| (Mark One) |                                                                                     |
|------------|------------------------------------------------------------------------------------------|
| x          | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|       |                                                                                     |
|       | For the quarterly period ended June 30, 2010                                             |
| OR         |
| o          | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

----

| Delaware                                                                           | 38-1799862                           |
|------------------------------------------------------------------------------------|--------------------------------------|
| (State or Other Jurisdiction of                                                    | (I.R.S. Employer Identification No.) |
| Incorporation or Organization)                                                     |                                 |
|                                                                               |                                 |
| 2525 Shader Rd., Orlando, Florida                                                  | 32804                                |
| (Address of principal executive offices)                                           | (Zip Code)                           |
|                                                                               |
| (407) 298-2000                                                                     |
| (Registrant’s telephone number, including area code)                         |
|                                                                               |                                 |
|                                                                               |                                 |
| (Former name, former address, and former fiscal year if changed since last report) |

----

| Class                        |   | Outstanding at August 13, 2010 |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|
| Common Stock, $0.01 par value                                                                                                                   |   | 2,250,373                      |

----

| PART I.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Financial Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Condensed Consolidated Balance Sheets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 1      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         As of June 30, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         As of December 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Condensed Consolidated Statements of Operations:                                                                                                                    |   |   | 3      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         Three months ended June 30, 2010 and 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         Six months ended June 30, 2010 and 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Condensed Consolidated Statement of Stockholders’ Equity:                                                                                                     |   |   | 4      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         Six months ended June 30, 2010 and 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Condensed Consolidated Statements of Cash Flows:                                                                                                                    |   |   | 5      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | –         Six months ended June 30, 2010 and 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Notes to Condensed Consolidated Financial Statements:                                                                                                               |   |   | 6      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Management’s Discussion and Analysis of Financial Condition and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Results of Operations                                                                                                                                                                   |   |   | 15     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Quantitative and Qualitative Disclosure About Market Risk                                                                                                           |   |   | 22     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Controls and Procedures                                                                                                                                             |   |   | 22     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| PART II.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Legal Proceedings                                                                                                                                                   |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 1A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Risk Factors                                                                                                                                                        |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                         |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Defaults Upon Senior Securities                                                                                                                                     |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (Removed and Reserved)                                                                                                                                              |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Other Information                                                                                                                                                   |   |   | 23     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Exhibits                                                                                                                                                                                                                                                                          |   |   | 24     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |
| SIGNATURES                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 25     |   |

----

|                                                             |   | June 30, 2010 |    |   | December 31,2009 (A) |   |
|-----------------------------------------------------------------------|--------|---------------|---------|--------|----------------------|--------|
| ASSETS                                                                |   |          |    |   |                 |   |
| Current Assets:                                                       |   |          |    |   |                 |   |
| Cash and cash equivalents                                             |   | $             | 3,611   |   |                 | $      | 3,816 |   |
| Accounts receivable, less allowances of $117 and $259, respectively   |   |          | 6,994   |   |                 |   | 4,779 |   |
| Inventories                                                           |   |          | 6,424   |   |                 |   | 5,348 |   |
| Prepaid expenses and other current assets                             |   |          | 267     |   |                 |   | 412 |   |
| Total Current Assets                                                  |   |          | 17,296  |   |                 |   | 14,355 |   |
| Property, Plant and Equipment:                                        |   |          |    |   |                 |   |   |   |
| Land                                                                  |   |          | 670     |   |                 |   | 670 |   |
| Buildings and improvements                                            |   |          | 4,896   |   |                 |   | 4,856 |   |
| Machinery and equipment                                               |   |          | 13,440  |   |                 |   | 13,312 |   |
| Gross property, plant and equipment                                   |   |          | 19,006  |   |                 |   | 18,838 |   |
| Less: accumulated depreciation                                        |   |          | (15,422 | )      |                 |   | (15,113 | ) |
|       Net property, plant and equipment |   |          | 3,584   |   |                 |   | 3,725 |   |
| Deferred income taxes, net                                            |   |          | 111     |   |                 |   | 111 |   |
| Other assets                                                          |   |          | 305     |   |                 |   | 377 |   |
| Total Assets                                                          |   | $             | 21,296  |   |                 | $      | 18,568 |   |

----

|                                                                                                                                                                |   | June 30, 2010 |   |   | December 31,2009 (A) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                               |   |          |   |   |                 |   |
| Current Liabilities:                                                                                                                                                     |   |          |   |   |                 |   |
| Note payable to bank                                                                                                                                                     |   | $             | 1,032  |   |                 | $      | 1,696 |   |
| Accounts payable                                                                                                                                                         |   |          | 2,531  |   |                 |   | 2,333 |   |
| Accrued compensation and commissions expense                                                                                                                             |   |          | 1,329  |   |                 |   | 1,220 |   |
| Other accrued expenses                                                                                                                                                   |   |          | 956    |   |                 |   | 1,020 |   |
| Current maturities of long-term debt                                                                                                                                     |   |          | 2,586  |   |                 |   | 2,620 |   |
| Total Current Liabilities                                                                                                                                                |   |          | 8,434  |   |                 |   | 8,889 |   |
| Long-term debt, net of current portion                                                                                                                                   |   |          | 522    |   |                 |   | 669 |   |
| Total Liabilities                                                                                                                                                        |   |          | 8,956  |   |                 |   | 9,558 |   |
|                                                                                                                                                                     |   |          |   |   |                 |   |   |   |
| Commitments and Contingencies                                                                                                                                            |   |          |   |   |                 |   |   |   |
|                                                                                                                                                                     |   |          |   |   |                 |   |   |   |
| Stockholders’ Equity:                                                                                                                                              |   |          |   |   |                 |   |   |   |
| Common stock, $0.01 par value - 10,000,000 shares authorized; 2,245,970 and 2,227,684 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively |   |          | 22     |   |                 |   | 22 |   |
| Additional paid-in capital                                                                                                                                               |   |          | 20,738 |   |                 |   | 20,708 |   |
| Accumulated deficit                                                                                                                                                      |   |          | (8,361 | )      |                 |   | (11,604 | ) |
| Accumulated other comprehensive loss                                                                                                                                     |   |          | (59    | )      |                 |   | (116 | ) |
| Total Stockholders’ Equity                                                                                                                                         |   |          | 12,340 |   |                 |   | 9,010 |   |
| Total Liabilities and Stockholders’ Equity                                                                                                                         |   | $             | 21,296 |   |                 | $      | 18,568 |   |

| (A)   | The Condensed Consolidated Balance Sheet as of December 31, 2009 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                   |   | Three MonthsEnded June 30,                                  |      |   | Six MonthsEnded June 30,                                   |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|-----------|--------|------------------------------------------------------------|--------|
|                                                                                                        |   |           2010 |      |   |          2009 |   |   |          2010 |   |   |           2009 |   |
|                                                                                                        |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |
| REVENUES                                                                                                    |   | $                                                           | 12,535    |   |                                                       | $      | 7,236 |   |   | $ | 23,236 |   |   | $ | 14,778 |   |
| Cost and expenses:                                                                                          |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Manufacturing cost of sales                                                                                 |   |                                                        | 7,990     |   |                                                       |   | 5,798 |   |   |   | 15,038 |   |   |   | 11,743 |   |
| Engineering, selling and administrative                                                                     |   |                                                        | 2,194     |   |                                                       |   | 2,332 |   |   |   | 4,643 |   |   |   | 4,886 |   |
| Total Cost and Expenses                                                                                     |   |                                                        | 10,184    |   |                                                       |   | 8,130 |   |   |   | 19,681 |   |   |   | 16,629 |   |
| OPERATING INCOME (LOSS)                                                                                     |   |                                                        | 2,351     |   |                                                       |   | (894 | ) |   |   | 3,555 |   |   |   | (1,851 | ) |
| Other income (expense):                                                                                     |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                                                            |   |                                                        | (112      | )      |                                                       |   | (90 | ) |   |   | (217 | ) |   |   | (178 | ) |
| Other income                                                                                                |   |                                                        | 36        |   |                                                       |   | 35 |   |   |   | 31 |   |   |   | 43 |   |
|    Total Other Income (Expense)                                                              |   |                                                        | (76       | )      |                                                       |   | (55 | ) |   |   | (186 | ) |   |   | (135 | ) |
| INCOME (LOSS) BEFORE INCOME TAXES                                                                           |   |                                                        | 2,275     |   |                                                       |   | (949 | ) |   |   | 3,369 |   |   |   | (1,986 | ) |
| Income tax benefit (provision)                                                                              |   |                                                        | (98       | )      |                                                       |   | 12 |   |   |   | (126 | ) |   |   | 42 |   |
|                                                                                                        |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                                                                                           |   | $                                                           | 2,177     |   |                                                       | $      | (937 | ) |   | $ | 3,243 |   |   | $ | (1,944 | ) |
|                                                                                                        |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares used in basic and diluted net income (loss) per common share calculation. |   |                                                        | 2,245,970 |   |                                                       |   | 2,183,236 |   |   |   | 2,244,851 |   |   |   | 2,188,823 |   |
|                                                                                                        |   |                                                        |      |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE                                                        |   | $                                                           | 0.97      |   |                                                       | $      | (0.43 | ) |   | $ | 1.44 |   |   | $ | (0.89 | ) |

|   |   |
|--------|--------|

----

|                                        |   | Shares ofCommon StockOutstanding |      |   | CommonStock |   |   | AdditionalPaid-InCapital |   |   | Accumulated Deficit |   |   | Accumulated Other Comprehensive Loss |    |   | Total  |   |
|---------------------------------------------|--------|----------------------------------|-----------|--------|-------------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|--------------------------------------|---------|--------|--------|--------|
| Balance at January 1, 2010                  |   |                             | 2,227,684 |   |        | $      | 22     |                     |   | $      | 20,708              |   |   | $                                    | (11,604 | )      |   | $      | (116 | ) |   | $ | 9,010 |   |
| Comprehensive income:                       |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Net income for period                       |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | 3,243   |   |   |   | -- |   |   |   | 3,243 |   |
| Other comprehensive income                  |   |                             | --        |   |        |   | --     |                     |   |   | --                  |   |   |                                 | --      |   |   |   | 57 |   |   |   | 57 |   |
| Comprehensive income                        |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |   |   |   |   |   |   | 3,300 |   |
|                                        |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Issuance of new shares for restricted stock |   |                             | 18,286    |   |        |   | --     |                     |   |   | 30                  |   |   |                                 | --      |   |   |   | -- |   |   |   | 30 |   |
| Balance at June 30, 2010                    |   |                             | 2,245,970 |   |        | $      | 22     |                     |   | $      | 20,738              |   |   | $                                    | (8,361  | )      |   | $      | (59 | ) |   | $ | 12,340 |   |
|                                        |   |                             |      |   |        |   |   |                     |   |   |                |   |   |                                 |    |   |   |   |   |   |   |   |   |   |

----

|                                                                                                  |   | Six Months EndedJune 30, |   |
|------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                       |   | 2010                     |   |   | 2009 |   |
|                                                                                                       |   |                     |   |   |   |   |
| OPERATING ACTIVITIES                                                                                       |   |                     |   |   |   |   |
| Net income (loss)                                                                                          |   | $                        | 3,243  |   |   | $ | (1,944 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities:                   |   |                     |   |   |   |   |   |   |
| Depreciation                                                                                               |   |                     | 309    |   |   |   | 547 |   |
| Amortization of finite-lived intangible assets                                                             |   |                     | 72     |   |   |   | 30 |   |
| Stock-based compensation                                                                                   |   |                     | 30     |   |   |   | 40 |   |
| Changes in operating assets and liabilities:                                                               |   |                     |   |   |   |   |   |   |
|    Decrease (increase) in accounts receivable                                               |   |                     | (2,215 | ) |   |   | 2,562 |   |
|    Decrease (increase) in inventories                                                       |   |                     | (1,076 | ) |   |   | 511 |   |
|    Increase (decrease) in trade accounts payable, accrued liabilities and other liabilities |   |                     | 300    |   |   |   | (699 | ) |
|    Decrease (increase) in other current assets                                              |   |                     | 145    |   |   |   | 244 |   |
| Net cash provided by operating activities                                                                  |   |                     | 808    |   |   |   | 1,291 |   |
|                                                                                                       |   |                     |   |   |   |   |   |   |
| INVESTING ACTIVITIES                                                                                       |   |                     |   |   |   |   |   |   |
| Capital expenditures                                                                                       |   |                     | (168   | ) |   |   | (234 | ) |
| Net cash used in investing activities                                                                      |   |                     | (168   | ) |   |   | (234 | ) |
|                                                                                                       |   |                     |   |   |   |   |   |   |
| FINANCING ACTIVITIES                                                                                       |   |                     |   |   |   |   |   |   |
| Net repayments on note payable to bank                                                                     |   |                     | (664   | ) |   |   | (1,441 | ) |
| Repayments of long-term debt                                                                               |   |                     | (181   | ) |   |   | (587 | ) |
| Net cash used in financing activities                                                                      |   |                     | (845   | ) |   |   | (2,028 | ) |
|                                                                                                       |   |                     |   |   |   |   |   |   |
| Decrease in cash and cash equivalents                                                                      |   |                     | (205   | ) |   |   | (971 | ) |
| Cash and cash equivalents at beginning of period                                                           |   |                     | 3,816  |   |   |   | 5,325 |   |
| Cash and cash equivalents at end of period                                                                 |   | $                        | 3,611  |   |   | $ | 4,354 |   |
|                                                                                                       |   |                     |   |   |   |   |   |   |
|   Supplemental Disclosure:                                                                       |   |                     |   |   |   |   |   |   |
|       Cash paid for interest                                                 |   | $                        | 218    |   |   | $ | 178 |   |
| Non-cash Financing Transactions:                                                                           |   |                     |   |   |   |   |   |   |
| Issuance of treasury shares for restricted stock                                                           |   | $                        | --     |   |   | $ | 101 |   |

----

| A.   | Subsidiaries of the Registrant |
|----------------|--------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |       Owned By LGL |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|
| M-tron Industries, Inc.                                                                                                                                                                                           |   |                                        | 100.0  | % |
|         M-tron Industries, Ltd.                                                                                                                                           |   |                                        | 100.0  | % |
|         Piezo Technology, Inc.                                                                                                                                            |   |                                        | 100.0  | % |
|                 Piezo Technology India Private Ltd.                                                                               |   |                                        | 99.9   | % |
| Lynch Systems, Inc.                                                                                                                                                                                          |   |                                        | 100.0  | % |

| B.   | Basis of Presentation |
|----------------|-----------------------|

----

| C.   | Inventories |
|----------------|-------------|

|         |   | June 30,2010   |   |   | December 31,2009 |   |
|-------------------|--------|----------------|--------|--------|------------------|--------|
|              |   | (in thousands) |   |
| Raw materials     |   | $              | 2,680  |   |             | $      | 2,738 |   |
| Work in process   |   |           | 2,296  |   |             |   | 1,486 |   |
| Finished goods    |   |           | 1,448  |   |             |   | 1,124 |   |
| Total Inventories |   | $              | 6,424  |   |             | $      | 5,348 |   |

----

| D.   | Notes Payable to Banks and Long-Term Debt |
|----------------|-------------------------------------------|

|                                                                                                                                                                                                                                    |   | June 30, 2009  |   |   | December 31,2009 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|------------------|--------|
| Notes Payable:                                                                                                                                                                                                                          |   | (in thousands) |   |
| MtronPTI revolving loan (First National Bank of Omaha (“FNBO”)) at 30-day LIBOR plus 4.75%; (5.10% at June 30, 2010), due June 30, 2011 (see Note M – Subsequent Events)                                              |   | $              | 1,032  |   |             | $      | 1,696 |   |
|                                                                                                                                                                                                                                    |   |           |   |   |             |   |   |   |
| Long-Term Debt:                                                                                                                                                                                                                         |   |           |   |   |             |   |   |   |
| MtronPTI term loan (RBC Centura Bank (“RBC”)) due October 1, 2010.  The note bears interest at LIBOR Base Rate plus 2.75%.  Interest rate swap converts loan to a fixed rate, at 7.51% at June 30, 2010 |   | $              | 2,297  |   |             | $      | 2,341 |   |
| Mtron term loan (FNBO) due January 24, 2013. The note bears interest at 30-day LIBOR plus 2.10%. Interest rate swap converts loan to a fixed rate, at 5.60% at June 30, 2010                                                       |   |           | 811    |   |             |   | 948 |   |
|                                                                                                                                                                                                                                    |   |           | 3,108  |   |             |   | 3,289 |   |
| Current maturities                                                                                                                                                                                                                      |   |           | 2,586  |   |             |   | 2,620 |   |
| Long -Term Debt                                                                                                                                                                                                                         |   | $              | 522    |   |             | $      | 669 |   |
|                                                                                                                                                                                                                                    |   |           |   |   |             |   |   |   |

----

----

| E.   | Stock Based Compensation |
|----------------|--------------------------|

| F.   | Earnings (Loss) Per Share |
|----------------|---------------------------|

|                             |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
|----------------------------------|--------|----------------------------|--------|--------|--------------------------|--------|
|                             |   | 2010                       |   |   | 2009                     |   |   | 2010 |   |   | 2009 |   |
| Options to purchase common stock |   |                       | --     |   |                     |   | 200,000 |   |   |   | -- |   |   |   | 200,000 |   |
| Unvested restricted stock        |   |                       | 9,136  |   |                     |   | 22,216 |   |   |   | 9,136 |   |   |   | 22,216 |   |
| Totals                           |   |                       | 9,136  |   |                     |   | 222,216 |   |   |   | 9,136 |   |   |   | 222,216 |   |

| G.   | Other Comprehensive Income (Loss) |
|----------------|-----------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Six Months EndedJune 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2010                     |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (in thousands)           |   |
| Balance beginning of period                                                                                                        |   | $                        | (116   | ) |   | $ | (235 | ) |
| Deferred gain on swap liability on hedge contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     | 60     |   |   |   | 53 |   |
| Unrealized gain (loss) on available-for-sale securities                                                                            |   |                     | (3     | ) |   |   | 6 |   |
| Balance end of period                                                                                                                                  |   | $                        | (59    | ) |   | $ | (176 | ) |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | June 30,2010   |   |   | December 31, 2009 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | (in thousands) |   |
| Deferred loss on swap liability on hedge contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $              | (69    | )      |              | $      | (129 | ) |
| Unrealized gain on available-for-sale securities                                                                            |   |           | 10     |   |              |   | 13 |   |
| Accumulated other comprehensive loss                                                                                                            |   | $              | (59    | )      |              | $      | (116 | ) |

| H.   | Fair Value Measurements |
|----------------|-------------------------|

|                |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |   | June 30, 2010 |   |
|---------------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|--------|---------------|--------|
|                |   | (in thousands)                                                 |   |
| Marketable security |   | $                                                              | 25     |   |                                          | $      | --     |                                      |   | $      | --            |   |   | $ | 25 |   |

----

|                              |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |   | June 30, 2010 |   |
|-----------------------------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|--------|---------------|--------|
|                              |   | (in thousands)                                                 |   |
| Swap liability on hedge contracts |   | $                                                              | --     |   |                                          | $      | 69     |                                      |   | $      | --            |   |   | $ | 69 |   |

| I.   | Foreign Revenues |
|----------------|------------------|

|                                                 |   | Three Months EndedJune 30, |   |
|------------------------------------------------------|--------|----------------------------|--------|
| Foreign Revenues:                                    |   | 2010                       |   |   | 2009 |   |
|                                                 |   | (in thousands)             |   |
| Malaysia                                             |   | $                          | 1,759  |   |   | $ | 947 |   |
| China                                                |   |                       | 1,425  |   |   |   | 742 |   |
| Mexico                                               |   |                       | 607    |   |   |   | 408 |   |
| Singapore                                            |   |                       | 371    |   |   |   | 237 |   |
| Thailand                                             |   |                       | 264    |   |   |   | 223 |   |
| France                                               |   |                       | 142    |   |   |   | 130 |   |
| Taiwan                                               |   |                       | 185    |   |   |   | 33 |   |
| Canada                                               |   |                       | 131    |   |   |   | 54 |   |
| Italy                                                |   |                       | 51     |   |   |   | 68 |   |
| All other foreign countries                          |   |                       | 422    |   |   |   | 667 |   |
|      Total foreign revenues |   | $                          | 5,357  |   |   | $ | 3,509 |   |

----

|                                                 |   | Six Months EndedJune 30, |   |
|------------------------------------------------------|--------|--------------------------|--------|
| Foreign Revenues:                                    |   | 2010                     |   |   | 2009 |   |
|                                                 |   | (in thousands)           |   |
| Malaysia                                             |   | $                        | 3,304  |   |   | $ | 1,843 |   |
| China                                                |   |                     | 2,788  |   |   |   | 1,532 |   |
| Mexico                                               |   |                     | 1,106  |   |   |   | 746 |   |
| Thailand                                             |   |                     | 908    |   |   |   | 461 |   |
| Singapore                                            |   |                     | 475    |   |   |   | 842 |   |
| France                                               |   |                     | 337    |   |   |   | 308 |   |
| Taiwan                                               |   |                     | 289    |   |   |   | 64 |   |
| Canada                                               |   |                     | 190    |   |   |   | 145 |   |
| Italy                                                |   |                     | 195    |   |   |   | 124 |   |
| All other foreign countries                          |   |                     | 842    |   |   |   | 1,142 |   |
|      Total foreign revenues |   | $                        | 10,434 |   |   | $ | 7,207 |   |

| J.   | Commitments and Contingencies |
|----------------|-------------------------------|

| K.   | Income Taxes |
|----------------|--------------|

| L.   |  Related Party Transactions |
|----------------|----------------------------------|

----

| M.   | Subsequent Events |
|----------------|-------------------|

----

|   | Consolidated Revenues and Gross Margin |
|--------|----------------------------------------|

----

|   | Operating Income (Loss) |
|--------|-------------------------|

|   | Interest expense |
|--------|------------------|

|   | Income Taxes |
|--------|--------------|

|   | Net Income (Loss) |
|--------|-------------------|

----

|   | Consolidated Revenues and Gross Margin |
|--------|----------------------------------------|

----

|   | Interest expense |
|--------|------------------|

|   | Income Taxes |
|--------|--------------|

|   | Net Income (Loss) |
|--------|-------------------|

----

----

----

----

----

----

| Exhibit No. |  Description                                                                                            |
|-------------|--------------------------------------------------------------------------------------------------------------|
|        |                                                                                                         |
| 31.1        | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 31.2        | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 32.1        | Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
| 32.2        | Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |

|   | * Filed herewith |
|--------|------------------|

----

|   | SIGNATURES |
|--------|------------|

|                                                                                         |   | THE LGL GROUP, INC. |
|----------------------------------------------------------------------------------------------|--------|---------------------|
|                                                                                         |   |                |
|                                                                                         |   |                |
| Date:            August 16, 2010 |   | BY:                 | /s/ Gregory P. Anderson |
|                                                                                         |   |                | Gregory P. Anderson |
|                                                                                         |   |                | President and Chief Executive Officer(Principal Executive Officer) |
|                                                                                         |   |                |   |
|                                                                                         |   |                |   |
| Date:            August 16, 2010 |   | BY:                 | /s/ R. LaDuane Clifton |
|                                                                                         |   |                | R. LaDuane Clifton |
|                                                                                         |   |                | Chief Accounting Officer(Principal Financial Officer) |

----

| Exhibit No. |  Description                                                                                            |
|-------------|--------------------------------------------------------------------------------------------------------------|
|        |                                                                                                         |
| 31.1        | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 31.2        | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 32.1        | Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
| 32.2        | Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |