share:                       |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Basic                                                 |   | $                                    | .11         |   |                                 | $      | .02         |                               |   | $      | .13                                |   |   | $ | .07 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Diluted                                               |   | $                                    | .11         |   |                                 | $      | .02         |                               |   | $      | .13                                |   |   | $ | .07 |   |
|                                                  |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
| Weighted      average common shares outstanding:      |   |                                 |        |   |                                 |   |        |                               |   |   |                               |   |   |   |   |   |
|   Basic                                     |   |                                 | 6,288,774   |   |                                 |   | 6,235,125   |                               |   |   | 6,266,567                          |   |   |   | 6,244,654 |   |
|   Diluted                                   |   |                                 | 6,307,756   |   |                                 |   | 6,266,637   |                               |   |   | 6,286,364                          |   |   |   | 6,287,509 |   |

----

|                                                                                 |   | Three      MonthsEnded June 30, 2010 |    |   | Three      MonthsEnded June 30, 2009 |   |    | Six      MonthsEnded June 30, 2010 |   |   | Six      MonthsEnded June 30, 2009 |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|--------|-------------------------------------------|--------|---------|-----------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |
| Net      income                                                                      |   | $                                         | 721     |   |                                      | $      | 123     |                                    |   | $      | 808                                     |   |   | $ | 410 |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Other      comprehensive income (loss) before income tax (benefit):                  |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Unrealized      holding gains (losses) arising  during theperiod           |   |                                      | (89     | )      |                                      |   | 153     |                                    |   |   | (53                                     | )      |   |   | 144 |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Less:      reclassification adjustment for gains included in net    income           |   |                                      |  - |   |                                      |   |  - |                                    |   |   |  -                                 |   |   |   |  - |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Other      comprehensive income (loss) before income tax (benefit)                   |   |                                      | (89     | )      |                                      |   | 153     |                                    |   |   | (53                                     | )      |   |   | 144 |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Income      tax (benefit) related to items of other comprehensive income      (loss) |   |                                      | (40     | )      |                                      |   | 68      |                                    |   |   | (24                                     | )      |   |   | 64 |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Other      comprehensive income (loss), net of income tax (benefit)                  |   |                                      | (49     | )      |                                      |   | 85      |                                    |   |   | (29                                     | )      |   |   | 80 |   |
|                                                                                 |   |                                      |    |   |                                      |   |    |                                    |   |   |                                    |   |   |   |   |   |
| Total      comprehensive income                                                      |   | $                                         | 672     |   |                                      | $      | 208     |                                    |   | $      | 779                                     |   |   | $ | 490 |   |

----

|                                                            |   | Common      Stock |      |   | AdditionalPaid-In |   |     | Retained |   |   | AccumulatedOtherComprehensive |   |   | Treasury |     |   |   |   |
|-----------------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|----------|----------|--------|--------|-------------------------------|--------|--------|----------|----------|--------|--------|--------|
|                                                            |   | Shares            |      |   | Amount            |   |     | Capital  |   |   | Earnings                      |   |   | Loss     |     |   | Stock  |   |   | Total |   |
| Balances,      January 1, 2010                                  |   |              | 6,287,825 |   |              | $      | 63       |     |   | $      | 13,313                        |   |   | $        | 7,788    |   |   | $      | (173 | ) |   | $ | (140 | ) |   | $ | 20,851 |   |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Net      income                                                 |   |              | -         |   |              |   | -        |     |   |   |                          |   |   |     | 808      |   |   |   | - |   |   |   | - |   |   |   | 808 |   |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividend - $.10 per share                             |   |              | -         |   |              |   | -        |     |   |   | -                             |   |   |     | (628     | )      |   |   | - |   |   |   |   |   |   |   | (628 | ) |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of share-based compensation                   |   |              | -         |   |              |   | -        |     |   |   | 12                            |   |   |     | -        |   |   |   | - |   |   |   | - |   |   |   | 12 |   |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employee      stock options  exercised                |   |              | 90,238    |   |              |   | 1        |     |   |   | 142                           |   |   |     | -        |   |   |   | - |   |   |   | - |   |   |   | 143 |   |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax      Benefits from employee Stock      Option Plans         |   |              |   -  |   |              |   |   - |     |   |   |    71               |   |   |     |   - |   |   |   |   - |   |   |   |    - |   |   |   |    71 |   |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      unrealized gains on available-for-sale      securities |   |              |  -   |   |              |   |  -  |     |   |   |  -                       |   |   |     |  -  |   |   |   | (29 | ) |   |   |   - |   |   |   | (29 | ) |
|                                                            |   |              |      |   |              |   |     |     |   |   |                          |   |   |     |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      June 30, 2010                                    |   |              | 6,378,063 |   |              | $      | 64       |     |   | $      | 13,538                        |   |   | $        | 7,968    |   |   | $      | (202 | ) |   | $ | (140 | ) |   | $ | 21,228 |   |

----

|                                                                                                    |   | Six      MonthsEnded June 30, 2010 |         |   | Six      MonthsEnded June 30, 2009 |   |
|---------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------------|--------|------------------------------------|--------|
| Cash      flows from operating activities:                                                              |   |                               |         |   |                               |   |
|    Net      income                                                                       |   | $                                  | 808          |   |                               | $      | 410 |   |
| Adjustments      to reconcile net income to cash used in operating    activities:                       |   |                               |         |   |                               |   |   |   |
|    Depreciation      and amortization                                                    |   |                               |   85    |   |                               |   |   84 |   |
|    Deferred      income taxes                                                            |   |                               | 5            |   |                               |   | 19 |   |
|    Tax      benefits from exercise of stock options                                      |   |                               | (71          | )      |                               |   | - |   |
|    Stock-based      compensation expense related to stock option plan                    |   |                               | 12           |   |                               |   | 9 |   |
|    Earnings      from joint venture                                                      |   |                               | (37          | )      |                               |   | - |   |
|    Changes      in operating assets and liabilities:                                     |   |                               |         |   |                               |   |   |   |
|    Accounts      receivable                                                              |   |                               | (8,686       | )      |                               |   | 2,021 |   |
|    Retainage      receivable                                                             |   |                               | (658         | )      |                               |   | 1,373 |   |
|    Costs      and estimated earnings in excess of billings on uncompleted      contracts |   |                               | (917         | )      |                               |   | (522 | ) |
|    Prepaid      income taxes                                                             |   |                               | -            |   |                               |   | (174 | ) |
|    Prepaid      expenses and other receivables                                           |   |                               | (327         | )      |                               |   | (134 | ) |
|    Accounts      payable                                                                 |   |                               | 5,518        |   |                               |   | (1,066 | ) |
|    Retainage      payable                                                                |   |                               | 698          |   |                               |   | (975 | ) |
|    Accrued      payroll and benefits                                                     |   |                               | 201          |   |                               |   | (606 | ) |
|    Accrued      expenses                                                                 |   |                               | 167          |   |                               |   | 123 |   |
|    Billings      in excess of costs and estimated earnings on uncompleted      contracts |   |                               | 2,823        |   |                               |   | (1,018 | ) |
|    Income      taxes payable                                                             |   |                               |  164    |   |                               |   |  - |   |
| Net cash used in operating      activities                                                              |   |                               | (215         | )      |                               |   | (456 | ) |
|                                                                                                    |   |                               |         |   |                               |   |   |   |
| Cash      flows from investing activities:                                                              |   |                               |         |   |                               |   |   |   |
|    Purchases      of property and equipment                                              |   |                               | (85          | )      |                               |   | (61 | ) |
|    Proceeds      from sale of marketable securities                                      |   |                               | 1,045        |   |                               |   | - |   |
|    Purchases      of marketable securities                                               |   |                               | (527         | )      |                               |   | (4 | ) |
|    Repayment      of advances by Joint Venture                                           |   |                               | 17           |   |                               |   | - |   |
| Net      cash  provided by (used in) investing activities                                     |   |                               | 450          |   |                               |   | (65 | ) |
|                                                                                                    |   |                               |         |   |                               |   |   |   |
| Cash      flows from financing activities:                                                              |   |                               |         |   |                               |   |   |   |
|    Proceeds      from employee stock options exercised                                   |   |                               | 143          |   |                               |   | - |   |
|    Dividends      paid                                                                   |   |                               | (628         | )      |                               |   | - |   |
|    Repayment      of mortgage payable                                                    |   |                               | (31          | )      |                               |   | (34 | ) |
|    Purchase      of treasury stock                                                       |   |                               | -            |   |                               |   | (124 | ) |
|    Tax      benefits from employee stock options exercised                               |   |                               | 71           |   |                               |   | - |   |
| Net      cash used in financing activities                                                              |   |                               | (445         | )      |                               |   | (158 | ) |
|                                                                                                    |   |                               |         |   |                               |   |   |   |
| Net      decrease in cash and cash equivalents                                                          |   |                               | (210         | )      |                               |   | (679 | ) |
| Cash      and cash equivalents, beginning of period                                                     |   |                               |  13,738 |   |                               |   | 16,611 |   |
| Cash      and cash equivalents, end of period                                                           |   | $                                  | 13,528       |   |                               | $      | 15,932 |   |
|                                                                                                    |   |                               |         |   |                               |   |   |   |
| Supplemental      disclosure of cash flow information                                                   |   |                               |         |   |                               |   |   |   |
| Cash      paid during the period for:                                                                   |   |                               |         |   |                               |   |   |   |
|      Interest                                                                  |   | $                                  | 28           |   |                               | $      | 34 |   |
|      Income      taxes                                                         |   | $                                  | 497          |   |                               | $      | 382 |   |

----

| 1. | Nature of Operations      and Basis of Presentation |
|----|-----------------------------------------------------|

| 2. | Significant Accounting      Policies |
|----|--------------------------------------|

----

| 3. | Fair Value of      Financial Instruments |
|----|------------------------------------------|

| 4.  | Marketable      Securities |
|----------|----------------------------|

|                                               |   | Level 1 |      |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|----------------------------------------------------|--------|---------|-----------|--------|---------|--------|--------|---------|--------|--------|-------|--------|
| Six      month Canadian time deposit               |   | $       | 519,000   |   |    | $      | -      |    |   | $      | -     |   |   | $ | 519,000 |   |
| Mutual      funds and marketable equity securities |   |    | 1,514,000 |   |    |   | -      |    |   |   | -     |   |   |   | 1,514,000 |   |
|   Total                                  |   | $       | 2,033,000 |   |    | $      | -      |    |   | $      | -     |   |   | $ | 2,033,000 |   |

----

| 5. | Joint      Venture |
|----|--------------------|

| Advances      to joint venture   |   | $      | -      |   |
|----------------------------------|--------|--------|--------|--------|
| Earnings      from joint venture |   |   | 37,000 |   |
| Balance      at June 30, 2010    |   | $      | 37,000 |   |

----

| 6. | Stockholders’      Equity |
|----|---------------------------------|

| (A) | Stock Option      Plans: |
|-----|--------------------------|

----

|                                |   | Numberof Shares |    |   | Weighted      AverageExercise Price |   |   | Weighted      Average Remaining      ContractualTerm in Years |   |   | AggregateIntrinsic Value |   |
|-------------------------------------|--------|-----------------|---------|--------|-------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|-------------------------------|--------|
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |
| Outstanding      at January 1, 2010 |   |            | 185,501 |   |                                | $      | 2.27   |                                                          |   |   |                          |   |   |   |
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |   |   |
| Expired/canceled                    |   |            | -       |   |                                | $      | -      |                                                          |   |   |                          |   |   |   |
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |   |   |
| Granted                             |   |            | -       |   |                                | $      | -      |                                                          |   |   |                          |   |   |   |
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |   |   |
| Exercised                           |   |            | (90,238 | )      |                                | $      | 1.58   |                                                          |   |   |                          |   |   |   |
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |   |   |
| Outstanding      at June 30, 2010   |   |            | 95,263  |   |                                | $      | 2.92   |                                                          |   |   | 4.3                           |   |   | $ | 102,000 |   |
|                                |   |            |    |   |                                |   |   |                                                          |   |   |                          |   |   |   |   |   |
| Exercisable      at June 30, 2010   |   |            | 75,262  |   |                                | $      | 2.62   |                                                          |   |   | 3.2                           |   |   | $ | 39,000 |   |

|                                                 |   | Three Months EndedJune 30, 2010 |    |   | Three Months EndedJune 30, 2009 |   |   | Six Months EndedJune 30, 2010 |   |   | Six Months EndedJune 30, 2010 |   |
|------------------------------------------------------|--------|--------------------------------------|---------|--------|-------------------------------------------|--------|--------|------------------------------------|--------|--------|------------------------------------|--------|
| Proceeds      from stock options exercised           |   | $                                    | 131,000 |   |                                      | $      | -      |                               |   | $      | 143,000                            |   |   | $ | - |   |
|                                                 |   |                                 |    |   |                                      |   |   |                               |   |   |                               |   |   |   |   |   |
| Tax      benefits related to stock options exercised |   | $                                    | 64,000  |   |                                      | $      | -      |                               |   | $      | 71,000                             |   |   | $ | - |   |
|                                                 |   |                                 |    |   |                                      |   |   |                               |   |   |                               |   |   |   |   |   |
| Intrinsic      value of stock options exercised      |   | $                                    | 143,000 |   |                                      | $      | -      |                               |   | $      | 159,000                            |   |   | $ | - |   |

| (B)  | Dividend |
|-----------|----------|

| (C) | Treasury      Stock |
|-----|---------------------|

| 7. | Earnings per      Share |
|----|-------------------------|

----

|                                                                                           |   | Three      Months EndedJune 30, 2010 |                   |   | Three      Months EndedJune 30, 2009 |   |                   | Six      Months EndedJune 30, 2010 |   |   | Six      Months EndedJune 30, 2009 |   |
|------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------------------|--------|--------------------------------------|--------|------------------------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |
| Net      income                                                                                |   | $                                    |  721,000          |   |                                 | $      | 123,000                |                               |   | $      |  808,000                      |   |   | $ | 410,000 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Earnings      per share – basic:                                                         |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Weighted      average shares outstanding      during the period                                |   |                                 |    6,288,774 |   |                                 |   |    6,235,125 |                               |   |   |  6,266,567                    |   |   |   |    6,244,654 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Earnings      per share - basic                                                                |   | $                                    | .11                    |   |                                 | $      | .02                    |                               |   | $      | .13                                |   |   | $ | .07 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Earnings  per      share – diluted:                                            |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Weighted      average shares outstanding      during the period                                |   |                                 |    6,288,774 |   |                                 |   |    6,235,125 |                               |   |   |    6,266,567             |   |   |   |    6,244,654 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Effect      of stock option dilution                                                           |   |                                 | 18,982                 |   |                                 |   |  31,512           |                               |   |   | 19,797                             |   |   |   | 42,855 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Total      shares outstanding for purposes      of calculating diluted earnings      per share |   |                                 |   6,307,756       |   |                                 |   |    6,266,637 |                               |   |   |    6,286,364             |   |   |   |    6,287,509 |   |
|                                                                                           |   |                                 |                   |   |                                 |   |                   |                               |   |   |                               |   |   |   |   |   |
| Earnings  per      share – diluted                                             |   | $                                    | .11                    |   |                                 | $      | .02                    |                               |   | $      | .13                                |   |   | $ | .07 |   |

| 8. | Commitment and      Contingencies |
|----|-----------------------------------|

| 9. | Recently Issued      AccountingPronouncements |
|----|-----------------------------------------------|

----

| ITEM      2.  | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|--------------------|-------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ITEM      3. | QUANTITITATIVE AND      QUALITATIVE DISCLOSURES ABOUT MARKETRISK |
|--------------|------------------------------------------------------------------|

| ITEM      4.  | CONTROLS      AND PROCEDURES |
|--------------------|------------------------------|

----

| ITEM      1. | LEGAL      PROCEEDINGS |
|--------------|------------------------|

| ITEM      1A.  | RISK      FACTORS |
|---------------------|-------------------|

| ITEM      2. | UNREGISTERED SALES OF      EQUITY SECURITIES AND USE OFPROCEEDS |
|--------------|-----------------------------------------------------------------|

| ITEM      3. | DEFAULTS      UPON SENIOR SECURITIES |
|--------------|--------------------------------------|

| ITEM      4. | [REMOVED      AND RESERVED] |
|--------------|-----------------------------|

| ITEM      5. | OTHER      INFORMATION |
|--------------|------------------------|

| ITEM      6.  | EXHIBITS |
|--------------------|----------|

----

|                                 | KSW, INC. |                                                                               |
|--------------------------------------|-----------|------------------------------------------------------------------------------------|
| Date:  August      9, 2010 |      |                                                                               |   |
|                                 | By:       | /s/ Richard      W. Lucas                                                     |   |
|                                 |      | Richard      W. Lucas                                                              |   |
|                                 |      | Chief      Financial Officer                                                       |   |
|                                 |      |                                                                               |   |
|                                 |      | (Principal      Financial and Accounting Officer and      Duly Authorized Officer) |   |

----

|   | 11     | Statement      Regarding Computation of Earnings per Share (see Note 7 to the      Consolidated Financial Statements included elsewhere in this      Report) |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                         |
|        | 31.1   | Certification      of Chief Executive Officer required by Rule 13a-14(a)                                                                                     |
|   |   |                                                                                                                                                         |
|   | 31.2   | Certification      of Chief Financial Officer required by Rule 13a-14(a)                                                                                     |
|   |   |                                                                                                                                                         |
|   | 32.1   | Certification      of Chief Executive Officer required by Rule 13a-14(b) and 18 U.S.C.      §1350                                                       |
|   |   |                                                                                                                                                         |
|   | 32.2   | Certification      of Chief Financial Officer required by Rule 13a-14 (b) and 18 U.S.C.      §1350                                                      |

----