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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2009ORo

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


Commission File Number 0-511



COBRA ELECTRONICS CORPORATION(Exact name of Registrant as specified in its Charter)

DELAWARE(State of incorporation)

36-2479991(I.R.S. Employer Identification No.)6500 WEST CORTLAND STREET
CHICAGO, ILLINOIS(Address of principal executive offices)

60707(Zip Code)


Registrant's
telephone number, including area code:(773) 889-8870

Securities
registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $.331/3 Per Share; Common stock traded on the NASDAQ stock market

Securities
registered pursuant to Section 12(g) of the Act:None

Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. YES o    NO ý

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Act. YES o    NO ý

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ý

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o (Do not check if a
smaller reporting company)

Smaller reporting company ý


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES o    NO ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares
of common stock on The NASDAQ Stock Market on June 30, 2009, was $7,765,536.

The
number of shares of Registrant's Common Stock outstanding as of March 5, 2010 was 6,471,280.

Portions
of the Registrant's Definitive Proxy Statement relating to the Annual Meeting of Shareholders, scheduled to be held on May 11, 2010, are incorporated by reference into Part III
of this Report.



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Table of Contents

TABLE OF CONTENTS



Page(s)PART IItem 1:

BUSINESS

1GENERAL

1RECENT DEVELOPMENTS

1SALES AND DISTRIBUTION

2SUPPLIERS

2PATENT AND INTELLECTUAL PROPERTY

2COMPETITION

2EMPLOYEES

2INFORMATION BY SEGMENT AND GEOGRAPHIC AREA

2COBRA SEGMENT

3PPL SEGMENT

5AVAILABLE INFORMATION

7Item 1A:

RISK FACTORS

7Item 1B:

UNRESOLVED STAFF COMMENTS

12Item 2:

PROPERTIES

12Item 3:

LEGAL PROCEEDINGS

12Item 4:

RESERVED

13PART IIItem 5:

MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

14Item 6:

SELECTED FINANCIAL DATA

14Item 7:

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

15Item 7A:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

25Item 8:

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

27Item 9:

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

50Item 9A:

CONTROLS AND PROCEDURES

50Item 9B:

OTHER INFORMATION

50PART IIIItem 10:

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

51Item 11:

EXECUTIVE COMPENSATION

51Item 12:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS

51Item 13:

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

52Item 14:

PRINCIPAL ACCOUNTANT FEES AND SERVICES

52PART IVItem 15:

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

53Signatures

54


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PART I

Item 1.    Business

General

Cobra Electronics Corporation (the "Company"), incorporated in Delaware in 1961, is traded on The NASDAQ Stock Market under the symbol "COBR". The
Company is a leading designer and marketer of two-way
mobile communications and mobile navigation products in the United States, Canada and Europe, holding the number one or strong number two position in each of its longstanding product lines and
targeting a similar position for marine VHF radios, photo-enforcement detection and mobile navigation for professional drivers. The Company has a 48-year track record of innovation and the
development of award-winning products and is an industry leader in developing technology applications that serve consumers' needs. Management believes that the Company's future success depends upon
its ability to predict and respond in a timely and effective manner to changes in the markets it serves. Product performance, reliability, price, availability and service are the main competitive
factors. The Company's sales are dependent upon timely introduction of new products, which incorporate new features desired by consumers, at competitive prices. Cobra® is a leading brand
in Citizens Band radios, radar detectors, speed camera detection and two-way radios.

In
late 2006, the Company acquired Performance Products Limited ("PPL"), a UK-based designer and marketer of mobile navigation and photo-enforcement detection products,
primarily marketed under the Snooper® brand. PPL also developed and markets the AURA database (formerly known as the Enigma database) of photo-enforcement locations in the UK
and elsewhere in Europe, providing drivers equipped with Snooper mobile navigation and detection devices with advance warning of speed cameras and hazardous conditions. The AURA database has since
been expanded to include North America and provides warnings of photo-enforcement locations and other road hazards to users of certain Cobra products. The Company has established PPL as a reporting
segment for financial reporting purposes.

The
Company is well known for innovation and its responsiveness to consumer needs in each of the following product lines:

Recent Developments

Innovation remains the hallmark of the Company's success, as demonstrated by just a few of its recent product introductions and other recent
developments. The Company expects to continue attracting new customers with innovative product extensions and new product categories. New detection products for 2010 include a radar detector
with GPS-enabled photo-enforcement alerts that will retail for a price-point under $200 and the first radar detector with a touch-screen. All two-way radios offered in
2010 are RoHS compliant (lead-free), feature smaller, environmentally friendly packaging  50% less plastic and 10% smaller packaging footprint  and
longer ranges. The marine product line for 2010 includes two floating handheld VHF radios.

The
Company's 2010 product line will include the following new products:





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Sales & Distribution

Demand for consumer electronics products is somewhat seasonal and varies according to channel of distribution. Historically, sales in the last half
of the year are significantly greater than in the first half, reflecting increasing purchases by retailers for various promotional activities that begin mainly in the third quarter and culminate with
the holiday selling season. Also, because mass retail accounts make up an increasing portion of the Company's business, orders in the fourth quarter are generally stronger than orders in the third
quarter.

Suppliers

One of the Company's fundamental strengths is its product sourcing ability. Substantially all of the Company's products are manufactured to its
specifications and engineering designs by a number of suppliers, primarily in China, Hong Kong and South Korea. The Company maintains control over the design and production quality of its products
through its
wholly-owned subsidiary in Hong Kong, which seeks out new suppliers, monitors technological changes, performs source inspection of key suppliers, provides selected engineering services and expedites
shipments from suppliers.

Over
a period of years, the Company has developed a network of suppliers for its products. To maintain flexibility in product sourcing, all of the Company's contracts with its suppliers can be
terminated by the Company "at will". While it is the Company's goal to maintain strong relationships with its current suppliers, management believes that, if necessary, alternate suppliers could be
found. The extent to which a change in a supplier would have an adverse effect on the Company's business depends upon the timing of the change, the product or products that the supplier produces for
the Company and the volume of that production. The Company also maintains insurance coverage that would, under certain limited circumstances, reimburse the Company for lost profits resulting from a
supplier's inability to fulfill its commitments to the Company. The Company historically has negotiated substantially all of its purchases in U.S. dollars and, in the case of PPL, frequently uses
forward contracts to purchase dollars at a fixed exchange rate to the British pound sterling. The Company considers opportunities to make purchases in other currencies, such as the euro, to the extent
that doing so would be advantageous in light of currency fluctuations involving the U.S. dollar and other currencies. Research and product development expenditures, as well as
non-capitalized engineering costs, are expensed as incurred and amounted to $1.8 million in 2009, $2.2 million in 2008 and $2.2 million in 2007.

Patents and Intellectual Property

Patents and other intellectual property can be important marketing and merchandising tools across a broad range of products, but particularly for the
Company's newer products such as the AURA and Bluetooth® products. Whenever the Company develops a unique technology, patents are applied for to preserve exclusivity.

The
Company's two-way radios, detectors, Citizens Band radios, HighGear accessories, GPS receivers, marine products and mobile navigation devices are marketed globally
under the Cobra brand name. The Cobra trademark is registered in the United States, most European countries as well as other jurisdictions. The Company believes the Cobra trademark, which is
indefinitely renewable, is a significant factor in the successful marketing of its products.

Personal
navigation devices, GPS locators and other products designed and marketed by PPL are marketed in the United Kingdom and Europe under the Snooper brand name. The Snooper trademark is
registered in the United Kingdom and Europe and is a significant factor to successful marketing of PPL products in the United Kingdom and Europe.

Competition

Major competitors in the Cobra business segment are Motorola and Midland (two-way radios); Whistler and Escort/Beltronics (detection);
Uniden and Midland (Citizens Band radios); Icom, Uniden and Standard Radio (marine products); and Garmin and Rand McNally (mobile navigation for professional drivers).

Competitors
in the PPL segment include Garmin, Tom Tom and Navman for personal navigation devices, and Coyote and Road Angel for GPS products.

Employees

As of December 31, 2009, the Company employed 111 persons in the U.S. and 39 persons in its international operations. None of the Company's
employees are a member of a union. During 2009, the Company reduced its U.S. and international workforce and eliminated 24 positions.

Information by Segment and Geographic Area

The consolidated entity consists of Cobra Electronics Corporation and its subsidiaries in Hong Kong, Ireland and United Kingdom. The Company
segregates and reports its operating results into the Cobra Consumer Electronics ("Cobra") business segment, which sells under the COBRA brand name, and Performance Products Limited
("PPL") business segment, which sells under the SNOOPER brand

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name.
The Cobra segment is comprised of Cobra Electronics Corporation, Cobra Electronics (HK) Limited ("CHK") and Cobra Electronics Europe Limited ("CEEL").

Longlived
assets located outside of the United States totaled $8.0 million and $8.1 million at December 31, 2009 and 2008, respectively. International sales,
primarily in Canada and Europe (including those of PPL), were $25.5 million, $35.1 million and $34.5 million in 2009, 2008 and 2007, respectively. For additional financial
information about business segment and geographic areas, see Note 4 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Cobra Segment

Principal products marketed under the Cobra tradename include:

In
the United States, Cobra competes primarily with various manufacturers and distributors of consumer electronics products, principally on the basis of product features and price, and expects the
market for its products to remain highly competitive. Cobra also markets its products in over 70 countries through distributors.

Cobra's
products are distributed through a strong, well-established network of nearly 300 retailers and distributors located primarily in the United States, representing nearly 40,000
storefronts where Cobra products can be purchased. Approximately 60 percent of the Company's sales are made directly to retailers, such as mass marketers, consumer electronics specialty stores,
large department store chains, warehouse clubs, television home-shopping and internet retailers, direct-response merchandisers, home centers and specialty stores. Most of the remaining
sales are through two-step wholesale distributors that carry Cobra products to fill orders for travel centers, truck stops, small department stores and appliance dealers,
duty-free shops on cruise lines and for export. Cobra's primary sales force is composed of independent sales representatives who work on a straight commission basis. The sales
representatives do not sell competing products of other companies. In both Canada and Europe, as well as elsewhere throughout the world, the Company utilizes distributors, which sell primarily to
retailers. Cobra's return policies and payment terms are similar to those of other companies serving the consumer electronics market. Cobra products generally must be shipped within a short time after
an order is received and, as a result, order backlog is not significant.

Customers
that exceeded 10 percent of consolidated net sales in any one year are as follows: in 2009, sales to Wal-Mart were 15.4 percent, in 2008, sales to
Wal-Mart were 11.2 percent and in 2007, sales to Wal-Mart were 14.7 percent.



In 1997, Cobra entered the two-way radio market and in the fall of 1998 began selling its new microTALK® line. In 1999, the
Company launched its European line of microTALK PMR radios in the United Kingdom, France, Spain, Germany, Sweden and Finland, and now holds a leading share in the European market. The Company began
selling its microTALK FRS radios to the Canadian market in 2000 and introduced GMRS radios in 2004 and currently holds the number one share in this market. Cobra has attained a leading market position
in the domestic GMRS two-way radio market. Lithium ion battery models were introduced in 2008. Although this market has matured and continued category sales declines are expected, the
Company expects to maintain a leading market position.

The
2009 product line included smaller eco-friendly packaging and all lead-free products, in accordance with RoHS standards. The restyled CXR models (CXR 700/800/900) for 2009
are ultra compact and contain high capacity lithium ion batteries to support longer range. In addition, a camouflage model, the CXR 920, was introduced in 2009, with the same features as the other CXR
models.

The
product line for 2010 offers four conventional battery units (CXT 105/125/225/425) and four lithium ion units (CXR 725/825/920/925). All products feature smaller and environmentally friendly
packaging, longer ranges (except for the CXR 920) and ultra-clear, high performance reception. In addition, the CXR 725/825/920/925 include the patented VibrAlert® technology while the CXR
725/825/925 include the Rewind-Say-Again feature. Beginning in 2010, the clamshell packaging design will be replaced by a paperboard package, reducing plastic use
by 50 percent and the overall packaging footprint by 10 percent.

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Cobra is the number one brand in the domestic market for integrated radar/laser detectors. Cobra commands the number one market share by offering
innovative products with the latest technology. The Company has been a leader in applying laser detection technology, including introducing the industry's first laser-signal detector and the
industry's first integrated radar/laser detector with 360 degree laser detection capability. The Company was also the first to introduce to the retail channel "intelligent" detection systems capable
of alerting drivers with a differentiated signal for each of the frequencies emitted by the Company's patented, FCC-approved Safety Alert® transmitter. The Company's Safety
Alert Traffic Warning System is designed to help drivers avoid potentially serious accidents with police, fire, EMS and public utility vehicles. Over the years Cobra introduced digital radar detectors
with the industry's first color LED displays, improved detection range and a strong advance warning and an industry leading 15 bands. Wireless remote controlled radar/laser detectors (XRS R7 and XRS
R9G) with an optional GPS locator (standard with the R9G model) to detect red light and speed camera locations were introduced in 2007. A 1.5 inch color display was featured on the XRS 9950
introduced in 2008.

The
2009 detection products featured the following innovations: IntelliMute Pro, IntelliScope, IntelliView, 8 point electronic compass, 15-Band
technology, frequency display mode and 1.5 inch full color OLED display. IntelliMute Pro provides radar-detector-detector (RDD) immunity, Intelliscope provides a detailed location of photo enforcement
cameras, and IntelliView simultaneously provides locations of photo enforcement cameras and radar/laser detection warnings.

The
new detection products for 2010 are the XRS 9550G, XRS 9965 and XRS 9970G. The XRS 9550G is the first radar detector with GPS-enabled photo-enforcement detection that will
retail for under $200 and includes free lifetime updates to the AURA database, while the XRS 9965 is the first touch screen radar detector and the XRS 9970G is a touch screen radar
detector with free lifetime updates to the AURA database. The 2010 detection products will feature the following innovations: full color 1.5 inch touchscreen OLED display, 15-Band
technology, battery voltage meter, Voice-Alert, IntelliShield, Intelliview, Intelliview Pro, Intellimute Pro, 8 point GPS compass and AURA database.



Cobra is the leading brand in the domestic Citizens Band radio market. Most of this market is for mobile Citizens Band radios purchased primarily by
professional truck drivers. The remaining part of the domestic market is for hand-held Citizens Band radios used for sport and recreational activities. Cobra has a history of being the
technology leader in the Citizens Band radio market. The Company was the first Citizens Band radio marketer to combine a National Weather Service receiver with a mobile Citizens Band radio, enabling
motorists to obtain weather and travel information broadcasts. As a major enhancement of this feature, the Company introduced a mobile Citizens Band radio that incorporated an automatic alert feature
to warn of National Weather Service emergency advisories. In 1997, the Company introduced SoundTracker® technology, which dramatically improved the sound quality when the Citizens Band
radio is in receiving mode and allows the user's voice to break through cluttered airwaves and be more easily heard when transmitting. A new line of Citizens Band radios featuring an adjustable
illuminated front panel  NightWatch technology  was introduced in 1999. The patent pending 29 LTD BT, introduced in 2008, is the first
Citizens Band radio to offer Bluetooth wireless technology to allow hands free cell phone conversations, providing drivers with yet another way to communicate safely and easily.

Cobra
looks for opportunities to introduce limited edition Citizens Band radios that are intended to drive incremental sales. Historically, Cobra has licensed Harley-Davidson®, Dale
Earnhardt® and Dale Earnhardt Jr.® trademarks for this purpose. In 2007, Cobra offered a limited edition chrome model and followed up with a black-chrome limited edition model
in 2008. The Cobra Army Strong® model (29 LTD Army) was introduced in 2009.



In 1997, the Company introduced its first line of power inverters, which permit users to power devices requiring 120-volt AC power, such
as computers, video games and appliances, using the 12-volt outlet in a vehicle. Cobra's broad range of products extends from low power 130 watt requirements to applications that draw as
much as 2,500 watts. For example, the CPI 150 micro size inverter includes a USB port for an iPod®, Blackberry®, mobile phones, laptops and many more USB devices and is
available for sale at most major airports in the United States. USB output is offered on all models.

The
2009 product line added two high power inverters, the CPI 480 and CPI 880. All inverter models offered provide Pentagon protection, which includes reverse polarity, low voltage, over
voltage, temperature and low voltage alarm.

In
2009, Cobra introduced four jumpstarter models (CJS 50, CJI 150, CJIC 250 and CJIC 350). These products offer consumers a safe and convenient means to start their vehicle if the battery is low, and
each model will hold a charge while stored in the vehicle for up to three months. The jumpstarter models offer the following features: 12V DC output, 120V AC outlet, LED worklight, USB power port and
safety switch. Additionally, the CJIC 250 and 350 models include an air compressor and gauge and can be used to inflate a flat tire.



Cobra introduced fixed and hand-held dual power marine VHF transceivers and marine chartplotters in 2003. Marine chartplotters, the MC
600 series, featuring embedded aerial photographs of marina and harbor entrances, 3D mapping, dynamic arrows to indicate

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direction
and speed of tidal currents and arrival and off-course alarms, were introduced to marine retailers in 2006. Cobra launched a new line of handheld and fixed-mount VHF radios in
2007 with the Rewind Say-Again feature, a digital voice recorder that records the last 20 seconds of the transmission. A waterproof, 3-watt handheld VHF radio featuring an
illuminated LCD display and keypad, DC charger, charging jack and rechargeable batteries was introduced in 2007. The patent-pending and award winning MR F300 BT, a waterproof Bluetooth handset for
cell phone communications without exposing the cell phone to the elements, was introduced in 2008.

The
Company entered into an agreement withSea Towin 2009 to provide Cobra VHF radio products to Sea Tow Command.Sea
Towis an international marine assistance organization with over 110 locations that offers 24 hour support to its 160,000 members in the recreational boating community.

Also
late in 2009, the Company announced a long-term agreement to distribute the popular, European C-pod Security System, provided by Seakey AB in Sweden, and serve as the
exclusive U.S. distributor of C-pod©.

The
2010 product line introduces two floating handheld VHF radios. With a bright orange core, these floating radios are highly visible to facilitate retrieval by the boater. The MR HH 330 features a
6-watt VHF with NOAA weather channels. The MR HH475 features a 6-watt VHF, NOAA weather channels and Bluetooth technology that allow the answering of cell phones.



In 2009, Cobra extended its focus on the professional driver and introduced the 7700 PRO. The 7700 PRO is a GPS navigation system for
professional drivers and includes the following features: 7 inch screen, AURA database, ability to customize by truck type, size and load, truck-specific routing and over 33,000 trucker points of
interest. The 7700 PRO includes points of interest from the ProMiles® database and commercial vehicle service and support information powered by TruckDown. The introduction of
the 7700 PRO was in accordance with the new strategy for mobile navigation products within North America that the Company announced in December 2007. The new strategy was determined after the Company
reassessed the development of products in North America and determined it would only pursue niche products based on the PPL platform offering overall lower development costs.



In 2008, Cobra began marketing in North America a database of photo-enforcement locations as a feature of its high-end radar detectors,
drawing on the experience of PPL and its success in the UK and throughout Europe. Based on consumer response, Cobra rolled out the AURA database, the only verified photo-enforcement database in North
America, in January 2009. In addition to providing a unique feature offering for the Company's top-selling line of radar detectors and its mobile navigation products for the professional
driver, the AURA database will be marketed separately with photo-enforcement detection devices and may be licensed to other companies. The SL 3, introduced in 2009, is a speed camera and
red-light detector that uses the AURA database.

In
January 2010, the Company announced its AURA camera and driving hazard database would be included in Motorola GPS navigation systems in North America and Europe. This marks the first time
consumer personal navigation devices, other than those offered by Cobra, will feature speed and redlight camera detection, as well as speed traps and dangerous intersection alerts, as standard
features on a GPS device. Consumers will be offered a trial period and then be required to purchase a subscription to continue having access to the data.

PPL Segment

Products marketed by PPL include personal navigation devices, marketed under the tradename of Snooper Truckmate, Snooper Syrius, Snooper Sapphire
Plus, Snooper Strabo and others, and GPS-enabled speed camera location detectors, marketed under the tradenames of Snooper Sapphire and Snooper Evolution, among others. PPL also
markets under the AURA brand, a global database of speed camera locations and other driving hazards, such as high-accident zones, for driver safety.

Sales
are primarily in the UK; however, European sales are increasing, representing 37.1 percent of net sales in 2009 compared to 23.7 percent in 2008. Sales are made through a network
of approximately 1,400 retailers and distributors and PPL's website.



Snooper portable satellite navigation systems include the very best street level mapping from a global supplier of digital maps and Snooper's market
leading speed camera detector technology. Portable satellite navigation systems from Snooper are award winning, utilizing TMC traffic information technology and multi routing technology. They also
offer Bluetooth connectivity for hands-free cell phone communication.

The
Snooper Truckmate, introduced in 2008, is a personal navigation device with dedicated routing within the UK and Europe for trucks, buses, motor homes and other large vehicles. Information
available includes low bridges, weight restrictions and width
limitations. Entering specific vehicle information enables the device to select the most appropriate route. In 2009 the product line was expanded to include the following:



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The
Snooper S280 GPS Shotsaver, introduced in 2008, offers a complete golf course management tool for over 3,000 golf courses in the UK and Western Europe and includes distance calculations.
The unit also comes complete with built-in satellite navigation and speed camera location technology. In December 2009 the S320 Shotsaver golf unit was launched. The unit incorporates a
super-bright OLED screen making it easy to read in all conditions. The unit features a built-in rechargeable battery capable of running for 12 hours and is fully waterproof ensuring
it functions in all types of weather conditions. The unit can be purchased with or without satellite navigation capabilities. The S320 Shotsaver was selected by a third party as the base unit for an
outdoor leisure navigation product that provides ski trails, hiking trails and other features to outdoor enthusiasts.

2009
marked the 30th anniversary of the Snooper brand and to commemorate this event, the 3Zero was launched. The 3Zero is the first unit from Snooper that combines GPS and
radar/laser technology in one portable device. The 3Zero will alert the owner to all types of radar and laser units as well as detecting all fixed speed camera sites utilizing the unique
Pan-European AURA database.

The
SPT200 is a personal tracking device that uses GPS, GPRS and GSM technology to monitor the location of any boat, vehicle or individual with an accuracy of 2.5 meters. The SPT220 is
an ultra-compact portable tracker designed specifically for pets.

The
2010 product line for personal navigation includes the following new products:



PPL markets speed camera detection devices, including the Snooper Sapphire and the Snooper Evolution, which uses GPS location technology and
the AURA database to alert drivers to upcoming speed camera and hazard locations. In the first quarter of 2009 the Snooper Lynx GPS detector was introduced. This unit
uses GPRS technology to allow two way communications between the end user and PPL's new AURA database. AURA Live allows the end user to be advised of all new speed camera
locations and other hazards without the need to download information. Updates are sent automatically to the end user's unit and can also be shared by other users in the immediate vicinity building up
a "community" of users who can exchange live information.

In
2010, the Snooper Pantera will replace the Snooper S2. The Snooper Pantera is a GPS speed camera detector with speed sensitive alerts designed to help improve concentration and to help
navigate UK, roads more safely by providing advance warnings of all fixed speed safety cameras.



PPL markets the proprietary AURA database that provides drivers with advance notice of upcoming speed camera and hazard locations. The database
provides a competitive advantage, for unlike database capabilities of competitors, the AURA database is updated on a daily basis and makes information available to its subscribers 24 hours a
day, 7 days a week, thereby making new speed camera locations readily available to customers.



In 2009 PPL expanded its product range to a number of other areas where management considered there was a potential market. These products included
the following:



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Available Information

The Company's website address is "www.cobra.com". The Company's annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are
available free of charge through our website, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the "SEC"). We
include our website address in this annual report on Form 10-K only as an inactive textual reference and do not intend it to be an active lead to our website.

Item 1A.    Risk Factors

This section identifies certain risks and uncertainties that the Company faces. If the Company is unable to appropriately address these and other
circumstances that could have a negative effect on its business, the Company's business may suffer. Negative events may decrease revenues, increase costs, negatively affect financial results and
decrease financial strength, thereby, causing the price of the Company's stock to decline.

Business, financial condition or results of operation could be adversely affected by the inability to enhance existing products or introduce new products to meet consumer
preferences, including timely introductions as new consumer technologies are introduced.

Management believes that the Company's future success depends upon its ability to predict and respond in a timely and effective manner to changes in
the markets it serves. Consequently, the Company strives to introduce distinctive new products that anticipate changing consumer demands and capitalize upon emerging technologies. If the Company fails
to introduce or suffers delays in introducing new products, misinterprets consumer preferences or fails to respond to changes in the marketplace, consumer demand for our products could decrease and
our brand image could suffer. In addition, competitors may introduce new designs or technologies, undermining our products' desirability. If any of the foregoing occurs, our business, financial
condition or results of operations could be materially harmed.

Failure to maintain relationships with key customers and failure by key customers to purchase expected quantities of our products could have an adverse effect on our
business.

Cobra products are distributed through a network of nearly 300 retailers and distributors in the United States and 38 distributors in Europe and
elsewhere around the world. PPL products are sold through a network of 1,400 retailers and distributors in Europe. The Company's success is dependent upon the ability to retain an existing base of
customers to sell the Company's products. Loss of customers means loss of product placement and, consequently, a possible reduction in sales volume.

Certain
of the Company's customers account for a large portion of the Company's net sales. For instance, in 2009, sales to Wal-Mart were 15.4 percent of net sales. We anticipate
that Wal-Mart will continue to account for a significant portion of our net sales in the foreseeable future. Customers are not obligated by any firm, long-term purchase
commitments for our products. As a result, customers may cancel purchase commitments or reduce or delay orders on relatively short notice. The loss of sales to, or a material delay in orders from, our
key customers could materially harm our business, financial condition and results of operations.

If the Company is unable to obtain sufficient amounts of high quality products on a timely basis, customer needs may not be met and reduced sales may result.

Substantially all products are manufactured by third party manufacturers located outside of the United States, primarily in China, Hong Kong and
South Korea. The ability to meet customers' needs depends on the ability to maintain an
uninterrupted supply of products from multiple third party manufacturers. While the Company purchases most products from multiple third party manufacturers, business, financial condition or results of
operations could be adversely affected if any of the principal third party manufacturers experience production problems, lack of capacity or transportation disruptions. In addition, certain of our
third party manufacturers serve other customers, a number of which have greater production requirements than we do. As a result, third party manufacturers could determine to prioritize production
capacity for other customers or reduce or eliminate services for us on short notice. The extent to which changes in third party manufacturers would have an adverse effect on the Company's business
depends upon the timing of the changes, the product or products that the third party manufacturers produce and the volume of production.

Dependence
on third party manufacturers for products subjects the Company to the risk of supplier failure and customer dissatisfaction with the quality or performance of such products. Quality or
performance failures by third party manufacturers or changes in their financial or business condition which affect their production could disrupt the ability to supply quality products to customers
and thereby materially harm our business, financial condition and results of operations.

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Shortages of components and materials may disrupt the supply of products.

The inability of third party manufacturers to obtain sufficient quantities of components and other materials used in our products could disrupt the
supply of products or increase costs. Materials and components for some products may not be available in sufficient quantities to satisfy sales requirements as a result of supply shortages. Supply
interruptions relating to products could result in lost sales opportunities which may harm our business, financial condition and results of operations.

Reliance on retailers and third party distributors to sell our products.

Cobra products are sold through a network of nearly 300 retailers and distributors in the United States and 38 distributors in Europe and elsewhere
around the world. PPL products are sold through a network of 1,400 retailers and distributors in Europe. Certain distributors market competitors' products. The loss, termination or failure of one or
more of the distributors to effectively promote our products could affect the Company's ability to bring its products to market and could reduce sales. Changes in the financial or business condition
of these distributors and retailers could also affect the level of their purchases of our products which could materially harm our business, financial condition and results of operations.

The Company competes with a large number of companies in the consumer electronics business, and if we are unable to compete effectively, our business, financial condition
and results of operations may be materially affected.

The Company encounters strong competition from a number of companies in the consumer electronics business. Some of our current and potential
competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial resources than we do. Competition is based principally on the
introduction of new products and pricing. Competitors may have greater resources and operating and financial flexibility to introduce new products and withstand changes in pricing. To compete for
sales, the Company may have to lower its prices or increase its investment in development of new
technologies, which could reduce gross margin and adversely affect our business, financial condition and results of operations. There is no assurance that the Company will continue to compete
effectively against existing and new competitors that may enter our markets.

A downturn in global economic and market conditions could negatively impact our business, financial condition and results of operations.

The consumer electronics products sold by the Company are generally discretionary purchases for consumers. Consumer spending is affected by many
factors, including consumer confidence levels, interest rates, tax rates, employment levels and prospects and other general economic conditions. The current economic slowdown and recession in the
United States and worldwide economies has and could continue to decrease the demand for products and adversely affect sales. Since economic and market conditions vary within the Company's business
segments, the Company's future performance by business segment will accordingly vary. In addition, deteriorating or weak economic conditions, or the forecast or perception of the same, may trigger
changes in inventory levels at our retail customers, including a reduction in product offerings and out of stock situations, which may adversely affect our results of operations. Also, the cash
surrender value of life insurance policies owned by the Company for the purpose of recovering the costs of deferred compensation programs for several current and former officers of the Company is
affected by the market value of the underlying investments. Adverse market conditions may result in a decline in the cash surrender value of these life insurance policies, which would result in a
non-cash expense that reduces our net income and would also reduce the collateral base available for our secured credit facility.

International markets expose us to political and economic risks in foreign countries, as well as to risks relating to currency values and import/export policies.

Substantially all of our products are manufactured to our specifications and engineering designs by suppliers located primarily in China, Hong Kong
and South Korea. In addition, international sales, primarily in Canada and Europe, represent a significant portion of our total sales. International activities pose risks not faced by companies that
limit themselves to the United States market. These risks include:



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Revenues
and purchases are predominately in U.S. dollars; however, a portion of revenue is collectible in other currencies, principally euros and British pound sterling. The Company historically has
negotiated substantially all of its purchases in U.S. dollars and, in the case of PPL, frequently uses forward contracts to purchase dollars at a fixed exchange rate to the British pound sterling. The
Company considers opportunities to make purchases in other currencies, such as the euro, to the extent that doing so would be advantageous in light of currency fluctuations involving the U.S. dollar
and other currencies. As sales expand in international markets, customers may increasingly make payments in currencies other than U.S. dollars, which could have a considerable effect on margins. The
Company frequently hedges foreign currency fluctuations; however, it may not be able to fully hedge against the risks of such fluctuations and future exchange rate fluctuations could materially affect
our operating results.

The Company is subject to various governmental regulations that could adversely affect the business.

The Company's operations are subject to various federal, state and local regulatory requirements, including those relating to environmental, health
and safety matters. The Company could become subject to liabilities as a result of a failure to comply with applicable laws and could incur substantial costs to comply with existing or new, more
stringent regulations. In addition, the use of the Company's products is also governed by a variety of federal, state and local regulations, including the regulations of the Federal Communications
Commission, and changes in such regulations may affect demand for our products.

The Company is subject to governmental regulation in the countries in which it operates.

The Company's business is subject to governmental regulations in the countries in which it operates. From time to time, such governments may consider
proposed legislation relating to the regulation of products that we or our subsidiaries sell. The loss of sales as a result of any such regulations and any similar legislation could materially harm
our business, financial condition and results of operations.

Mobile navigation devices and other GPS-enabled products depend upon a network of satellites maintained by the United States Department of Defense. If
these satellites become inoperable or the policies of the United States regarding civilian use of the GPS system change, there would be a material effect on our business.

The global positioning system capabilities of our products function through a network of satellites launched, operated and maintained by the United
States Department of Defense. Should the satellites or underlying support systems become inoperable or if the United States government were to choose to degrade the quality of signals available to
civilians, GPS products will not function as designed and there would likely be an adverse effect on demand for these products. Additionally, the Department of Defense does not currently charge
users for access to the signals used by these devices and any move to do so could affect the economics of our business.

If we are unable to enforce or defend our rights with respect to intellectual property, our business may be adversely affected.

The Cobra trademark is a key factor in the marketing of our products. Trademark protection with respect to the Cobra trademark in the United States
could be subject to challenge in some product areas. In addition, the Company may not be able to obtain trademark protection for the Cobra trademark in each country in which it sells products. If we
are unable to use the Cobra trademark with respect to some products or in some markets, our results of operations could be adversely affected.

The
Snooper trademark is a well-known trademark in the United Kingdom and Europe and contributes to the success of PPL. If we are unable to use the Snooper trademark in the United Kingdom
or in other areas where PPL is expanding its business, our results of operations could be adversely affected.

The
Company licenses patents for use in certain of our products, particularly navigation products. If the patents are challenged, or third parties claim that products infringe upon the intellectual
property rights of others, the Company may incur significant costs to defend its intellectual property rights and may not ultimately be successful. If any of our products are determined to have
infringed upon the intellectual property rights of others, the Company may face substantial damages as well as injunctive relief which could effectively block our ability to market these products in
the United States and abroad. Such a judgment could materially harm our business, financial condition and results of operations.

We may be required to record impairment charges for intangible assets in future periods.

The carrying value of intangible assets totaled $10.8 million at December 31, 2009. We test for impairment whenever evidence of
impairment exists. Impairment charges, which will reduce net income and may have material adverse effect on financial results, will be recorded when warranted by our financial performance or market
conditions.

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Our profitability and financial condition depend on our ability to collect on amounts due from customers.

We have significant accounts receivable due from customers. It is not uncommon for a customer to suspend payments of amounts due if the customer
experiences operational difficulties. A customer experiencing severe operational difficulties may file for bankruptcy. In these cases, we may be unable to collect on that customer's outstanding
accounts receivable balance. The failure of our customers to pay amounts due could negatively affect our business, financial condition and results of operations.

Our secured credit facility contains restrictive covenants and our failure to comply with those restrictions could result in a default, which could have a material adverse
effect on our business, financial condition and results of operations.

Our secured credit facility is our principal source of available liquidity, other than cash generated by operations. As of December 31, 2009,
we had $17.9 million of outstanding indebtedness under our credit facility. In March 2010, we amended the Loan Agreement and decreased the principal amount available for borrowing from
$28 million to $23 million. As of December 31, 2010 the loan commitment will be reduced to $20 million. Our credit facility contains a number of significant restrictions
that limit our ability to, among other things, do the following:

The
secured credit facility also requires compliance with certain financial covenants. A breach of the covenants contained in the credit facility could result in any outstanding indebtedness under the
credit facility becoming immediately due and payable and in our inability to borrow additional funds under the credit facility, either of which could adversely affect our business, financial condition
and results of operations. Cobra failed to comply with the covenants in its amended loan agreement for the third and fourth quarters of 2009 and received a waiver from its lenders in each instance
(see Note 24,Subsequent Eventsto the Company's financial statements included herein). There can be no assurance that waivers would be granted
in the future if covenants are breached.

Our inability to secure credit that we may require in the future may negatively impact liquidity.

In the current credit environment it is increasingly difficult for businesses to secure financing. If we require additional financing in the future,
we may be unable to secure financing or may only be able to secure financing on terms which could have a material adverse effect on our business, financial condition or results of operations.

Economic conditions may limit the access to credit needed by our customers and suppliers.

Our business may be adversely impacted by the availability of credit and consumer spending rates. Recent deterioration of national and global
economic conditions and its impact on the credit environment could materially adversely impact our business, financial condition or results of operations. The financial stability of our customers or
suppliers may be compromised, which could result in additional bad debts for the Company or non-performance by suppliers. Uncertainty about current global economic conditions and the
higher costs or unavailability of credit may cause consumers of our products to postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values. In
some cases our customers or suppliers may be unable to stay in business. This could have a material adverse impact on the demand for our products and on our business, financial condition and operating
results.

Sales of our products are subject to seasonal variations and, as a result, our quarterly operating results may fluctuate and may not be a reliable indicator of our future
performance.

Because mass retail accounts make up an increasing portion of the business, sales orders in the fourth quarter frequently are stronger than orders in
first, second and third quarters. Consequently, you should not rely on our results of operations during any particular quarter as an indication of our results for a full year or any other quarter. In
addition, if investors inaccurately estimate our results of operations in one or more future quarters and our operating results fall below expectations, our stock price may decline.

The price of our common stock may be subject to sudden decreases due to the inherent volatility of operating and competitive factors.

The market price of the Company's common stock may be highly volatile and subject to wide fluctuations in response to various factors. We have
experienced extreme price and volume fluctuations with respect to the Company's common stock. The market price of our common stock is dependent upon, but not limited to:

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These
factors may adversely affect the trading price of our common stock, regardless of our actual operating performance, and could prevent our stockholders from selling their common stock at or above
the price at which they purchased it. In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating
performance of companies. In the past, some stockholders have brought securities class action lawsuits against companies following periods of volatility in the market price of their securities. We may
in the future be the target of similar litigation. Securities litigation, regardless of whether we are ultimately successful, could result in substantial costs and divert management's attention and
resources.

The loss of key members of our management and technical team may adversely affect our business.

The Company's success depends on the performance of key management, sales, technical and other critical personnel and our ability to continue to
attract, motivate and retain management and highly qualified key personnel. Failure to do so could disrupt our operations, adversely affect customer relationships and impair the ability to
successfully implement and complete Company initiatives. The loss of any services of any key management or technical personnel could make it more difficult to successfully pursue business goals. In
addition, the Company may not be as successful as its competitors at recruiting, assimilating and retaining key personnel.

Our performance depends on favorable relations with our employees and our ability to attract and retain them. Any deterioration of those relations, increase in labor costs
or inability to attract and retain employees could adversely affect our business, financial condition and results of operations.

Any significant deterioration in employee relations, increases in labor costs or shortages of labor at any facility could have a material adverse
effect on our business, financial condition and results of operations. As of December 31, 2009, none of our employees were covered by collective bargaining agreements. A slowdown or work
stoppage at one facility that lasts for a significant period of time could cause lost sales and increased costs and could adversely affect the Company's ability to meet customers' needs.

Business could be adversely affected by a disruption to our Chicago, Illinois and Runcorn, UK facilities.

Our Chicago, Illinois facility accounts for 80 percent of the total space utilized by the Company or 91 percent of the space utilized
by the Cobra segment. The Runcorn, UK facility accounts for 12 percent of the total space or 100 percent of the space utilized by the PPL segment. Therefore, any disruption to our
operations at either of these facilities could adversely impact our performance and impair our ability to deliver products and services to customers on a timely basis. Operations at the Chicago,
Illinois and Runcorn, United Kingdom facilities could be disrupted in the event of:

Any
disruption could damage the Company's reputation and cause customers to cease purchasing products from the Company. The Company could be subject to claims or litigation with respect to these
losses. The Company's property and business interruption insurance may not adequately compensate us for all of the losses that we may incur.

Damage to or disruptions in the operations of our computer infrastructure and software systems could harm our business, financial condition and results of operations.

The unavailability of any of our information management systems for any significant period of time could have a material adverse effect on our
operations. In particular, our ability to deliver products to our customers when needed, collect receivables and manage inventory levels successfully largely depends on the efficient operation of our
computer hardware and software systems. Our information management systems are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to computer
viruses, security breaches, energy blackouts, natural disasters, terrorism, war and telecommunication failures. There also may be system or network disruptions if new or upgraded business management
systems are defective or are not installed properly. Any system failure or security breach could negatively impact our business and results of operations. In addition, we may incur additional costs to
remedy the damages caused by these system failures or security breaches.

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Table of Contents

Our internal controls over financial reporting may not be considered effective, which could result in possible regulatory sanctions and a decline in our stock price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to furnish annually a report on our internal controls over financial reporting. The
internal control report must contain an assessment by our management of the effectiveness of our internal controls over financial reporting (including the disclosure of any material weakness).
Effective for the fiscal year ending December 31, 2010, the independent auditors will be required to attest to and report on internal controls. The Sarbanes-Oxley Act requires, among other
things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. In order for management to evaluate our internal controls, the Company must
regularly review and document its internal control
processes and procedures and test such controls. Ultimately, the Company or its independent auditors could conclude that our internal control over financial reporting may not be effective if, among
others things:

Due
to the number of controls to be examined, the complexity of the project, and the subjectivity involved in determining the effectiveness of controls, we cannot be certain that, in the future, all
of our controls will be considered effective by management or, if considered effective by our management, that our auditors will agree with such assessment.

If,
as required by the Sarbanes-Oxley Act, the Company or its auditors are unable to assert that its internal control over financial reporting is effective, the Company could be subject to regulatory
sanctions or lose investor confidence in the accuracy and completeness of the financial reports, either of which could have an adverse effect on the market price for the Company's common stock.

The Company may be unable to successfully consolidate and integrate the operations of acquired businesses, such as PPL, which may adversely affect the Company's stock price,
operating results and financial condition.

The Company must consolidate and integrate the operations of acquired businesses with our business. In 2006, the Company completed the acquisition of
PPL, a consumer electronics company based in the United Kingdom. The success of any acquisition, including the acquisition of PPL, will depend on our ability to integrate assets acquired and personnel
in these transactions. Integration efforts often take a significant amount of time, place a significant strain on our managerial, operational and financial resources and could prove to be more
difficult and expensive than we predicted. The diversion of our management's attention and any delays or difficulties encountered in connection with any acquisitions, including the acquisition of PPL,
and any future acquisitions that may be consummated, could result in the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that could negatively
affect our ability to maintain relationships with customers, suppliers, employees and others with whom the Company has business dealings.

Effects of climate change on the Company's business.

Global warming could result in a significant reduction in demand for certain of the Company's products, such as radar detectors and Citizens Band
radios, as surface transportation is constrained by flooding of coastal areas making roads and highways impassable.

Item 1B.    Unresolved Staff Comments

None.

Item 2.    Properties

The Company's office and warehouse facilities in the United States, Hong Kong and Europe are as follows:

Segment

Location

Owned or Leased

UtilizationCobra

Chicago, Illinois

Owned

Office and warehouse spaceCobra

Kowloon, Hong Kong

Leased

Office spaceCobra

Dublin, Ireland

Leased

Office SpaceCobra

Gent, Belgium

Leased

Warehouse spacePPL

Runcorn, United Kingdom

Leased

Office and warehouse space


Item 3.    Legal Proceedings

The Company is subject to various unresolved legal actions and proceedings, which arise, in the normal course of its business. None of these actions
is expected to have a material adverse effect on the Company's financial condition or results of operations.

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Table of Contents

Item 4.    Reserved

Executive Officers of the Registrant

The executive officers of the Company are as follows:

Name, Age and
Present Position

Has Held Present
Position SinceJames R. Bazet, 62,
    Chairman of the Board, President and
    Chief Executive Officer
    (Also a director)

Jan. 1998Anthony Mirabelli, 68,
    Senior Vice President,
    Marketing and Sales

Feb. 1997Michael Smith, 56,
    Senior Vice President
    and Chief Financial Officer

Jan. 2001Gerald M. Laures, 62,
    Vice President-Finance
    and Corporate Secretary

Mar. 1994


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Table of Contents

PART II

Item 5.    Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

The Company's common stock trades on The NASDAQ Stock Market under the symbol COBR. As of March 5, 2010, the Company had approximately 499
shareholders of record and approximately 949 shareholders for whom securities firms acted as nominees. The Company's common stock is the only class of equity securities outstanding.

STOCK PRICE RANGE AND DIVIDENDS2009

2008

2007Quarter

High

Low

Dividends
Declared

High

Low

Dividends
Declared

High

Low

Dividends
DeclaredFirst

$
1.46

$
0.81

$


$
5.42

$
3.32

$
0.16

$
10.95

$
8.75

$
0.16Second


1.90


0.86





3.69


2.51





10.72


9.16


Third


1.82


1.03





3.19


1.94





10.06


6.14


Fourth


1.80


1.27





2.63


0.75





6.75


4.11


Year


1.90


0.81





5.42


0.75


0.16


10.95


4.11


0.16


---

Item 6.    Selected Financial Data

The following table sets forth the Company's financial data for each of the past five years. You should read this information together with the
consolidated financial statements and notes to those statements included in Item 8 of this Annual Report on Form 10-K and the information set forth under the caption Management's Discussion and Analysis of Financial
ConditionandResults of Operationsin Item 7
of this Annual Report on Form 10-K.

Year Ended December 31

2009

2008

2007

2006*

2005(in thousands, except per share amounts)Operating Data:Net sales

$
105,229

$
124,745

$
155,935

$
153,695

$
133,084Net (loss) earnings


(10,272
)

(18,839
)

(4,422
)

(1,630
)

11,984Net (loss) earnings per share:Basic

$
(1.59
)
$
(2.91
)
$
(0.68
)
$
(0.25
)
$
1.86Diluted


(1.59
)

(2.91
)

(0.68
)

(0.25
)

1.81Dividends per share

$


$
0.16

$
0.16

$
0.16

$
As of December 31:Total assets

$
75,703

$
78,998

$
114,318

$
116,758

$
92,922Bank debt


17,869


17,671


19,985


16,674





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Table of Contents

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following management's discussion and analysis should be read in conjunction with the Company's audited Consolidated Financial Statements and
Notes thereto included elsewhere in this Form 10-K, and any forward-looking statements contained herein or elsewhere in this Form 10-K involve risks,
uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those
presented underRisk Factorsin Item 1A in this Form 10-K and elsewhere herein.

Executive Summary

For 2009, the Company had a net loss of $10.3 million, or $1.59 per share, compared to a net loss of $18.8 million, or $2.91 per share,
in 2008. The loss in 2009 included a net tax valuation allowance charge of $8.4 million. The loss in 2008 included an impairment charge for goodwill of $20.1 million.

The
following is a summary of the significant highlights related to the net loss in 2009 compared to 2008:



Outlook

The Company's outlook for 2010 is favorable. The Company's business is subject to economic cycles and retail industry conditions both domestically
and internationally. Spending on purchases for discretionary items, such as the Company's Citizens Band and two-way radios, radar detectors and other consumer electronic products, tends to
decline during recessionary periods and be focused on lower price point products. In 2009 the economic environment in the U.S., Canada and Europe, where substantially all of the Company's sales occur,
had deteriorated, resulting in an adverse impact on consumer spending for discretionary products, particularly those at higher price points, as store traffic declined at the mass merchants, consumer
electronics specialty stores, large department store chains, warehouse clubs and travel center chains that sell the Company's products. For 2010, the Company believes there will be a modest global
economic recovery with a rebound in consumer spending for discretionary items, including ones at higher price points, although continuing high unemployment will act to moderate this consumer spending
rebound. This modest improvement in the global economy, together with growth achieved through expanded distribution in Europe and new product introductions, is anticipated to generate an increase in
net sales and favorable product mix is expected to provide an increase in gross margins. The Company will continue to receive the positive effect of lower overhead costs achieved by the cost reduction
steps taken in 2009, including a work force reduction and elimination of certain fixed marketing, general and administrative expenses.

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Table of Contents

EBITDA

The Company's EBITDA showed a substantial improvement in 2009 because of a lower net loss; however, EBITDA As Defined declined in 2009. The following
table shows the reconciliation of net income to EBITDA and EBITDA As Defined:

Year Ended December 312009

2008(in thousands)Net (loss) income

$
(10,272
)
$
(18,839
)Depreciation and amortization


3,883


5,296Interest expense


928


997Income tax provision


6,762


598EBITDA


1,301


(11,948
)Stock option expense


229


253CSV (gain) loss


(743
)

1,558Non-controlling interest


2


11Deferred revenue, database


755


426Impairment





20,350Other non-cash items


(435
)

(300
)EBITDA As Defined

$
1,109

$
10,350


EBITDA
represents earnings before interest, taxes, depreciation and amortization. EBITDA As Defined, represents EBITDA plus the applicable adjustments required to agree with the EBITDA measurement for
compliance with the financial covenants of the Company's lenders. The Company believes EBITDA is a useful performance indicator and is frequently used by management, securities analysts and investors
to judge operating performance between time periods and among other companies. The Company uses EBITDA As Defined to assess operating performance and ensure compliance with financial covenants.

EBITDA
and EBITDA As Defined are Non-GAAP performance indicators that should be used in conjunction with Generally Accepted Accounting Principles ("GAAP") performance measurements such as
net sales, operating profit and net income to evaluate the Company's operating performance. EBITDA and EBITDA As Defined are not alternatives to net income or cash flow from operations determined in
accordance with GAAP. Furthermore, EBITDA and EBITDA As Defined may not be comparable to the calculation of similarly titled measures reported by other companies.

Results of Operations  2009 Compared to 2008

The following table contains sales and pre-tax profit (loss) after eliminating intercompany accounts by business segment for the years
ended December 31, 2009 and 2008.

2009

2008

2009 vs. 2008
Increase (Decrease)(in thousands)Business Segment

Net
Sales

Pre-tax
(Loss)
Profit

Net
Sales

Pre-tax
Profit

Net
Sales

Pre-tax
(Loss)
ProfitCobra

$
93,305

$
(3,596
)
$
110,846

$
(559
)
$
(17,541
)
$
(3,037
)PPL


11,924


88


13,899


(17,671
)

(1,975
)

17,759Total Company

$
105,229

$
(3,508
)
$
124,745

$
(18,230
)
$
(19,516
)
$
14,722


Cobra Business Segment

Net sales of the Cobra segment decreased in 2009 by $17.5 million, or 15.8 percent, to $93.3 million from $110.8 million
in 2008. Sales were adversely affected by the economic conditions that resulted in reduced store traffic, reduced consumer spending for discretionary items and the consumer preference for lower
price-point items. Lower domestic sales made up much of the decline, with Citizens Band radio and detection sales declining 19.9 percent and 27.2 percent, respectively. The decline in
Citizens Band radios reflected the recession's negative impact on freight traffic, which fell markedly resulting in a reduction in the disposable income of professional drivers and directly impacting
sales of Citizens Band radios, especially those at higher price points. Detection sales declined not only because of reduced demand by consumers and their switch to purchases of lower price-point
models but also because of a store-count reduction by a major retailer, the decision by a major retailer not to repeat a radar promotion with any vendor in 2009 and the bankruptcy and liquidation of
Circuit City in 2008, which accounted for more than 4.0 percent of radar detection sales in 2008. Partially offsetting these declines were strong sales of the new mobile navigation product for
the professional driver and an 11.9 percent

16

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Table of Contents

increase
in sales of two-way radios because of an exclusive supply agreement with a major retailer. International sales, mainly two-way radios and detection products to Canada
and Europe, were down 35.1 percent due to the adverse economic conditions in these markets.

Cobra's
gross profit decreased to $22.7 million in 2009 from $31.0 million in 2008 while the gross margin was 24.3 percent and 28.0 percent in 2009 and 2008, respectively.
Margin declines were experienced both domestically and in Europe due primarily to an unfavorable sales mix as the recession caused consumers to become very price conscious and focus diminished
discretionary spending on purchases of lower price-point, lower margin products. Especially impacted were sales of domestic detection products as the average selling price in 2009 declined
7.6 percent compared to the prior year. The gross margin for domestic Citizens Band radios also experienced compression because of the shift in discretionary spending by price conscious
professional drivers as unit sales of higher-price point models sold to professional drivers fell over 40 percent in 2009 compared to 2008, a rate that was more than twice that of the decline
in unit sales of lower-price point models. Also contributing to the decrease in Cobra's gross margin was a 76.7 percent increase in certain sales promotion funds that are accounted for as a
reduction in sales in order to help maintain sales in the difficult economy and the impact of the fixed components of the cost of sales being expensed across a lower level of sales, which combined
reduced gross margin by approximately one point. Lastly, a weaker euro, down 5.2 percent compared to 2008, reduced gross margin on sales in Europe.

Selling,
general and administrative expenses for the Cobra segment decreased $3.1 million, or 10.6 percent, to $25.9 million in 2009 from $29.0 million in 2008 and, as a
percentage of net sales, were 27.8 percent and 26.2 percent in 2009 and 2008, respectively. Approximately half of the decrease was due to lower variable selling costs because of the
decline in sales while the remainder was due to lower fixed expenses, mainly resulting from cost savings measures implemented by management, including reductions in headcount and professional fees
with these savings partially offset by $238,000 of severance expense.

Included
in the Cobra segment 2009 pre-tax loss was interest expense of $928,000, which was a decrease of $69,000 from 2008, and other income of $600,000 compared to other expense of
$1.6 million in 2008. Interest expense decreased as a result of a lower weighted average interest rate for 2009 compared to 2008. The $2.2 million favorable swing in other income was due
primarily to a $743,000 gain on the cash surrender value of life insurance in 2009 compared to a $1.6 million loss on the cash surrender value of life insurance in 2008. The life insurance is
owned by the Company for the purpose of recovering the costs of deferred compensation programs for several current and former officers. Gains or losses arise because the investment vehicles in which
the cash was invested moved approximately up or down in value in line with the overall financial markets.

As
a result of the above, the Cobra segment had a pre-tax loss of $3.6 million in 2009 compared to a pre-tax loss of $559,000 in 2008.

Performance Products Limited Business Segment

PPL's net sales decreased in 2009 by $2.0 million, or 14.2 percent, to $11.9 million from $13.9 million in
2008. Substantially all of the decrease was due to a 15.6% weakening of the British pound sterling relative to the dollar.

Gross
profit decreased to $3.7 million in 2009 from $7.2 million in 2008 while the gross margin was 30.9 percent and 51.6 percent in 2009 and 2008, respectively. The
decrease in gross margin was due in part to the impact of the weaker British pound sterling noted above. Also contributing to the decrease in gross margin was a large decrease in high margin AURA
database sales. These fees declined as a result of an increase in the portion of sales made outside of the UK, where the consumer's purchase price includes unlimited downloads for competitive reasons,
and higher sales of new products that do not use AURA database downloads (such as GPS-enabled handheld navigation units designed for the outdoor enthusiast, which are available
under the Snooper brand as well as various third-party brands and provide skiers, runners, hikers and others with maps of trails and a record of their activities). The shift in sales made outside of
the UK reflected both the severity of the recession in the UK compared to other countries in Europe and PPL's successful efforts in expanding its distribution channels beyond its UK
core market. Additionally, in 2008 there was a large AURA database sale for smartphones that was not repeated in 2009. Air freight charges increased as PPL attempted to meet strong demand for its
satellite navigation products, principally the Truckmate product, a dedicated portable truck satellite navigation system for professional drivers.

Selling,
general and administrative expenses declined $1.0 million, or 20.0 percent, to $4.1 million in 2009 compared to $5.2 million in 2008, and, as a percentage of net
sales, were 34.8 percent and 37.3 percent, respectively. The decrease in selling, general and administrative expenses was due mainly to the previously discussed weaker British pound
sterling.

The
Company's low stock price in relation to book value triggered an impairment review as of December 31, 2008 of the $20.1 million of goodwill associated with the PPL acquisition. Based
on the year-end reconciliation of the book value to market capitalization, an impairment charge, equal to the goodwill balance at December 31, 2008, was recorded in the fourth
quarter of 2008.

As
a result of the above, the PPL segment had pre-tax income of $88,000 in 2009 compared to a pre-tax loss of $17.7 million in 2008.

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Income Taxes

For 2009, there was a tax provision of $6.8 million compared to a tax provision of $598,000 for 2008. During the second quarter of 2009,
management concluded that a deferred tax valuation allowance was required for its U.S. operation. This conclusion was based on the fact that the U.S. operation had sustained cumulative losses over the
past three years, was forecasted to have a loss in 2009 because of the recession and had no tax planning strategies available that, if implemented, would generate taxable income sufficient for the
U.S. operation to realize in full its net deferred tax assets within a reasonable time horizon absent a turnaround in the business. Accordingly, the Company recorded a charge of $9.6 million
for a valuation allowance in the second quarter of 2009. In the fourth quarter of 2009, the Company recorded a tax benefit of $1.2 million primarily for the valuation allowance release related
to a Federal tax refund of $974,000 resulting from a provision inThe Worker, Homeownership, and Business Assistance Act of 2009,enacted
November 6, 2009, which allows eligible businesses a one-time election to carry back net operating losses from 2008 or 2009 (but not both) for three, four or five years rather than
the standard two years. For the Company's remaining deferred tax valuation allowance, until themore likely than notrealization criteria can be met,
the Company will not report a U.S. tax benefit for any future pre-tax losses or a U.S. tax provision for any future pre-tax income. This does not affect tax reporting for CEEL
and PPL as each of these is in a separate, non-U.S. tax jurisdiction.

Beginning
in 2009, the Company intended to repatriate the future earnings of its Irish subsidiary (CEEL), which will increase the Company's effective tax on these earnings to reflect the higher U.S.
tax rate once the prior year's net operating loss is utilized and the valuation allowance is reversed. However, since CEEL generated an operating loss for 2009, no funds were repatriated to the U.S.
in 2009.

Results of Operations  2008 Compared to 2007

The following table contains sales and pre-tax profit (loss) after eliminating intercompany accounts by business segment for the years
ended December 31, 2008 and 2007.

2008 vs. 20072008

2007

Increase (Decrease)(in thousands)Business Segment

Net
Sales

Pre-tax
Profit
(Loss)

Net
Sales

Pre-tax
Profit
(Loss)

Net
Sales

Pre-tax
Profit
(Loss)Cobra

$
110,846

$
(559
)
$
141,180

$
(9,583
)
$
(30,334
)
$
9,024PPL


13,899


(17,671
)

14,755


784


(856
)

(18,455
)Total Company

$
124,745

$
(18,230
)
$
155,935

$
(8,799
)
$
(31,190
)
$
(9,431
)


Cobra Business Segment

Net sales of the Cobra segment decreased in 2008 by $30.3 million, or 21.5 percent, to $110.8 million from $141.2 million
in 2007. $9.2 million of the decrease was because of lower mobile navigation/GPS product net sales, due to the Company's change in 2007 in its North American mobile navigation strategy as
reflected below:

Mobile
Navigation/
GPS Products
Net Sales

Other
Products
Net Sales

Total
Net Sales(in thousands)2008

$
122

$
110,724

$
110,8462007


9,367


131,813


141,180Increase (decrease)

$
(9,245
)
$
(21,089
)
$
(30,334
)


Also
contributing to the decrease in the Cobra segment were lower sales of domestic detection, two-way radio and Citizens Band radios, which declined 19.3 percent,
33.9 percent and 15.5 percent, respectively. In part, these declines reflected the impact of the deepening recession on store traffic and consumer spending during the fourth quarter
holiday selling period and, in the case of Citizens Band radios, the effect of historically high fuel prices early in the year. Additionally, detection and two-way radio sales were
negatively impacted as a result of competitive pressures, especially for shelf space for these products at several mass retailers. Two-way radio sales were also adversely affected by the
declining emphasis on the category by retailers. Partially offsetting these declines were higher sales of power inverters, as a result of expanded distribution and increased promotional activity at
travel centers, and two-way radios in Canada because of increased placement, which helped continue Cobra's leading position in this market.

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Cobra's
gross profit increased to $31.0 million in 2008 from $25.4 million in 2007 while the gross margin was 28.0 percent and 18.0 percent, respectively. The higher gross
profit and margin was due mainly to an $8.2 million decrease in the gross loss from mobile navigation/GPS products as reflected below:

Mobile
Navigation/
GPS Products
Gross Profit
(Loss)(1)

Other
Products
Gross Profit
(Loss)

Total
Gross Profit
(Loss)(in thousands)2008 gross profit (loss)

$
(164
)
$
31,161

$
30,9972007 gross profit (loss)


(8,453
)

33,899


25,446Increase (decrease)

$
8,289

$
(2,738
)
$
5,5512008 gross margin


-134.4
%

28.1
%

28.0
%2007 gross margin


-90.2
%

25.7
%

18.0
%


(1)Expenses
for 2008 and 2007 were those estimated to be directly related to the mobile navigation/GPS products
and would not have been incurred absent sale of these products.


The
lower gross loss in 2008 for mobile navigation/GPS was primarily due to $7.5 million charged in 2007 to cost of sales for the change in the Company's North American mobile navigation
strategy as previously discussed. The $7.5 million cost of sales charge, which reduced the Cobra segment gross margin by 5.4 points, is summarized below (in thousands):

Product warranty and liquidation reserves

$
3,008Product software impairment


2,622Tooling, packaging and parts write-downs


1,243Inventory write-downs


676Charged to cost of sales

$
7,549


Excluding
the mobile navigation/GPS gross losses in 2008 and 2007, Cobra's gross margin would have increased to 28.1 percent in 2008 from 25.7 percent in 2007. Responsible for the
increase were improved gross margins for all of Cobra's core domestic products, principally because of the sale of new, higher margin products, as well as improved inventory management which reduced
obsolete inventory and airfreight expenses.

Selling,
general and administrative expenses for the Cobra segment decreased $4.8 million, or 14.3 percent, to $29.0 million in 2008 from $33.8 million in 2007 and, as a
percentage of net sales, were 26.2 percent and 24.0 percent, respectively. Almost half of the decrease was due to lower variable selling cost because of the decline in sales. The
remainder of the decrease was due to lower professional fees, especially accounting and tax fees which were higher in 2007 because of the PPL acquisition and compliance with new accounting rules as
well as legal fees that declined because of the elimination of mobile navigation patent work, and lower fixed sales and marketing cost due to headcount reductions and lower travel. Operating costs at
CEEL also declined because of a reduction in headcount and the favorable impact of a weaker euro.

Included
in the Cobra segment 2008 pre-tax loss was interest expense of $997,000, which was a decrease of $622,000 from 2007, and other expense of $1.6 million which was an increase
of $2.0 million from 2007. Interest expense decreased as a result of lower average interest bearing debt and lower interest rates. Other expense increased because of a $1.6 million loss
on the cash surrender value of life insurance, which is owned by the Company for the purpose of recovering the costs of deferred compensation programs for several current and former officers. The loss
was generated as the investment vehicles in which the cash was invested declined in value in line with the overall financial markets.

Performance Products Limited Business Segment

PPL's net sales decreased in 2008 by $856,000, or 5.8 percent, to $13.9 million from $14.8 million in 2007.
Impacting net sales in 2008 was the weakening of the British pound sterling, which reduced net sales in 2008 by approximately $762,000. In addition, sales in the third and fourth quarters were
adversely impacted by the significant decline in the UK economy. First-time sales of SD cards for smartphones offset lower sales of GPS-enabled speed camera location
detectors that declined because of a production problem for one popular model during the first half of 2008, which has since been overcome. Sales of personal navigation products increased due to the
introduction of the first dedicated portable truck satellite navigation system for professional drivers that use satellite navigation technology to incorporate width, height and weight limits to
create truck friendly routes.

Gross
profit increased $1.2 million to $7.2 million, or 51.6 percent, in 2008 from the $6.0 million, or 40.4 percent, for the prior year. The increase in gross
margin was due primarily to a mix impact as higher-margin sales of data (download fees and SD cards for smartphones) accounted for a larger portion of PPL's 2008 revenue.

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Selling,
general and administrative expenses declined in 2008 by $633,000, or 10.9 percent, to $5.2 million from $5.8 million in 2007. Expressed as a percentage of net sales,
selling, general and administrative expenses were 37.3 percent for 2008 compared to 39.4 percent for 2007. The decrease in selling, general and administrative expenses was due mainly to the weaker
British pound sterling as discussed above.

The
Company's annual impairment review as of October 1, 2008 was superseded by continued degradation of the financial markets and the Company's stock price. The Company's low stock price in
relation to book value triggered an impairment review of the goodwill associated with the PPL acquisition as of December 31, 2008. Based on the year-end reconciliation of the book
value to market capitalization, a $20.1 million impairment charge was recorded in the fourth quarter of 2008.

Income Taxes

The income tax provision for 2008 reflected a 3.3 percent effective tax rate for the 2008 tax expense compared to an effective tax rate of
50.0 percent for the 2007 income tax benefit. The $598,000 tax expense based on a pre-tax loss of $18.2 million was due to the non-deductibility of the cash
surrender value loss in the United States and the non-deductibility of goodwill impairment in the United Kingdom.

The
effective tax rate for 2007 was higher than the combined U.S. statutory rate of 38.9 percent because of minimal tax at CEEL on $1.5 million of taxable income as a result of the
reversal of a valuation allowance.

Beginning
with 2009, the Company's intent is to repatriate CEEL's future earnings for use for other corporate purposes, which will increase the Company's effective tax on these earnings
to reflect the higher U.S. rate.

Liquidity and Capital Resources

On February 15, 2008, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with The Private Bank and Trust Company,
as lender and agent, and RBS Citizens, N.A. for a $5.7 million term loan facility and a $40 million revolving credit facility. Both facilities mature on October 19, 2011 and
replaced the previous credit agreement.

At
December 31, 2009, the Company had interest bearing debt outstanding of $17.9 million, consisting of the $3.1 million term loan and $14.8 million in the revolver. As of
December 31, 2009, availability was approximately $4.9 million under the revolving credit line based on the asset advance formulas.

On
August 13, 2009, the Company entered into an amendment to the Loan Agreement. Pursuant to the amendment, the lenders waived the failure of the Company to comply as of June 30, 2009
with the financial covenants set forth in the Loan Agreement relating to Total Debt to EBITDA Ratio (as defined in the Loan Agreement) and Fixed Charge Coverage Ratio (as defined in the Loan
Agreement). In addition, the amendment decreased the maximum principal amount available to be borrowed by the Company pursuant to the revolving credit facility under the Loan Agreement from
$40 million to $28 million. The Company paid an amendment fee of $159,150, as well as certain fees and expenses, in connection with the execution of the amendment. The amendment also
amended the covenants set forth in the Loan Agreement to provide for the following financial covenants: minimum fixed charge coverage at revised levels from those contained in the Loan Agreement;
minimum cumulative EBITDA; and minimum tangible net worth.

Due
to the continued impact of the global economic downturn and the preference of retail and distribution customers to defer third quarter purchases to the fourth quarter, the Company did not satisfy
the financial covenants under the Loan Agreement for the third quarter of 2009. On November 2, 2009, the Company and the lenders under the Loan Agreement entered into an amendment to the Loan
Agreement. Pursuant to the amendment, which was effective as of October 24, 2009, the lenders waived the covenant violations. The Company paid an amendment fee of $50,000, as well as certain
fees and expenses of the lenders, in connection with execution of the amendment. As amended, the Loan Agreement requires lockbox agreements, which provide for all Company receipts to be swept daily to
reduce borrowings outstanding under the revolving credit facility. These agreements, combined with the existence of a material adverse change ("MAC") clause in the Loan Agreement, result in the
Revolving Credit Facility being classified as a current liability. The Company does not expect to repay, or be required to repay, within one year, the balance of its revolving credit facility, which
has a final expiration date of October 19, 2011. The MAC clause, which is a common requirement in commercial credit agreements, allows the lender to require the loan to become due if there has
been a material adverse change in the Company's financial condition, operations or other status. The classification of the revolving credit facility as a current liability results only because of the
combination of the lockbox agreements and the MAC clause.

As
a result of three key accounts deferring sales to early 2010, the Company violated the minimum EBITDA loan covenant for the fourth quarter of 2009 but was in compliance with the fixed charge
coverage and tangible net worth covenants. On March 12, 2010, the Company and the lenders under the Loan Agreement entered into an amendment to the Loan Agreement. Pursuant to the amendment,
which was effective as of March 9, 2010, the lenders waived the covenant violation. The Company paid an amendment fee of $50,000, as well as certain fees and expenses of the lenders, in
connection with execution of the amendment. The amendment also decreased the maximum principal amount available to be borrowed by the Company pursuant to the revolving credit facility under the Loan
Agreement from $28 million to $23 million and eliminated the minimum cumulative EBITDA covenant. Commencing December 31, 2010, the loan commitment will be reduced to
$20 million. The amendment provides for two covenants, fixed charge coverage and tangible net worth. The fixed charge coverage covenant requires that the Company maintain a Fixed Charge
Coverage

20

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Ratio
of 1.0 for the three quarter period ending March 31, 2010 and for the four quarter period ending June 30, 2010 and a Fixed Charge Coverage Ratio of 1.1 for each rolling four
quarter period thereafter. As of December 31, 2009, the Fixed Charge Coverage Ratio for the two quarter period ending on that date was 2.14. The tangible net worth covenant requires the Company
to maintain tangible net worth as of the end of each quarter to $13.4 million, an amount based on 90% of the Company's tangible net worth as of June 30, 2009, plus 50 percent of
consolidated net income (but with no reduction for net losses) for each quarter that preceded that quarter being measured, excluding any gains or losses associated with the cash surrender value of
life insurance. As of December 31, 2009, the Company had tangible net worth of $15.3 million as compared to a minimum requirement of $14.3 million.

Interest
on amounts borrowed under the Loan Agreement is based on the prime rate plus an applicable margin or LIBOR plus an applicable margin, with the applicable margin being determined based on the
Total Debt to EBITDA Ratio for the prior four quarters, with the further requirement that qualifying for a reduction from the currently stipulated applicable margin requires that the Company achieve
the designated Total Debt to EBITDA ratio for two consecutive quarters. The applicable margin based on the Total Debt to EBITDA Ratio of the Company as of September 30, 2009 was 2.0 percent for
prime rate loans and 4.5 percent for LIBOR loans. Availability under the revolving credit facility is calculated based on a borrowing base formula that includes 75 percent of eligible accounts
receivable, the lesser of 60 percent of lower of cost or market value of eligible inventory or 85 percent of the appraised orderly liquidation value of eligible inventory, and 60 percent of commercial
letters of credit issued for the purchase of inventory, subject to certain limitations and to reserves established at the lenders' discretion including but not limited to an availability reserve of
$2.5 million through September 30, 2009 and $3.0 million thereafter. The Loan Agreement requires an inventory appraisal, when deemed necessary by the lender, the results of which
could lead to a reduction in the availability based on inventory. The inventory appraisal conducted as of June 30, 2009 did not affect credit availability. The revolving credit facility
continues to be subject to an unused line fee of 0.5 percent and the term loan under the Loan Agreement is subject to quarterly principal payments by the Company of $310,000 for the quarter ending
September 30, 2009 and $440,000 for each quarter thereafter through September 30, 2011. The term of the Loan Agreement continues to extend until October 19, 2011. Borrowings under
the Loan Agreement are secured by substantially all of the assets of the Company except for equity interests in the non-U.S. subsidiaries.

On
October 20, 2006, Cobra Electronics UK Limited, a wholly-owned subsidiary of the Company, completed the acquisition of 100 percent of the issued and outstanding share capital of PPL.
Under the acquisition agreement, the purchase price for the issued share capital of PPL consisted of $21.2 million paid in cash at the closing of the transaction. The former shareholders of PPL
were eligible to receive additional cash consideration of up to approximately $6.5 million based on the achievement of certain performance targets by PPL for the twelve-month period ended
March 31, 2007 (the first earn-out period) and up to approximately $9.4 million for the fourteen-month period ended May 31, 2008 (the second earn-out
period). No additional consideration was paid to the former shareholders for the first earn-out period; the former shareholders were eligible to recapture all or a portion of this first
earn-out payment should the performance in the second earn-out period exceed the performance targets established for the payment of the entire second earn-out.
Additionally, the former shareholders could have earned additional consideration if the performance of PPL exceeded certain cumulative targets for the combined earn-out periods. The second
and final earn-out period in connection with the purchase agreement concluded on May 31, 2008. The aggregate amount of the final earn-out payment, which totaled
$8.5 million, was paid to the former shareholders on October 20, 2008 and was recorded as additional purchase price in goodwill.

Net
cash flows provided by operating activities were $1.3 million for the year ended December 31, 2009, compared to $15.0 million of net cash provided by operating activities in
2008. Significant net cash inflows from operations and non-cash
add-backs included the add-back of non-cash charges of $3.9 million for depreciation and amortization and $8.4 million for the deferred income taxes
valuation allowance, an increase in accounts payable of $4.4 million and a decrease in inventories of $1.6 million. These cash inflows were partially offset by an increase in receivables
of $3.9 million, an increase in other assets of $1.6 million and a gain on cash surrender value (CSV) life insurance of $743,000.

$2.7 million
of the depreciation and amortization related to the Cobra segment included $1.2 million of fixed asset depreciation, $946,000 of intangible amortization and $517,000 of
prepaid amortization. For the PPL segment, depreciation and amortization amounted to $1.2 million and included $909,000 of amortization for intangibles and other assets that resulted from the
allocation of the purchase price, and $301,000 of fixed asset depreciation. The increase in accounts payable was due to an increase in inventory that was in transit but not paid for at
December 31, 2009 as well as more favorable payment terms from a major supplier. The decrease in inventories was due to strong sales in the fourth quarter of 2009 and management's efforts to
carefully manage inventory levels in an uncertain economy. The increase in accounts receivables was due mainly to $4.5 million of higher net sales for the fourth quarter of 2009 compared to the
fourth quarter of 2008. The increase in other assets was mainly due to higher receivables at several vendors as a result of an increase in inventory returned to these vendors for partial credits
against similar, new models as well as more spending on world-wide trademark registrations and patents relating to the Company's newer products such as AURA and Bluetooth products. The
$743,000 gain on the cash surrender value of life insurance, owned by the Company for the purpose of recovering the cost of deferred compensation programs for several current and former officers, was
generated as the investment vehicles in which the cash was invested increased in value in line with the overall financial markets.

Working
capital requirements are seasonal, with demand for working capital being higher later in the year as customers begin purchasing for the holiday selling season. The Company believes that cash
generated from operations and from borrowings under its credit agreement will be sufficient in 2010 to fund its working capital needs.

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Net
cash used in investing activities amounted to $1.4 million in 2009, primarily for tooling.

Net
cash provided by financing activities amounted to $198,000, primarily for the advances of bank borrowings.

The
Company believes that for the foreseeable future, it will be able to continue to fund its operations with cash generated from operations using existing or similar future bank credit agreements to
fund its seasonal working capital needs. The Company expects to be in compliance with its debt covenants in 2010.



The payments for the Company's contractual commitments at December 31, 2009 were as follows:

Total

Less than 1 year

1 to 3 years

3 to 5 years

After 5 years(in thousands)Capital lease

$
108

$
48

$
60

$


$
Operating leases


2,125


537


702


481


405Purchase obligations (a)


18,393


18,049


344





Employment agreement obligations


405


50


355





Obligations under FIN 48


147


147Deferred compensation


6,840


68


636


1,399


4,737Term loan (b)


3,294


1,935


1,359





Revolving loan (b)


16,292


859


15,433





Total

$
47,604

$
21,693

$
18,889

$
1,880

$
5,142


(a)Purchase
obligations include commitments to purchase goods or services of either a fixed or minimum quantity including open purchase orders for finished
goods of $17,679.(b)Includes
interest of $214 for the term loan and interest of $1,503 for the revolving loan




The Company's significant accounting policies are discussed in the notes to the consolidated financial statements. The application of certain of
these policies requires significant judgments or a historical based estimation process that can affect the results of operations and financial position of the Company as well as the related footnote
disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable. If actual amounts ultimately differ from previous estimates, the revisions
are included in the Company's results of operations for the period in which the actual amounts become known.

Critical
accounting policies generally consist of those that are reflective of significant judgments and uncertainties and could potentially result in materially different results under different
assumptions. The accounting policies and estimates that may have a significant impact upon the operating results, financial position and footnote disclosures of the Company are as follows:



22

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23

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The
above listing is not intended to be a comprehensive list of all of the Company's accounting policies. In most cases, the accounting treatment of a particular transaction is specifically dictated
by accounting principles generally accepted in the United States. Refer to Note 1 to the Company's consolidated financial statements included under Item 8 of the Annual Report on
Form 10-K, which is incorporated herein by reference, for more information with respect to the Company's significant accounting policies.



Please refer to Note 2 in the consolidated financial statements, included under Item 8 of this Annual Report on
Form 10-K, which is incorporated herein by reference, for further information on the Company's new accounting standards.

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Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

Market risks related to changes in foreign currency exchange risks and interest rates are inherent to the Company's operations. Changes to these
factors could cause fluctuations in the Company's net earnings, cash flows and the fair values of financial instruments subject to market risks. The Company identifies these risks and mitigates the
financial impact with hedging and interest rate swaps.

Debt
incurred under a revolving loan agreement with a balance of $10.8 million as of December 31, 2009 is priced at an interest rate that floats with the market. Therefore, the fair
value of this debt is not significantly affected by changes in the interest rate market. A 50 basis point movement in the floating debt rate would result in approximately a $54,000 increase or
decrease in interest expense and cash flows. Also, the Company has $7.1 million of debt as of December 31, 2009 with a rate of interest that is fixed as a result of an interest rate
swap. Accordingly, fair value of this fixed-rate debt can be significantly affected by changes in the interest rate market.

The
Company's suppliers are located in China, Hong Kong and South Korea. The Company historically has negotiated substantially all of its purchases in U.S. dollars and, in the case of PPL, uses
forward contracts to purchase dollars at a fixed exchange rate to the British
pound sterling. The Company considers opportunities to make purchases in other currencies, such as euros, to the extent that doing so would be advantageous in light of currency fluctuations involving
the U.S. dollar and other currencies.

In
2009, approximately 24.2 percent of the Company's sales were outside the United States, principally in Europe and Canada, compared to 28.1 percent in 2008. The Company minimizes the
foreign currency exchange rate risk associated with relationships outside of the United States by conducting nearly all of its transactions in U.S. dollars, except for some billings of its European
business, which are conducted in euros and the billings of PPL which are primarily in British pound sterling. The Company does not use derivative financial or commodity instruments for trading or
speculative purposes, however, forward contracts are occasionally used for hedging a portion of the Company's European business' euro denominated transactions and hedging dollar purchases for PPL.
Please refer to Notes 9 and 10 in the consolidated financial statements, included under Item 8 of this Annual Report on Form 10-K, which is incorporated herein by
reference, for further information on the Company's financial instruments and derivatives. Since the Company did not have any open foreign exchange contracts at December 31, 2009, the impact of
a 10 percent movement in the U.S. dollar/pound sterling/euro exchange rates is not applicable.



This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 found at
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Additional written or oral forward-looking statements may be made by the Company from time to time in
filings with the SEC, press releases, or otherwise. Statements contained in this report that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act. Forward-looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future
operations, anticipated financing needs, compliance with financial covenants in loan agreements, liquidity, plans for acquisitions or sales of assets or businesses, plans relating to products or
services, assessments of materiality, expansion into international markets, growth trends in the consumer electronics business, technological and market developments in the consumer electronics
business, the availability of new consumer electronics products and predictions of future events, as well as assumptions relating to these statements. In addition, when used in this report, the words
"anticipates," "believes," "should," "estimates," "expects," "intends," "plans" and variations thereof and similar expressions are intended to identify forward-looking statements.

Forward-looking
statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Consequently, future events and actual
results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements contained in this report or in other Company filings, press releases, or
otherwise. Factors that could contribute to or cause such differences include, but are not limited to, unanticipated developments in any one or more of the following areas:

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Table of Contents

Readers
are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date set forth on the signature page hereto. The Company
undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after such date or to reflect the
occurrence of anticipated or unanticipated events.

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Item 8.    Financial Statements and Supplementary Data

Financial statements are included in this Annual Report on Form 10-K, as indicated in the index on page 53.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board
of Directors and Shareholders
Cobra Electronics Corporation and Subsidiaries

We
have audited the accompanying consolidated balance sheets of Cobra Electronics Corporation (a Delaware corporation) and Subsidiaries (the "Company") as of December 31, 2009 and 2008, and the
related consolidated statements of operations, shareholders equity and comprehensive income (loss) and cash flows for each of the three years in the period ended December 31, 2009. These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cobra Electronics Corporation and Subsidiaries as of
December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting
principles generally accepted in the United States of America.

/s/
Grant Thornton LLP

Chicago,
Illinois
March 15, 2010

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Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
Cobra Electronics Corporation
Years Ended December 31, 2009, 2008 and 2007
(In Thousands, Except Per Share Amounts)

2009

2008

2007Net sales

$
105,229

$
124,745

$
155,935Cost of sales


78,853


86,576


124,534Gross profit


26,376


38,169


31,401Selling, general and administrative expense


30,066


34,175


39,634Impairment of goodwill





20,084


Loss from operations


(3,690
)

(16,090
)

(8,233
)Interest expense


928


997


1,655Other (income) expense


(1,110
)

1,143


(1,089
)Loss before income taxes


(3,508
)

(18,230
)

(8,799
)Tax provision (benefit)


6,762


598


(4,396
)Less non-controlling interest


2


11


19Net loss

$
(10,272
)
$
(18,839
)
$
(4,422
)Net loss per common share:Basic

$
(1.59
)
$
(2.91
)
$
(0.68
)Diluted

$
(1.59
)
$
(2.91
)
$
(0.68
)Weighted average shares outstanding:Basic


6,471


6,471


6,458Diluted


6,471


6,471


6,458Dividends declared and paid per common share

$


$
0.16

$
0.16


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

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Table of Contents



CONSOLIDATED BALANCE SHEETS
Cobra Electronics Corporation
December 31, 2009 and 2008
(In Thousands Except Share Data)

2009

2008ASSETSCurrent assets:Cash

$
1,405

$
1,985Receivables, net of allowance for claims and doubtful accounts of $103 in 2009 and $107 in 2008


22,095


18,017Inventories, primarily finished goods, net


26,198


27,464Deferred income taxes, current





6,130Prepaid assets


2,438


1,705Other current assets


1,523


1,497Total current assets


53,659


56,798Property, plant and equipment, at cost:Buildings and improvements


5,707


5,996Tooling and equipment


17,746


21,51223,453


27,508Accumulated depreciation


(18,318
)

(21,962
)Land


230


230Property, plant and equipment, net


5,365


5,776Other assets:Cash surrender value of life insurance policies


4,051


3,034Deferred income taxes, non-current


1,717


2,004Intangible assets


10,769


11,218Other assets


142


168Total other assets


16,679


16,424Total assets

$
75,703

$
78,998LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Current maturities of long-term bank debt

$
16,549

$
1,370Accounts payable


7,427


2,923Accrued salaries and commissions


902


1,124Accrued advertising and sales promotion costs


1,392


1,174Accrued product warranty costs


857


897Accrued income taxes


73


495Deferred income taxes, current


1,728


Other accrued liabilities


2,524


2,584Total current liabilities


31,452


10,567Non-current liabilities:Long-term bank debt, net of current maturities


1,320


16,301Deferred compensation


6,772


6,516Deferred income taxes


1,935


1,983Other long-term liabilities


961


1,077Total non-current liabilities


10,988


25,877Total liabilities


42,440


36,444Commitments and contingencies





Shareholders' equity:Preferred stock, $1 par value 1,000,000 shares authorized





None issuedCommon stock, $.331/3 par value


2,345


2,34512,000,000 shares authorized7,039,100 shares issued6,471,280 shares outstandingPaid-in capital


20,583


20,354Retained earnings


16,033


26,305Accumulated comprehensive income


(1,889
)

(2,637
)37,072


46,367Treasury stock, at cost (567,820 shares)


(3,837
)

(3,837
)Total shareholders' equity  Cobra


33,235


42,530Non-controlling interest


28


24Total equity


33,263


42,554Total liabilities and shareholders' equity

$
75,703

$
78,998


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

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Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
Cobra Electronics Corporation
Years Ended December 31, 2009, 2008 and 2007
(In Thousands)

2009

2008

2007Cash flows from operating activities:Net loss

$
(10,272
)
$
(18,839
)
$
(4,422
)Adjustments to reconcile net loss to net cash flows from operating activities:Depreciation and amortization


3,883


5,296


7,925Tax valuation allowance


8,382





Goodwill impairment





20,084


Impairment  product software, tooling and packaging





266


3,031Deferred income taxes


(285
)

(1,005
)

(3,251
)Loss (gain) on cash surrender value (CSV) life insurance


(743
)

1,558


(17
)Stock-based compensation


229


253


223Loss on sale of assets


36





Tax benefit from stock options exercised








99Non-controlling interests


2


11


(19
)Changes in assets and liabilities:Receivables


(3,943
)

8,329


1,629Inventories


1,613


4,250


(3,720
)Other current assets


(1,030
)

1,162


681Other long-term assets


(520
)

1,888


(2,456
)Accounts payable


4,421


(4,142
)

1,128Accrued income taxes


(427
)

157


(2,029
)Accrued liabilities


(108
)

(4,357
)

843Deferred compensation


256


195


463Deferred income


(377
)

(310
)

(749
)Other long-term liabilities


188


212


(409
)Net cash provided by (used in) operating activities


1,305


15,008


(1,050
)Cash flows from investing activities:Capital expenditures


(1,095
)

(1,166
)

(1,558
)Premiums on CSV life insurance


(274
)

(312
)

(295
)Purchase of Performance Products Limited





(8,464
)

Net cash used in investing activities


(1,369
)

(9,942
)

(1,853
)Cash flows from financing activities:Bank borrowings


198


(2,314
)

3,311Dividends paid to shareholders





(1,035
)

(1,031
)Transactions related to exercise of stock options, net








288Other








29Net cash provided by (used in) financing activities


198


(3,349
)

2,597Effect of exchange rate changes on cash and cash equivalents


(714
)

(1,592
)

288Net (decrease) increase in cash


(580
)

125


(18
)Cash at beginning of year


1,985


1,860


1,878Cash at end of year

$
1,405

$
1,985

$
1,860Supplemental disclosure of cash flow information:Cash paid during the period for:Interest

$
936

$
1,008

$
1,873Income taxes, net of refunds

$
(449
)
$
(314
)
$
1,533


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

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Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)
Cobra Electronics Corporation
Years Ended December 31, 2009, 2008 and 2007
(In Thousands, Except Share Data)

Common
Stock

Paid-in
Capital

Retained
Earnings

Accumulated
Comprehensive
Income (Loss)

Treasury
Stock

TotalBalance  January 1, 2007

$
2,345

$
19,824

$
51,584

$
11

$
(3,995
)
$
69,769Comprehensive income (loss):Net loss








(4,422
)







(4,422
)Accumulated other comprehensive income 

















Foreign currency translation adjustment











227





227Interest rate swap, net of tax expense of $87











89





89Total comprehensive loss

















(4,106
)Dividends to shareholders








(1,031
)







(1,031
)Stock compensation expense





223











223Other








48








48Purchase 30,329 shares of treasury stock














(292
)

(292
)Transactions related to exercise of 68,171 options, net





(45
)







450


405Tax benefit from stock options exercised





99











99Balance  December 31, 2007


2,345


20,101


46,179


327


(3,837
)

65,115Comprehensive income (loss):Net loss








(18,839
)







(18,839
)Accumulated other comprehensive income 

















Foreign currency translation adjustment











(2,700
)




(2,700
)Interest rate swap, net of tax benefit of $203











(264
)




(264
)Total comprehensive loss

















(21,803
)Dividends to shareholders








(1,035
)







(1,035
)Stock compensation expense





253











253Balance  December 31, 2008


2,345


20,354


26,305


(2,637
)

(3,837
)

42,530Comprehensive income (loss):Net loss








(10,272
)







(10,272
)Accumulated other comprehensive income Foreign currency translation adjustment











877





877Interest rate swap, no tax benefit











(129
)




(129
)Total comprehensive loss

















(9,524
)Stock compensation expense





229











229Balance  December 31, 2009

$
2,345

$
20,583

$
16,033

$
(1,889
)
$
(3,837
)
$
33,235


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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cobra Electronics Corporation

Years ended December 31, 2009, 2008 and 2007

(1) Summary of Significant Accounting Policies

Business Cobra designs and markets consumer electronics products, which it sells
primarily under the Cobra brand name principally in the United States, Canada and Europe. Effective October 20, 2006, the Company acquired Performance Products Limited ("PPL")
which sells its products under the Snooper tradename, principally in the United Kingdom, as well as elsewhere in Europe. A majority of the Company's products are purchased from overseas suppliers,
primarily in
China, Hong Kong and South Korea. The consumer electronics market is characterized by rapidly changing technology and certain products may have limited life cycles. Management believes that it
maintains strong relationships with its current suppliers and that, if necessary, other suppliers could be found. The extent to which a change in a supplier would have an adverse effect on the
Company's business depends on the timing of the change, the product or products that the supplier produces for the Company and the volume of that production. The Company also maintains insurance
coverage that would, in certain limited circumstances, reimburse the Company for lost profits resulting from a supplier's inability to fulfill its commitments to the Company.

Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. The
consolidated entities are collectively referred to as the "Company". All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications Prepaid packaging and outside design costs were reclassified fromother current assetstoprepaid assetsfor the periods presented in the consolidated financial statements included in this Form 10-K. The
non-controlling interest reported in the Consolidated Balance Sheet as of December 31, 2009 is presented in accordance with the accounting guidance forNon-Controlling Interests.

Translation of Foreign Currency Assets and liabilities of consolidated foreign subsidiaries are translated into U.S. dollars at exchange
rates in effect at year- end. Revenues and expenses are translated at average exchange rates prevailing during the year. Gains or losses on foreign currency transactions and the related
tax effects are reflected in net earnings. The resulting translation adjustments are included in stockholders' equity as a component of accumulated comprehensive income.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period that are largely based on the current business conditions, including economic climate, revenue
growth, sales returns rates, net realizable value of returned products and changes in certain working capital amounts. The Company believes its estimates and assumptions are reasonable. However,
actual results and the timing of the recognition of such amounts could differ from those estimates.

Revenue Recognition Revenue from the sale of goods is recognized at the time of shipment, except for revenue from sales of products
to certain customers whose contractual terms specify FOB destination. Revenue from sales of products to these customers is recognized at the estimated time of receipt by the customer when title and
risk of loss would pass to the customer. Obligations for sales returns and allowances and product warranties are recognized at the time of sale on an accrual basis as described in the policies for Sales Returns
ReserveandWarranty Reserve. The Company bundles AURA database subscriptions with certain
detection and navigation products and classifies the database subscription as deferred revenue. Additionally, prepaid subscriptions to the AURA database are classified as deferred revenue. The
deferred subscription revenue is recognized into income over the applicable subscription period.

Shipping & Handling Shipping and handling costs are included in cost of goods sold, and the amounts invoiced to customers relating
to shipping and handling are included in net sales.

Sales Tax Sales tax is reported on a net basis in the consolidated financial statements.

Advertising and Sales Promotion Expenses These costs reflect amounts provided to retailers and distributors for advertising and sales
promotions and are expensed as incurred. Customer programs, generally agreed to at the beginning of each year, are mainly variable programs dependent on sales and special promotional events. These
customer programs may be revised during the course of the
year, based upon a customer's projected sales and other factors, such as new, or changes to existing, promotional programs. Customer programs are accounted for as either a reduction of revenue or an
operating expense. Advertising and sales promotion expenses for the years ended December 31, 2009, 2008 and 2007 totaled $6.2 million, $7.6 million and $9.7 million,
respectively.

Research, Engineering and Product Development Expenditures Research and product development expenditures, as well as the
non-capitalized engineering costs, are expensed as incurred and amounted to $1.8 million in 2009, $2.2 million in 2008 and $2.2 million in 2007.

Stock Based Compensation The Company estimates the fair value of the stock option on the grant date using the Black-Scholes-Mertonoption pricing model
and assumptions for expected price volatility, option term, risk-free interest rate and dividend
yield and forfeitures. Expected price volatilities are based on historical volatilities of the Company's stock. The risk-free rate for periods within the contractual

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Table of Contents

life
of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of the stock based compensation is recognized on a straight-line basis over the
requisite service period.

Income Taxes Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement
and tax bases of assets and liabilities given the provisions of enacted tax laws. The deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year.
In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which it operates, estimates of future taxable income and available tax planning strategies. If tax
regulations, operating results or the ability to implement tax planning and strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation
allowances are recorded related to deferred tax assets based on themore likely than notrealization criteria.

Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and
other events from non-owner sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and
are reported in a separate component of equity. For the years ended December 31, 2009, 2008 and 2007, other comprehensive income (loss) includes the foreign currency translation adjustment and
the net of tax impact of an interest rate swap when applicable.

Accounts Receivable The majority of the Company's accounts receivable are due from retailers and two-step distributors. Credit
is extended based on an evaluation of a customer's financial condition, including, at times the availability of credit insurance, and, generally, collateral is not required. Accounts receivable are
due within various time periods specified in the terms applicable to the specific customer and are stated at amounts due from customers net of an allowance for claims and doubtful accounts.

The
Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company's previous loss history, the customer's
current ability to pay its obligation to the Company, availability of credit insurance and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable
against the allowance for claims and doubtful accounts when they are judged to be uncollectible, and payments subsequently received on such receivables are credited to customer claims or bad debt
expense.

Inventories Inventories are recorded at the lower of cost or market, on a first-in, first-out basis.

Concentration of Credit Risk The Company has evaluated its concentration of credit risk as it applies both to customers and to the
institutions with which it places cash investments.

The
Company believes that its concentration of credit risk as it applies to customers is low due to its broad customer base in all regions of the United States, as well as other areas in North America
and Europe. Customer concentration is described by those customers that accounted for more than 10 percent of sales as follows: Net sales in 2009 by the Cobra segment to Wal-Mart
totaled 15.4 percent of consolidated net sales. In 2008, net sales by the Cobra segment to Wal-Mart totaled 11.2 percent of consolidated net sales and net sales by the Cobra
segment to Wal-Mart in 2007 totaled 14.7 percent of consolidated net sales. The Company will selectively use credit insurance for certain accounts in light of management's judgment
of credit risk and the expense to acquire such insurance.

The
Company places temporary cash investments with institutions of high credit quality. At December 31, 2009 and 2008, the Company had approximately $1.4 million ($900,000 was on deposit
in foreign banks) and approximately $2.0 million ($1.8 million was on deposit in foreign banks respectively, on deposit with such financial institutions, of which $658,000 and
$1.2 million, respectively, were in excess of amounts insured by the respective governments. The Company performs periodic evaluations of these institutions for relative credit standing and has
not experienced any losses as a result of this concentration. Consequently, no significant concentration of credit risk is considered to exist.

Depreciation Depreciation of buildings, tooling and equipment is computed using the straight-line method over the following
estimated useful lives. Building improvements are depreciated using the straight-line method over the lesser of the useful life or the lease term. Depreciation expense totaled
$1.5 million for 2009, $1.9 million for 2008 and $2.3 million for 2007.

Classification

LifeBuildings

30 yearsBuilding improvements

20 yearsMotor vehicles

2-5 yearsEquipment

5-10 yearsTools, dies and molds

1.5-4.5 years


Long-Lived Assets Long-lived assets are reviewed for possible impairment whenever events indicate that the
carrying amount of such assets may not be recoverable. If such a review indicates impairment, the carrying amount of such assets are reduced to an estimated fair value.

Intangible
assets subject to amortization are evaluated for impairment whenever events or circumstances indicate that the carrying amount of an amortizable intangible asset may not be recoverable. If
impairment indicators exist for an amortizable intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value of
the

33

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asset.
If the projection of undiscounted future cash flows is in excess of the carrying value of the intangible assets, no impairment charge is recorded. If the projection of undiscounted cash flows
is less than the carrying value of the intangible asset, an impairment charge is recorded to reduce the intangible asset to its fair value. Economic conditions in the fourth quarter of 2008 triggered
an impairment analysis, however no impairment resulted. The Company recorded impairment charges of $0, $266,000 and $3.0 million, respectively for years ended December 31, 2009, 2008 and
2007. The 2008 impairment charge of $266,000 was related to product software. The 2007 impairment charge included $2.6 million for product software impairment and $409,000 for the
write-down of tooling and prepaid assets.

Goodwill and Other Intangible Assets The Company evaluates goodwill for impairment on an annual basis or if impairment indicators exist.
For goodwill, the evaluation requires a comparison of the estimated fair value of PPL to which the goodwill has been assigned to the sum of the carrying value of the assets and liabilities of that
unit. If the sum of the carrying value of the assets and liabilities of a reporting unit exceeds the fair value of that reporting unit, the carrying value of the reporting unit's goodwill is reduced
to its estimated fair value through an adjustment to the goodwill balance, resulting in an impairment charge.

The
fair values used in the impairment evaluation are estimated based upon discounted future cash flow projections and comparisons with comparable companies as well as the Company's market
capitalization. The Company's annual impairment review as of October 1, 2008 was superseded by continued degradation of the financial markets and the Company's stock price. The Company's low
stock price in relation to book value per share triggered an impairment review of the goodwill associated with the PPL acquisition as of December 31, 2008. Based on the year-end
reconciliation of the book value to market capitalization, a $20.1 million impairment charge was recorded in the fourth quarter of 2008.

Amortization
of intangible assets is computed using the straight-line method over the following weighted average useful lives:

Classification

LifeInternal use software

3 yearsERP internal software system

7 yearsTrademarks and tradenames

3-30 yearsPatents

17 yearsProduct software (based on product life cycle)

1-3 yearsEnigma Database

5 yearsNoncompetition Agreements

3 yearsCustomer Relationships

10 years


Amortization
expense relating to intangible assets subject to amortization totaled $1.9 million in 2009, $2.5 million in 2008 and $3.9 million in 2007.

Software Related to Products Sold The Company purchases and/or incurs costs in connection with the development of software to be used in
products that the Company intends to sell. Coding and related costs incurred after technological feasibility of the software has been established and a working model of the product developed are
capitalized and deferred as intangible assets. Capitalized costs are charged to earnings based on the ratio of actual product sales during the reporting period to expected product sales over the
estimated product life cycle. Software related intangible assets are reviewed at each balance sheet date for possible impairment. If such review indicates that the carrying amount of these assets may
not be recoverable, the carrying amount is reduced to the estimated fair value.

ERP System Costs The Company capitalizes certain costs associated with ERP software developed or obtained for internal use. The Company's
policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use ERP software. Capitalized costs are classified as
intangible assets. Costs associated with preliminary project activities and training are expensed as incurred. Capitalized costs related to ERP software developed or obtained for internal use are
amortized over a seven year period on a straight-line basis when the relevant ERP software is placed in service.

Deferred Income Prepaid subscriptions to the AURA database and AURA database subscriptions bundled with certain detection and
navigation products are classified as deferred income. The deferred subscription revenue is recognized over the applicable subscription period. At December 31, 2009 and 2008 the current portion
of the deferred income totaled $1.1 million and $1.2 million, respectively, and the long-term portion of the deferred income totaled $227,000 and $430,000, respectively. The
current deferred income is classified as other accrued liabilities and the long-term deferred income is classified as other long-term liabilities on the balance sheet.

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(2) New AccountingStandards

The FASB issued ASC 810,Consolidationin December 2007. This standard changed the accounting for,
and the financial statement presentation of, non-controlling equity interests in a consolidated subsidiary. Application of this standard defined the term non-controlling intereststo replace the termminority interestsand reports non-controlling interestsas a component of the equity of a consolidated entity. The underlying principle of the new
standard is that both
the controlling interest and the non-controlling interests are part of the equity of a single economic entity: the consolidated reporting entity. Classifying non-controlling
interests as a component of consolidated equity is a change from the prior practice of treating minority interests as a mezzanine item between liabilities and equity or as a liability. The change
affects both the accounting and financial reporting for non-controlling interests in a consolidated subsidiary. ASC 810 includes reporting requirements intended to clearly identify and
differentiate the interests of the parent and the interests of the non-controlling owners. The Company adopted ASC 810 on January 1, 2009 and the reporting and disclosure
requirements of this standard were applied retrospectively to the prior periods. Adoption of ASC 810 did not have a material effect on the Company's financial position or results of operations.

ASC
815,Derivatives and Hedging Activitieswas issued in March 2008. This new standard required enhanced disclosures about an entity's derivative and
hedging activities, including (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for, and (iii) how
derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. The Company adopted ASC 815 on January 1, 2009. Since this new
standard only required enhanced disclosures, adoption did not affect the Company's financial position or results of operations.

ASC
825,Financial Instruments, was updated in April 2009, amending existing fair value disclosure requirements and requiring fair value disclosures for
interim periods. This standard was effective for interim periods ending after June 15, 2009. However, the Company early adopted this standard on January 1, 2009. Since ASC 825 only
requires enhanced disclosures, this standard did not affect the Company's financial position or results of operations.

ASC
855,Subsequent Events,was issued in May 2009. This standard which was effective for annual and interim periods ending after June 15, 2009,
established the accounting and disclosure standards for events that occur after the balance sheet date but prior to the issuance of financial statements ("subsequent events"). The Company adopted ASC
855 and will evaluate subsequent events through the filing date of its quarterly and annual SEC filings. Adoption of this standard did not affect the Company's financial position or results of
operations.

ASC
105,Generally Accepted Accounting Principles, was issued in June 2009. This standard replaced the existingHierarchy of
Generally Accepted Accounting Principlesand allowed theFASB Accounting Standards Codificationto become the sole source of
non-governmental Generally Accepted Accounting Principles ("GAAP"), except for the rules and interpretations of the SEC. ASC 105 became effective for annual and interim periods ending
after September 15, 2009. The adoption of this standard did not have a material affect the Company's financial position or results of operations.

Accounting
Standards Update ("ASU") 2009-05,Measuring Liabilities at Fair Value, was issued by the FASB in August 2009. This standard
amends ASC 820,Fair Value Measurements and Disclosuresto clarify how entities should estimate the fair value of liabilities. ASC 820, as amended,
includes clarifying guidance for circumstances in which a quoted price in an active market is not available, the effect of the existence of a liability transfer restrictions, and the effect of quoted
prices for the identical liability, including when the identical liability is traded as an asset. The amended guidance on measuring liabilities at fair value is effective for the first interim or
annual period beginning after August 28, 2009, with an earlier application permitted. The Company does not believe that the adoption of the amended guidance in ASC 820 will have a material
effect on the Company's financial position or results of operations.

ASU
2009-13,Multiple-Deliverable Revenue Arrangements  a consensus of the FASB Emerging Issues Task Force, was issued
by the FASB in October 2009. This standard amends certain guidance in ASC 605,Revenue Recognition. The amended guidance in ASC 605-25
(1) modifies the separation criteria by eliminating the criterion that requires objective and reliable evidence of fair value for the undelivered item(s), and (2) eliminates the use of
the residual method of allocation and instead requires that arrangement consideration be allocated, at the inception of the arrangement, to all deliverables, based on their relative selling price. The
amended guidance in ASC 605-25 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with
early application and retrospective application permitted. Since the Company's accounting had been consistent with the amendedRevenue Recognitionguidance, the application of ASC 605-25 did not have a material effect on the Company's financial position or results of operations.

ASU
2010-09,Subsequent Events, Amendments to Certain Recognition and Disclosure Requirementsissued by the FASB in March 2010. The
amendment to the FASB Accounting Standards Codification included in this ASU, among other things, eliminate the requirement that an "SEC filer" (as defined) disclose the date through which subsequent
events have been evaluated in both issued and revised financial statements. This does not change the requirement that SEC filers evaluate subsequent events through the date the financial statements
are issued. The application of ASU 2010-09 did not have a material effect on the Company's financial position or results of operations.

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Table of Contents

(3) Goodwill Impairment

The Company recorded goodwill of $12.0 million in connection with the acquisition of Performance Products Limited ("PPL") in
October 2006. Additional goodwill of $8.5 million resulted from the final earn-out payment to the former PPL shareholders that was recorded in September 2008 and paid in October
2008.

The
Company's annual impairment review as of October 1, 2008 was superseded by continued degradation of the financial markets and the Company's stock price. The Company's low stock price in
relation to book value triggered an impairment review of the goodwill associated with the PPL acquisition as of December 31, 2008. Due to the on-going challenges in the worldwide
economic climate and the continued weakness in the Company's stock price, management conducted an impairment test as of December 31, 2008. Based on management's belief that SEC guidance
indicates that goodwill cannot be sustained if the gap between the book value and market price per share cannot be explained by a reasonable control premium, the impairment test reconciled book value
to market value per share as part of this analysis. As a result of this reconciliation, the discount rate applied to the forecasted cash flows of PPL was more than doubled from that which was applied
in the prior impairment analyses and guideline company metrics were set at the low end of the range as compared to the previous analyses which had set these more in line with the average for
comparable companies. These changes in assumptions resulted in the impairment of the goodwill balance at PPL. Consequently, the Company recorded an impairment charge of $20.1 million in the
fourth quarter of 2008.

A
roll-forward of the goodwill balance follows (in thousands):

Balance at January 1, 2008

$
11,997Translation


(377
)Final earn-out payment


8,464Impairment charges


(20,084
)Balance at December 31, 2008

$
-0-


(4) Segment Information

The Company operates in two business segments (1) Cobra Consumer Electronics ("Cobra") and (2) Performance Products Limited
("PPL"). The Cobra segment is comprised of Cobra Electronics Corporation, Cobra Hong Kong Limited ("CHK") and Cobra Electronics Europe Limited ("CEEL"). The Company has
separate sales departments and distribution channels for each segment, which provide all segment exclusive product lines to all customers for that segment. Currently, there are no intersegment sales.

The
tabular presentation below sets forth certain financial information regarding the Company's net sales and long-lived assets by geographic area for the years ended December 31,
2009, 2008 and 2007.

Year Ended December 312009

2008

2007(in thousands)Net salesDomestic

$
79,752

$
89,654

$
121,459International


25,477


35,091


34,476Long-lived assetsDomestic

$
14,016

$
14,125

$
14,976International


8,028


8,075


24,003


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Table of Contents

The
tabular presentation below summarizes the financial information by business segment for the years ended December 31, 2009, 2008 and 2007.

Year ended December 31, 2009

Year ended December 31, 2008

Year ended December 31, 2007COBRA

PPL

TOTAL

COBRA

PPL

TOTAL

COBRA

PPL

TOTAL(in thousands)STATEMENT OF OPERATIONSNet sales

$
93,305

$
11,924

$
105,229

$
110,846

$
13,899

$
124,745

$
141,180

$
14,755

$
155,935Cost of sales


70,613


8,240


78,853


79,849


6,727


86,576


115,734


8,800


124,534Gross profit


22,692


3,684


26,376


30,997


7,172


38,169


25,446


5,955


31,401Selling, general and administrative expense


25,921


4,145


30,066


28,994


5,181


34,175


33,820


5,814


39,634Impairment of goodwill














20,084


20,084








(Loss) earnings from from operations


(3,229
)

(461
)

(3,690
)

2,003


(18,093
)

(16,090
)

(8,374
)

141


(8,233
)Interest expense


928





928


997





997


1,619


36


1,655Other (income) expense


(561
)

(549
)

(1,110
)

1,565


(422
)

1,143


(410
)

(679
)

(1,089
)(Loss) income before income taxes


(3,596
)

88


(3,508
)

(559
)

(17,671
)

(18,230
)

(9,583
)

784


(8,799
)Tax expense (benefit)


7,035


(273
)

6,762


366


232


598


(4,033
)

(363
)

(4,396
)Non-controlling interest





(2
)

(2
)




(11
)

(11
)




(19
)

(19
)Net (loss) earnings

$
(10,631
)
$
359

$
(10,272
)
$
(925
)
$
(17,914
)
$
(18,839
)
$
(5,550
)
$
1,128

$
(4,422
)




December 31, 2009

December 31, 2008

December 31, 2007COBRA

PPL

TOTAL

COBRA

PPL

TOTAL

COBRA

PPL

TOTAL(in thousands)Capital expenditures

$
739

$
356

$
1,095

$
1,057

$
109

$
1,166

$
1,198

$
360

$
1,558Depreciation and amortization


2,656


1,227


3,883


3,537


1,759


5,296


5,496


2,429


7,925Impairment











266


20,084


20,350


3,031





3,031Long-lived assets


14,391


7,653


22,044


14,479


7,721


22,200


15,376


23,603


38,979Total assets


60,693


15,010


75,703


65,923


13,075


78,998


82,294


32,024


114,318


(5) Multiple Element Arrangements

The Company bundles the sale of its PPL trucker navigation and other selected PPL navigation products with ongoing access to its AURA speed camera
database in order to allow those customers who so chose, to update their databases for both navigation low bridge height data (perceived as critical to some professional drivers) and speed camera
locations. However, in order to receive these updates to these fully functional products, customers must first register on PPL's website. The Company deferred the revenue associated
with the ongoing service period, which was considered a separate unit of accounting. Revenues deferred from this arrangement were calculated using the relative fair market value method and amounted to
$556,000 at December 31, 2009 and $426,000 at December 31, 2008.

In
addition, beginning in 2009, the Company's domestic business began selling products that bundled selected Detection products with ongoing access to the AURA database and a product that bundled the
7700 PRO professional driver navigation product with a three-month access to the AURA database. Revenues deferred from these arrangements were calculated using the relative fair market value method
and amounted to $199,000 at December 31, 2009.

(6) Income Taxes

Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets
and liabilities given the enacted tax laws for each applicable tax jurisdiction. The deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year.
Valuation allowances related to deferred taxes are recorded based on themore likely than notrealization criteria. The Company reviews the need for a
valuation allowance on a quarterly basis for each of its tax jurisdictions. When evaluating the recoverability of future tax benefits, the Company considers the historic operating results, projected
operating results and available tax planning strategies, if any.

Due
to the operating results for 2009, the expected continuation of a global recession and the absence of tax planning strategies to generate a sufficient level of taxable income, management concluded
the full realization of the deferred tax assets within a reasonable time horizon did not satisfy themore likely than notrealization criteria.
Accordingly, the Company established a $9.6 million deferred tax valuation allowance for its U.S. operation in the second quarter of 2009. The valuation allowance is a non-cash
charge that does not preclude the Company from fully realizing the net deferred tax assets in the future. At December 31, 2009 the deferred tax valuation allowance totaled $8.4 million.
A deferred tax valuation allowance was not required at December 31, 2008. During 2007, the valuation allowance for CEEL's net operating loss carry-forward was reversed. The net
change in the total valuation allowance during the 2007 was $315,000.

The Worker, Homeownership, and Business Assistance Act of 2009,enacted November 6, 2009, allows eligible businesses a one-time
election to carry back net operating losses ("NOL") from 2008 or 2009 (but not both) for three, four or five years rather than the standard two

37

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Table of Contents

years.
As result of this one-time opportunity, the Company carried back $4.3 million of 2009's NOL to prior periods and generated a significant portion of the expected federal tax
refund totaling $974,000. $1.2 million of 2008's NOL will be carried forward to future periods. The tax benefit for 2008's NOL carryforward will expire in 2028. The Company's NOL for 2007 was
carried back to prior periods. At December 31, 2009, the Company had an AMT credit carry forward of $2.4 million which does not expire, to offset against future income tax payments.

Amounts
held by foreign subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S. The Company has not recorded deferred income taxes on the undistributed earnings of its
Irish subsidiary because of the Company's intent to indefinitely reinvest such earnings. As of December 31, 2008, U.S. income taxes have not been provided on a cumulative total of
$1.8 million of such earnings. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be distributed. Beginning in 2009, the Company
intended to repatriate the future earnings of its Irish subsidiary (CEEL), which will increase the Company's effective tax on these earnings to reflect the higher U.S. tax rate once the prior year's
net operating loss is utilized and the valuation allowance is reversed. However, since CEEL generated an operating loss for 2009, no funds were repatriated to the U.S. in 2009.

The
provision (benefit) for income taxes for the years ended December 31, 2009, 2008 and 2007 consists of:

2009

2008

2007(in thousands)Current provision (benefit)Federal

$
(936
)
$
(80
)
$
(1,459
)State


(165
)

(14
)

(296
)Foreign


(286
)

1,697


443(1,387
)

1,603


(1,312
)Deferred (benefit) provisionFederal


6,958


170


(1,915
)State


1,228


30


(398
)Foreign


(37
)

(1,205
)

(771
)8,149


(1,005
)

(3,084
)Total provision (benefit)

$
6,762

$
598

$
(4,396
)


A
summary of the pre-tax earnings (loss) and tax provision (benefit) for the years ended December 31, 2009, 2008 and 2007 by major taxing jurisdiction follows:

2009

2008

2007Pre-Tax
Loss

Tax
Provision

Pre-Tax
Income (Loss)

Tax
Benefit

Pre-Tax
Income (Loss)

Tax
Benefit(in thousands)United States

$
(2,613
)
$
7,085

$
(2,114
)
$
106

$
(10,866
)
$
(4,068
)Foreign


(895
)

(323
)

(16,116
)

492


2,067


(328
)Total

$
(3,508
)
$
6,762

$
(18,230
)
$
598

$
(8,799
)
$
(4,396
)


The
statutory federal income tax rate (34 percent) is reconciled to the effective Income tax rate as follows:

2009

2008

2007Income taxes at statutory federal income tax rate


(34.0
)%

(34.0
)%

(34.0
)%State taxes, net of federal income tax benefit


(2.9
)

(0.5
)

(4.9
)Foreign operations


(0.5
)

1.4


(8.1
)R & D credit


(2.7
)

(0.5
)

(1.0
)Valuation allowance


239.0





(3.6
)Goodwill impairment





31.4


CSV (gain) loss


(8.0
)

3.2


Other permanent


2.8


2.5


0.9Other


(0.9
)

(0.2
)

0.7Effective tax rate


192.8
%

3.3
%

(50.0
)%


38

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Table of Contents

Deferred tax assets and liabilities by type at December 31, 2009 and 2008 are as follows:

2009

2008(in thousands)Deferred tax assets:Sales/receivable reserves

$
464

$
654Inventory reserves


890


998Compensation reserves


2,767


2,605Accrued promotion expenses


499


438Warranty reserves


319


335AMT credit carry-forward


2,425


1,743R & D expenditures


574


766Net operating loss carry-forward


1,006


1,332Other


389


506Valuation allowance


(8,434
)

Deferred tax assets


899


9,377Deferred tax liabilities:Tax basis difference on PPL assets acquired


(1,946
)

(1,983
)Intangible assets


(693
)

(852
)Other


(206
)

(391
)Deferred tax liabilities


(2,845
)

(3,226
)Net deferred tax (liability) asset

$
(1,946
)
$
6,151Reconciliation of deferred tax to Consolidated Balance Sheets:Future tax benefit  U.S.

$
2,114

$
6,130Valuation allowance  U.S.


(2,114
)

Current deferred tax asset





6,130Future tax benefit  U.S.


6,320


2,004Valuation allowance  U.S.


(4,603
)

Non-current deferred tax asset


1,717


2,004Future tax liability  Foreign


(11
)

Valuation allowance  U.S.


(1,717
)

Current deferred tax liability


(1,728
)

Non-current deferred tax liability  Foreign


(1,935
)

(1,983
)Net deferred tax (liability) asset

$
(1,946
)
$
6,151


A
summary of the deferred tax asset/liability by major taxing jurisdiction at December 31, 2009 and 2008 follows:

2009

2008(in thousands)United States

$


$
8,134Foreign


(1,946
)

(1,983
)Total

$
(1,946
)
$
6,151


Uncertain Tax Positions

The Company evaluates uncertain tax positions for measurement, recognition and derecognition. Interest and penalties are included in the income tax
expense. During the year ended December 31, 2009, interest income of $3,000 and reduced penalties of $2,000 were included in the tax expense for 2009. At December 31, 2009 the Company
has accrued $9,000 for the payment of interest and $4,000 for the payment of penalties.

A
reconciliation of the beginning and ending balances of the unrecognized tax benefit follows (in thousands):

Balance at January 1, 2009

$
122Additions for current year tax positions


25Balance at December 31, 2009

$
147


39

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Table of Contents

The
total amount of unrecognized tax benefits that would impact the effective tax rate if recognized is $25,000. The total amount of unrecognized tax benefits is not expected to significantly change
in the next twelve months.

The
federal tax returns for the 2006 to 2009 tax years remain open to examination. State tax returns for the 2000 to 2008 tax years remain open to examination by certain tax jurisdictions. The major
foreign jurisdictions where Cobra files tax returns are the United Kingdom and Ireland. The 2007 and 2008 tax years are open to examination in those foreign jurisdictions.

(7) Mobile Navigation Strategy Change

The Company's decision to change its North American mobile navigation strategy resulted in a $7.7 million charge, $7.5 million charged
to cost of sales and $133,000 charged to selling, general and administrative expense, in the fourth quarter of 2007. This strategy change limits the future development of mass market mobile navigation
products in North America to unique mobile navigation products sold into niche markets with specialized and focused distribution and employs lower cost sourcing arrangements utilizing the platform of
Performance Products Limited or that of other qualified vendors. The components of the $7.7 million charge in the fourth quarter of 2007 follows:

Description

Amount(in thousands)Product warranty and liquidation reserves

$
3,008Product software impairment


2,622Tooling, packaging and parts write-downs


1,243Inventory write-downs


676Cost of sales  charge


7,549Severance


83Prepaid write-offs


50Selling, general and administrative  charge


133Total

$
7,682


In
the second quarter of 2008, the Company incurred a $266,000 product software impairment charge because lower selling prices were anticipated for the remaining mobile navigation units
on-hand. The mobile navigation strategy change reserve totaled $250,000 at December 31, 2008 and the Company does not expect future costs to exceed the current reserve balance.

(8) Financing Arrangements

On February 15, 2008, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with The PrivateBank and Trust Company, as
lender and agent, and RBS Citizens, N.A., as lender, for a $5.7 million term loan facility and a $40 million revolving credit facility, both of which mature on October 19, 2011.
Borrowings under the term loan were used to pay off the balance and close the term loan from the Company's previous credit agreement. Borrowings under the new revolving credit facility were used to
pay off and close the previous revolving credit facility and for general corporate purposes. The Loan Agreement replaced the Company's previous credit agreement.

On
August 13, 2009, the Company entered into an amendment to the Loan Agreement. Pursuant to the amendment, the lenders waived the failure of the Company to comply as of June 30, 2009
with the financial covenants set forth in the Loan Agreement relating to Total Debt to EBITDA Ratio (as defined in the Loan Agreement) and Fixed Charge Coverage Ratio (as defined in the Loan
Agreement). In addition, the Loan Agreement Amendment decreased the maximum principal amount available to be borrowed by the Company pursuant to the revolving credit facility under the Loan Agreement
from $40 million to $28 million. The Company paid an
amendment fee of $159,150, as well as certain fees and expenses, in connection with the execution of the Loan Agreement Amendment.

Due
to the continued impact of the global economic downturn and the preference of retail and distribution customers to defer third quarter purchases to the fourth quarter, the Company did not satisfy
the financial covenants under the Loan Agreement for the third quarter of 2009. On November 2, 2009, the Company and the lenders under the Loan Agreement entered into an amendment to the Loan
Agreement. Pursuant to the amendment, which was effective as of October 24, 2009, the lenders waived the covenant violations. The Company paid an amendment fee of $50,000, as well as certain
fees and expenses of the lenders, in connection with execution of the amendment. The Company believes that it has a sufficient credit line to operate its business.

As
a result of three key accounts deferring sales to early 2010, the Company violated the minimum EBITDA loan covenant for the fourth quarter of 2009 but was in compliance with the fixed charge
coverage and tangible net worth covenants. On March 12, 2010, the Company and the lenders under the Loan Agreement entered into an amendment to the Loan Agreement. Pursuant to the amendment,
which was effective as of March 9, 2010, the lenders waived the covenant violation. The Company paid an amendment fee of $50,000, as well as certain fees and expenses of the lenders, in
connection with execution of the amendment. The amendment also

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decreased
the maximum principal amount available to be borrowed by the Company pursuant to the revolving credit facility under the Loan Agreement from $28 million to $23 million and
eliminated the minimum cumulative EBITDA covenant. Commencing December 31, 2010, the loan commitment will be reduced to $20 million. The amendment, therefore, provides for two covenants,
fixed charge coverage and tangible net worth. The fixed charge coverage covenant requires that the Company maintain a Fixed Charge Coverage Ratio of 1.0 for the three quarter period ending
March 31, 2010 and for the four quarter period ending June 30, 2010 and a Fixed Charge Coverage Ratio of 1.1 for each rolling four quarter period thereafter. As of December 31,
2009, the Fixed Charge Coverage Ratio for the two quarter period ending on that date was 2.14. The tangible net worth covenant requires the Company to maintain tangible net worth as of the end of each
quarter to $13.4 million, an amount based on 90% of the Company's tangible net worth as of June 30, 2009, plus 50 percent of consolidated net income (but with no reduction for net
losses) for each quarter that preceded that quarter being measured, excluding any gains or losses associated with the cash surrender value of life insurance. As of December 31, 2009, the
Company had tangible net worth of $15.3 million as compared to a minimum requirement of $14.3 million.

As
amended, the Loan Agreement requires lockbox agreements, which provide for all Company receipts to be swept daily to reduce borrowings outstanding under the revolving credit facility. These
agreements, combined with the existence of a material adverse change ("MAC") clause in the Loan Agreement, result in the Revolving Credit Facility being classified as a current liability. The Company
does not expect to repay, or be required to repay, within one year, the balance of its revolving credit facility, which has a final expiration date of October 19, 2011. The MAC clause, which is
a common requirement in commercial credit agreements, allows the lender to require the loan to become due if there has been a material adverse change in the Company's financial condition, operations
or other status.

Interest
on amounts borrowed under the Loan Agreement is based on the prime rate plus an applicable margin, or LIBOR plus an applicable margin, with the applicable margin being determined based on the
Total Debt to EBITDA Ratio for the prior four quarters, with the further requirement that qualifying for a reduction from the currently stipulated applicable margin requires that the Company achieve
the designated Total Debt to EBITDA ratio for two consecutive quarters. The applicable margin based on the Total Debt to EBITDA Ratio of the Company as of December 31, 2009 was 2.0 percent for
prime rate loans and 4.5 percent for LIBOR loans. Availability under the revolving credit facility is calculated based on a borrowing base formula that includes 75 percent of eligible accounts
receivable, the lesser of 60 percent of lower of cost or market value of eligible inventory or 85 percent of the appraised orderly liquidation value of eligible inventory, and 60 percent of commercial
letters of credit issued for the purchase of inventory, subject to certain limitations and to reserves established at the lenders' discretion including but not limited to an availability reserve of
$2.5 million through September 30, 2009 and $3.0 million thereafter. The Loan Agreement requires an inventory appraisal, when deemed necessary by the lender, the results of which
could lead to a reduction in the availability based on inventory. The inventory appraisal conducted as of June 30, 2009 did not affect credit availability. The revolving credit facility
continues to be subject to an unused line fee of 0.5 percent and the term loan under the Loan Agreement is subject to quarterly principal payments by the Company of $310,000 for the quarter ending
September 30, 2009 and $440,000 for each quarter thereafter through September 30, 2011. The term of the Loan Agreement
continues to extend until October 19, 2011. Borrowings under the Loan Agreement are secured by substantially all of the assets of the Company except for equity interests in the
non-U.S. subsidiaries.

At
December 31, 2009, the Company had interest bearing debt outstanding of $17.9 million, consisting of the $3.1 million term loan and $14.8 million borrowed under the
revolving credit facility. As of December 31, 2009, availability was approximately $4.9 million under the revolving credit facility based on the borrowing base formula.

Maximum
borrowings outstanding at any month end were $21.6 million and $20.5 million in 2009 and 2008, respectively. Aggregate average daily borrowings outstanding were
$19.5 million during 2009 and $17.6 million during 2008, with weighted average interest rates thereon of 4.8 percent and 5.3 percent, for 2009 and 2008, respectively.

Aggregate
principal repayments of long-term debt excluding payments on capital lease obligations over the next five years as of December 31, 2009 are as follows:

Year

Term
Loan

Revolver

Total(in thousands)2010

$
1,760

$


$
1,7602011


1,320


14,789


16,1092012








$
3,080

$
14,789

$
17,869


The
year-end interest for the term loan was 7.97 percent at December 31, 2009 and 6.34 percent at December 31, 2008. The year-end interest rate for
the portion of revolving loan at prime was 5.25 percent at December 31, 2009 and 2.75 percent at December 31, 2008. The year-end interest for the portion of the
revolving loan at LIBOR was 6.17 percent at December 31, 2009 and 2.33 percent at December 31, 2008.

41

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Table of Contents

(9) Fair Value of Financial Instruments

The Company's financial instruments include cash, cash surrender value ("CSV") of life insurance policies, accounts receivable, accounts payable,
short-term debt, long-term debt and letters of credit. The carrying values of cash, accounts receivable and accounts payable approximate their fair value because of the
short-term maturity of these instruments. The carrying amounts of the Company's bank borrowings under its credit facility approximate fair value because the interest rates are reset
periodically to reflect current market rates. The letters of credit approximate fair value due to the short-term nature of the instrument. The contract value/fair value of the letters of
credit was $2.7 million at December 31, 2009 and $2.0 million at December 31, 2008. The carrying value of the CSV for the life insurance approximates fair value and is
based on the market value of the underlying investments, which may increase or decrease due to fluctuations in the overall financial markets.

On
January 1, 2008, the Company adopted ASC 820,Fair Value Measurementsas it relates to financial assets and liabilities. On January 1,
2009, the Company adopted ASC 820 as it relates to non-financial assets and liabilities that are not recognized or disclosed at fair value in the financial statements at least annually.
The adoption of ASC 820, as it relates to non-financial assets and liabilities, had no impact on the financial statements.

ASC
820 defines fair value as the price that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. This
standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in ASC 840. ASC 820 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about
market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the
highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels
of the fair value hierarchy under ASC 820 are described below:

The
Company has a derivative contract for an interest rate swap that is valued on a recurring basis using quoted market prices. This financial instrument is exchange-traded and is classified within
Level 2 of the fair value hierarchy because the exchange is not deemed to be an active market. The derivative was classified as a long-term liability on the balance sheet. Refer to
Note 10Derivatives, for additional information.

The
following table provides the fair value information as of December 31, 2009 and December 31, 2008.

December 31, 2009

December 31, 2008Fair Value



Fair ValueLiabilities

Carrying
Amount

Total
Fair Value

Significant
Other
Observable
Inputs
(Level 2)

Carrying
Amount

Total
Fair Value

Significant
Other
Observable
Inputs
(Level 2)(In thousands)Interest rate swap

$
420

$
420

$
420

$
291

$
291

$
291


(10) Derivatives

The Company transacts business globally with various manufacturing and distribution facilities. The Company may reduce its exposure to fluctuations
in foreign exchange rates by creating offsetting positions through derivative financial instruments. The Company currently does not use derivative financial instruments for trading or speculative
purposes. The Company regularly monitors foreign exchange exposures and ensures hedge contract amounts do not exceed the amounts of the underlying exposures.

42

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Table of Contents

The Company's current hedging activity is limited to foreign currency purchases and an interest rate swap. The purpose of the foreign currency hedging activities is to protect
the Company from the risk that eventual settlement of foreign currency transactions will be adversely affected by changes in exchange rates. The purpose of the interest rate swap is to fix the
interest rate for the term of the revolving and term loans, thereby protecting the Company from future interest rate increases. The interest rate swap represents a cash flow hedge and is recorded at
fair value and classified as a non-current liability. Changes in the recorded fair value of the interest rate swap are recorded to other comprehensive income. At March 31, 2009, the
existing contract applicable to the term loan with a value of $250,000 was terminated and replaced with a contract applicable to the term loan and a portion of the revolving loan valued at $377,000.
The $250,000 value of the terminated liability will be amortized through September 30, 2011.

The
Company hedges foreign exchange exposures by entering into various short-term foreign exchange forward contracts. The instruments are carried at fair value in the Consolidated Balance
Sheets as a component of current liabilities. Changes in the fair value of foreign exchange forward contracts that meet the applicable hedging criteria are recorded as a component of other
comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Changes in the fair value of foreign exchange forward contracts that do not
meet the applicable hedging criteria are recorded currently in income as cost of sales. Hedging activities did not have a material impact on results of operations or financial condition during the
twelve month periods ending December 31, 2009 and 2008.

At
December 31, 2009, the Company did not have any open foreign exchange contracts. The carrying value of the interest rate swap, totaled $420,000 at December 31, 2009 and $291,000 at
December 31, 2008.

The
fair value of outstanding derivative contracts designated as hedging instruments recorded as liabilities in the accompanying balance sheet were as follows:

December 31,Liability Derivative

Balance Sheet Location

2009

2008(In thousands)Interest rate swap

Non-current liability

$
420

$
291


The
effective portion of the loss on outstanding derivatives recognized in Other Comprehensive Income ("OCI") for the years ending December 31, 2009 and 2008 follows:

Year Ended December 31,2009

2008(in thousands)Interest rate swap

$
420

$
291


The
effective portion of the gain reclassified from Accumulated Comprehensive Other Income into Income during the years ending December 31, 2009 and 2008 follows:

Year Ended December 31,Income Statement Location

2009

2008(in thousands)Interest expense

$
125

$



(11) Lease Transactions

The Company leases facilities and equipment under non-cancelable leases with remaining terms of one year or more, expiring at various
dates through the year 2020. The terms of the agreements provide that the Company will pay certain operating expenses. The capital lease provides the Company with the option to purchase the related
asset at the end of the respective initial lease terms. The gross amount and accumulated amortization for assets subject to the capital lease at December 31, 2009 was $136,000 and $34,000,
respectively. The present value of the capital lease was $102,000, less $6,000 of interest.

Total
minimum rental amounts committed in future years as of December 31, 2009 are as follows:

Operating
Lease

Capital
Lease

Total(in thousands)2010

$
537

$
48

$
5852011


351


48


3992012


351


12


3632013


301





3012014


180





180Thereafter


405





405Total

$
2,125

$
108

$
2,233


Total
rental expense amounted to $669,000 in 2009, $752,000 in 2008 and $658,000 in 2007.

43

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Table of Contents

(12) Shareholders' Equity

Preferred stock is issuable at anytime in one or more series, each of which may have such voting powers, designations, preferences, relative
participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of
such stock adopted by the Board of Directors. The Company has designated 120,000 of the 1 million authorized shares of preferred stock as Series A Junior Participating preferred stock.
No preferred stock has been issued.

(13) Earnings Per Share

Basic earnings per share excludes any dilution and is computed by dividing net earnings available to common shareholders by the weighted-average
number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock resulted in the
issuance of common stock. If the common stock equivalents have an anti-dilutive effect, they are excluded from the computation of diluted earnings per share.

2009

2008

2007(in thousands, except per share data)Basic loss per share:Net loss available to common shareholders

$
(10,272
)
$
(18,839
)
$
(4,422
)Weighted-average shares outstanding


6,471


6,471


6,458Basic loss per share

$
(1.59
)
$
(2.91
)
$
(0.68
)Diluted loss per share:Weighted-average shares outstanding


6,471


6,471


6,458Dilutive shares issuable in connection with stock option plans(a)








Less: shares purchasable with option proceeds








Total


6,471


6,471


6,458Diluted loss per share

$
(1.59
)
$
(2.91
)
$
(0.68
)


(a)Stock
options to purchase 447,780 and 509,296 shares were not included in the calculation for dilutive earnings per share for the years ended
December 31, 2009 and 2008, respectively, because the exercise price exceeded the market price. Stock options to purchase 477,546 shares were not included in the calculation for diluted
earnings per share for the year ended December 31, 2007, as the effect was anti-dilutive.


(14) Stock-Based Compensation

The Company has equity-based compensation plans from which stock-based compensation awards can be granted to eligible employees, officers or
directors.

The
Company awarded stock-based compensation of 195,000 shares with a ten year term to employees and officers during the year ended December 31, 2007. The Company did not grant stock options in
2009 and 2008. The stock-based compensation expense for the year ended December 31, 2009, 2008 and 2007 totaled $229,000, $253,000 and $223,000, respectively.

The
Company estimates the fair value of the stock option on the grant date using theBlack-Scholes-Mertonoption pricing model and assumptions for
expected price volatility, option term, risk-free interest rate and dividend yield. Expected price volatilities are based on historical volatilities of the Company's stock. The
risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected forfeiture rate of
9 percent was based on the actual forfeitures for the current and previous awards. The fair value of the stock option is recognized on a straight-line basis over the requisite
service period. The assumptions for the 2007 stock award are shown in the following table:

Risk-free interest rate


4.0-4.6
%Expected life


10 yearsExpected volatility


40-43
%


The
Company has six Stock Option Plans  2002 Outside Directors Plan, 2000 Outside Directors Plan, 2000, 1998, 1997 and 1995 ("the Plans"). The Company's 1998, 1997 and 1995 plans
were terminated in accordance with the respective plan terms on March 11, 2008, March 13, 2007 and March 17, 2005, respectively. Under the terms of the Plans, the consideration
received by the Company upon exercise of the options may be paid in cash or by the surrender and delivery to the Company of previously owned shares of its common stock, or by a combination thereof.
The optionee is credited with the fair market value of any stock surrendered and delivered as of the exercise date. Options become exercisable in annual 25 percent increments commencing twelve
months after the date of grant.

44

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Table of Contents

A
summary of certain provisions and amounts related to the Plans follows:

2002
Plan

2000
Plans

1998
Plan

1997
Plan

1995
Plan(in thousands)Authorized, unissued shares originally available for grant


25


325


310


300


300Granted


4


299


310


300


300Shares available for grant at December 31, 2009


21


26








Options exercisable at December 31, 2009


4


198


60


69


28


A
summary of the status of the Plans as of December 31, 2009, 2008 and 2007, and changes during the years ended on those dates is presented below:

2009

2008

2007Fixed Options

Shares
(000)

Weighted
Average
Exercise Price

Shares
(000)

Weighted
Average
Exercise Price

Shares
(000)

Weighted
Average
Exercise PriceOutstanding at beginning of year


509

$
7.99


684

$
7.50


591

$
6.13Granted














195


10.78Exercised














(68
)

5.92Cancellations and expirations


(61
)




(175
)




(34
)Outstanding at end of year


448


8.38


509


7.99


684


7.50Options exercisable at year end


359





366





481Weighted-average fair value of options granted during the year




$





$





$
5.23


The
following table summarizes information about stock options outstanding at December 31, 2009:

Options Outstanding

Options ExercisableRange of Exercise Price

Number
Outstanding
(000)

Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual
Life

Number
Exercisable
(000)

Weighted
Average
Exercise Price$5.01 to $6.00


5


5.69


0.4


5


5.69$6.01 to $7.00


146


6.34


0.8


146


6.34$7.01 to $8.00


104


7.15


2.4


104


7.15$8.01 to $9.00


5


8.41


2.1


5


8.41$9.01 to $10.00


10


9.55


4.1


10


9.55$10.01 to $11.00


178


10.78


7.2


89


10.78Total


448

$
8.38





359

$
7.78


A
summary of the nonvested stock options at December 31, 2009 and 2008 and changes during the years then ended follows:

Shares
(000)

Weighted Average
Grant Date
Fair ValueNonvested at January 1, 2008


203

$
10.69Forfeitures


(8
)

10.78Vested


(52
)

10.57Nonvested at December 31, 2008


143

$
10.72Forfeitures


(5
)

10.78Vested


(49
)

10.62Nonvested at December 31, 2009


89

$
10.78


The
intrinsic value of the options outstanding at December 31, 2009 was zero. The total unrecognized compensation cost was $263,000 as of December 31, 2009 and will be recognized as
stock compensation cost over the next two years.

(15) Retirement Benefits

The Company has a tax-qualified retirement savings plan, the Cobra Electronics Corporation Profit Sharing and 401(k) Incentive Savings
Plan (the "Plan"), under which participating employees may contribute up to the yearly statutory maximum into their Plan

45

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Table of Contents

accounts.
In addition, under the Plan, the Company matches amounts contributed by the participant up to a certain percent of earnings, not to exceed the statutory maximum. Matching 401(k) expenses for
2009, 2008 and 2007 were $270,000, $232,000 and $246,000, respectively. The Plan also allows the Company to make discretionary profit sharing contributions to the Plan accounts for the benefit of
participating employees for any calendar year in an amount determined by the Board of Directors. Plan profit sharing expenses for 2009,
2008 and 2007 were $0. Non-U.S. defined contribution expenses amounted to $68,000 in 2009, $57,000 in 2008 and $38,000 in 2007.

As
of December 31, 2009 and 2008, deferred compensation of $6.8 million and $6.5 million, respectively, was recorded as a long-term liability. The current portion of
the deferred compensation liability was included in accrued salaries and commissions, and amounted to $68,000 at December 31, 2009 and December 31, 2008. Deferred compensation
obligations arise pursuant to outstanding key executive deferred compensation plans, most of which are non-qualified defined benefit arrangements. The liability is based on discounted
future cash flows related to these arrangements. The discount rate used at December 31, 2009 and 2008 was 7 percent.

The
cash surrender value of life insurance policies is classified on the balance sheet as a non-current asset. The cash value of officers' life insurance policies is maintained to recover
the costs of deferred compensation obligations and the aggregate death benefit to the Company totaled $19.1 million at December 31, 2009 and $18.8 million at December 31,
2008.

(16) Intangible Assets

Intangible assets consist of the following at December 31, 2009 and December 31, 2008:

December 312009

2008(in thousands)Internal use software

$
2,267

$
2,154Less accumulated amortization


(1,989
)

(1,962
)278


192ERP internal software system


4,274


4,204Less accumulated amortization


(2,551
)

(1,944
)1,723


2,260Trademarks, tradenames and patents


6,048


5,405Less accumulated amortization


(1,316
)

(1,053
)4,732


4,352Product software, net of impairment


499


466Less accumulated amortization, net of impairment


(320
)

(255
)179


211Enigma database


1,230


1,118Less accumulated amortization


(786
)

(491
)444


627Other


33


194Less accumulated amortization


(1
)

(142
)32


52Customer relationships


4,970


4,517Less accumulated amortization


(1,589
)

(993
)3,381


3,524Total

$
10,769

$
11,218


46

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Table of Contents

Product software impairment charges totaled $0, $266,000 and $2.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. The product software
asset and accumulated amortization shown above are presented net of the respective impairment charges.

The
anticipated amortization expense of intangible assets over the next 5 years is $1.7 million in 2010, $1.7 million in 2011, $1.4 million in 2012, $800,000 in 2013 and
$800,000 in 2014.

(17) Commitments and Contingencies

The Company is subject to various unresolved legal actions, which arise in the normal course of its business. None of these matters is expected to
have a material adverse effect on the Company's financial position or results of operations. However, the ultimate resolution of these matters can not be determined at this time.

At
December 31, 2009 and 2008, the Company had outstanding inventory purchase orders with suppliers totaling approximately $17.7 million and $16.6 million, respectively.

(18) Product Warranty Costs and Inventory Valuation Reserves

The Company warrants to the consumer who purchases its products that it will repair or replace, without charge, defective products within a specified
time period, generally one year. The Company also has a return policy for its customers that allow them to return, to the Company, products returned to them by their customers for full or partial
credit based on when the Company's customer last purchased these products. Consequently, it maintains a warranty reserve, which reflects historical warranty return rates by product category multiplied
by the most recent six months of unit sales of that model and the unit standard cost of the model. A roll-forward of the warranty reserve is as follows:

2009

2008

2007(in thousands)Accrued product warranty costs, January 1

$
897

$
3,440

$
1,963Warranty provision


2,459


2,908


4,304Warranty expenditures


(2,499
)

(5,451
)

(2,827
)Accrued product warranty costs, December 31

$
857

$
897

$
3,440


The
Company maintains a liquidation reserve representing the write-down of returned product from its customers to its net realizable value. Returned inventory is either sold to various
liquidators or returned to vendors for partial credit against similar, new models. The decision to sell or return products to vendors depends upon the estimated future demand for the models. Judgments
are made as to whether various models are to be liquidated or returned to the vendor, taking into consideration the liquidation prices expected to be received and the amount of the vendor credit. The
amount of the reserve is determined by comparing the cost of each unit returned to the estimated amount to be realized upon each unit's disposition, either from returning the unit to the vendor for
partial credit towards the cost of new, similar product or liquidating the unit. This reserve can fluctuate significantly from quarter to quarter depending upon quantities of returned inventory on
hand and the estimated liquidation price or vendor credit per unit. A roll-forward of the liquidation reserve is as follows:

2009

2008

2007(in thousands)Liquidation reserve, January 1

$
623

$
2,695

$
1,112Liquidation provision


2,650


4,490


7,339Liquidation of models


(2,625
)

(6,562
)

(5,756
)Liquidation reserve, December 31

$
648

$
623

$
2,695


The
Company maintains a net realizable value ("NRV") reserve to write-down, as necessary, certain inventory not previously sold to customers, except for that covered by the liquidation
reserve discussed above, below cost. The reserve includes models where it is determined that the NRV is less than cost. Thus, judgments must be made about which slow-moving, excess or
non-current models are to be included in the reserve and the estimated net realizable value of such models. The estimated realizable value of each model is the per unit price that it is
estimated to be received if the model was sold in the marketplace. This reserve will vary depending upon the

47

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Table of Contents

specific
models selected, the estimated NRV for each model and quantities of each model that are determined will be sold below cost from quarter to quarter. A roll-forward of the NRV
reserve is as follows:

2009

2008

2007(in thousands)Net realizable reserve, January 1

$
109

$
1,614

$
736NRV provision


427


870


4,121NRV write-offs


(298
)

(2,375
)

(3,243
)Net realizable reserve, December 31

$
238

$
109

$
1,614


(19) Stockholder Rights Plan

The Company maintains a Stockholder Rights Plan (the "Plan") designed to deter coercive or unfair takeover tactics, to prevent a person or group from
gaining control of the Company without fair value to all shareholders and to deter other abusive takeover tactics that are not in the best interest of shareholders. The Company has designated 120,000
of the 1 million authorized shares of the preferred stock as Series A Junior Participating preferred stock.

Under
the terms of the Plan, each share of common stock is accompanied by one right; each right entitles the shareholder to purchase from the Company one one-hundredth of a newly issued
share of Series A Junior Preferred Stock, par value $1 per share, of the Company at an exercise price of $35. The rights become exercisable 10 days after a public announcement that an
Acquiring Person (as defined in the Plan) has become the beneficial owner of 15 percent or more of the outstanding shares of the Company (the "Stock Acquisition Date") or 10 business days after
the commencement of a tender or exchange offer that would result in a person beneficially owning 15 percent or more of such shares. The Company can redeem the rights for $0.01 per right at any
time until the earlier of 10 days following the Stock Acquisition Date or the final expiration of the rights. The rights will expire on November 5, 2011, unless redeemed earlier by the
Company.

In
the event that any person becomes an Acquiring Person, each right will entitle the holder (except for the Acquiring Person) thereof, upon payment of the current exercise price, to receive shares of
common stock of the Company, which at the time of such person becoming an Acquiring Person, have a market value equal to two times the then current exercise price. If, after the public announcement
has been made that any person has become an Acquiring Person, (i) the Company merges into or consolidates with another person (with limited exceptions), (ii) another person (with limited
exceptions) merges into or consolidates with the Company and shares of common stock of the Company are converted into securities of another person, cash or property or (iii) the Company
transfers 50 percent or more of its consolidated assets, cash flow or earning power to another person (with limited exceptions), each right
will entitle the holder thereof to receive, upon payment of the current exercise price, the number of shares of common stock of the Acquiring Person (or of another person affiliated therewith) which,
at the time of consummation of the transaction, have a market value equal to two times the then current exercise price.

(20) Allowance for Claims and Doubtful Accounts

The following table shows the activity in the allowance for claims and doubtful accounts:

2009

2008

2007(in thousands)Balance, January 1

$
107

$
205

$
282Provision for claims and doubtful accounts


45


118


28Write-offs, less recoveries


(49
)

(216
)

(105
)Balance, December 31

$
103

$
107

$
205


(21) Other Income (Expense)

The following table shows the components of other income (expense):

2009

2008

2007(in thousands)Interest income

$
9

$
67

$
41CSV income (loss)


743


(1,558
)

17Exchange gain


482


190


705Other  net


(124
)

158


326$
1,110

$
(1,143
)
$
1,089


48

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Table of Contents

(22) Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner
sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of
equity. For the years ended December 31, 2009, 2008 and 2007, other comprehensive income (loss) includes the foreign currency translation adjustment and the net of tax impact of an interest
rate swap. A summary of the comprehensive income (loss) for the three-year period ending December 31, 2009 follows:

2009

2008

2007(in thousands)Foreign currency translation adjustment

$
(1,585
)
$
(2,462
)
$
238Interest rate swap  gross


(304
)

(291
)

176Total excluding tax effect of interest rate swap


(1,889
)

(2,753
)

414Tax effect of interest rate swap





116


(87
)Total net of tax

$
(1,889
)
$
(2,637
)
$
327




(23) Quarterly Financial Information (Unaudited)

The following table summarizes the unaudited quarterly financial information for years ending December 31, 2009 and 2008:

Quarter EndedMarch 31

June 30

September 30

December 312009

2008

2009

2008

2009

2008

2009

2008(in thousands, except per share amounts)Net sales

$
19,085

$
28,858

$
25,971

$
34,318

$
27,405

$
33,242

$
32,768

$
28,327Gross profit


5,062


8,916


6,232


11,440


6,628


9,704


8,454


8,109Net earnings (loss)


(1,616
)

81


(9,902
)

1,710


(509
)

142


1,755


(20,772
)Net earnings (loss) per share(a)Basic

$
(0.25
)
$
0.01

$
(1.53
)
$
0.26

$
(0.08
)
$
0.02

$
0.27

$
(3.21
)Diluted


(0.25
)

0.01


(1.53
)

0.26


(0.08
)

0.02


0.27


(3.21
)


---

(24) Subsequent Events

The Company evaluated its December 31, 2009 financial statements for subsequent events and is not aware of any subsequent events which would
require recognition or disclosure in the financial statements.

As
of December 31, 2009 the Company failed to be in compliance with certain covenants set forth in the Loan Agreement. On March 12, 2010, the Company and the lenders under the Loan
Agreement entered into an amendment to the Loan Agreement. Pursuant to the amendment, which was effective March 9, 2010, the lenders waived the covenant violations. Details on the Loan
Agreement are discussed in Note 8,Financing Arrangements.

49

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Table of Contents

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in or disagreements with the Company's auditors regarding accounting or financial disclosure matters.

Item 9A.    Controls and Procedures



The Company has established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act), to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms. The Company's disclosure controls and procedures have also been designed to ensure that information required to be disclosed in the reports that the Company
files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the principal executive officer and principal financial officer, to allow timely
decisions regarding required disclosure.

During
2009, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's principal executive officer and principal
financial officer, of the effectiveness of the Company's disclosure controls and procedures. Based on this evaluation, the principal executive officer and principal financial officer of the Company
have concluded that the Company's disclosure controls and procedures are effective as of December 31, 2009.



The management of the Company, including the Company's Chief Executive Officer and Chief Financial Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Management
of the Company, including the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of
December 31, 2009. Management based this assessment on criteria for effective internal control over financial reporting described inInternal
Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management
determined that, as of December 31, 2009, the Company maintained effective internal control over financial reporting.

This
Annual Report on Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Internal control
over financial reporting was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company
to provide only management's report in this Annual Report on Form 10-K.



There has been no change in the Company's internal control over financial reporting that occurred during the fourth quarter of 2009 that has
materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B.    Other Information

None.

50

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Table of Contents

PART III

Item 10.    Directors and Executive Officers of the Registrant

Information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A
within 120 days after the end of the Company's 2009 fiscal year, and such information is hereby incorporated by reference.

The
Company has adopted a Code of Business Conduct and Ethics (the "Code"), which applies solely to the Company's officers, senior financial accounting and financial personnel and directors. The
Company has posted the Code on its website at www.cobra.com and any waivers of, or amendments to, the Code will be approved by the Board of Directors or the Governance and Nominating Committee of the
Company's Board of Directors. Any change to or waiver of the Code will be disclosed by publishing a statement on the Company's website.

Additional
information concerning Cobra's executive officers is included underExecutive Officers of the Registrantin Part I.

Item 11.    Executive Compensation

Information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A
within 120 days after the end of the Company's 2009 fiscal year, and such information, provided that theCompensation Committee Reportshall not
be deemed "filed" in this Annual Report on Form 10-K.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters



The following table provides information about stock options outstanding and shares available for future awards under all of Cobra's equity
compensation plans. The information is as of December 31, 2009. Cobra Electronics has not made any grants outside of its equity compensation plans.

Plan Category

(a)
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights

(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights

(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a))Equity compensation plans approved by security holders


433,780

$
8.42


20,568
(1)Equity compensation plans not approved by security holders


14,000


7.22


0
(2)Total


447,780


8.38


20,568


(1)Represents
shares from the 2000 Plan.(2)The
36,000 shares available or issued under these plans may not be issued to directors prior to the approval of the plans by security holders.


Set
forth below is a brief description of the material features of each of the Company's equity compensation plans that was adopted without the approval of the Company's shareholders and that were in
effect at December 31, 2009.



This plan includes a total of 25,000 non-qualified stock options to be granted to Directors who are not officers or employees of the
Company. The stock option committee, designated by the Company's Board of Directors, has the authority to select persons who will receive options and determine the number of shares of common stock
subject to each option and all other terms and conditions of each option. The period for the exercise of each option and the exercise price for an option will also be determined by the Stock Option
committee. An option may be exercised by giving written notice to the Company specifying the number of whole shares of common stock to be purchased.



This plan includes a total of 25,000 non-qualified stock options to be granted to Directors who are not officers or employees of the
Company. The stock option committee, designated by the Company's Board of Directors, has the authority to select persons who will receive options and determine the number of shares of common stock
subject to each option and all other terms and conditions of each option. The period for the exercise of each option and the exercise price for an option will also be determined by the Stock Option
committee. An option may be exercised by giving written notice to the Company specifying the number of whole shares of common stock to be purchased.

****

Other
information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A within 120 days after the end of the
Company's 2009 fiscal year, and such information is hereby incorporated by reference.

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The following Performance Graph compares the yearly percentage change in the Company's cumulative total shareholder return on the Company's Common
Stock for the five-year period, December 31, 2004 to December 31, 2009, with the percentage change in the cumulative total return for the Russell 2000 Index (the "Russell
Index"), and a peer group of companies selected by the Company.

Peer
Group consists of Emerson Radio Corporation, Koss Corporation and Audiovox Corporation. In selecting companies for the peer groups, the Company focused on publicly traded companies that design
and market electronics products, which have characteristics similar to that of the Company's in terms of one or more of the following: type of product, end market, distribution channels, sourcing or
sales volume. The returns of each of the companies in the peer groups have been weighted according to their respective stock market capitalizations at the beginning of each period for which a return
is indicated.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Cobra Electronics, The Russell 2000 Index  And A Peer Group

LOGO

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Item 13.    Certain Relationships and Related Transactions

Information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A
within 120 days after the end of the Company's 2009 fiscal year, and such information is hereby incorporated by reference.

Item 14.    Principal Accountant Fees and Services

Information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A
within 120 days after the end of the Company's 2009 fiscal year, and such information is hereby incorporated by reference.

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PART IV

Item 15.    Exhibits and Financial Statement Schedules



Description

Page or
Schedule
Number1.

Report of Independent Registered Public Accounting Firm

27Consolidated Statements of Operations for the three years ended December 31, 2009

28Consolidated Balance Sheets as of December 31, 2009 and 2008

29Consolidated Statements of Cash Flows for the three years ended December 31, 2009

30Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) for the three years ended December 31,
2009

31Notes to Consolidated Financial Statements

32-492.

Exhibits:See Index to Exhibits on pages 55 through 56.


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SIGNATURES

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

COBRA ELECTRONICS CORPORATION/s/ MICHAEL SMITH Michael Smith Senior Vice President and
Chief Financial Officer


Dated:
March 15, 2010

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

/s/ JAMES R. BAZET James R. Bazet

Director, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)/s/ MICHAEL SMITH Michael Smith

Senior Vice President and Chief Financial Officer (Principal Financial Officer)/s/ GERALD M. LAURES Gerald M. Laures

Vice President  Finance and Corporate Secretary (Principal Accounting Officer)/s/ WILLIAM P. CARMICHAEL William P. Carmichael

Director/s/ JOHN S. LUPO John S. Lupo

Director/s/ IAN R. MILLER Ian R. Miller

Director/s/ S. SAM PARK S. Sam Park

Director/s/ ROBERT P. ROHLEDER Robert P. Rohleder

Director


Dated:
March 15, 2010

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INDEX TO EXHIBITS

Exhibit
Number

Description of Document2.1

Share Purchase Deed dated October 14, 2006 among Cobra Electronics UK Limited, Performance Products Limited and the shareholders of Performance Products Limited  Filed as Exhibit No. 2.1 to the
Registrant's Current Report on Form 8-K dated October 19, 2006 (File No. 0-511), and hereby incorporated by reference.3.1

Restated Certificate of Incorporation, as amended October 28, 1998  Filed as Exhibit No. 3(i) to the Registrant's Form 10-K for the year ended December 31, 1998 (File No. 0-511),
and hereby incorporated by reference.3.2

Amended and Restated Bylaws, as amended December 6, 2007  Filed as Exhibit No. 3.2 to the Registrant's Form 10-K for the year ended December 31, 2007 (File No. 0-511), and hereby
incorporated by reference.3.3

Certificate of Designation of Series A Junior Participating Preferred Stock of Cobra Electronics Corporation pursuant to Section 151 of the General Corporation Law of the State of Delaware  Filed
as Exhibit No. 3(iii) to the Registrant's Form 10-K for the year ended December 31, 2001 (File No. 0-511), and hereby incorporated by reference.4

Rights Agreement dated as of October 24, 2001 between Cobra Electronics Corporation and American Stock Transfer & Trust Company, as Rights Agent  Filed as Exhibit 4 to the Registrant's
Current Report on Form 8-K dated October 25, 2001 (File No. 0-511), and hereby incorporated by reference.10.1
#
Deferred Compensation Plan dated as of December 23, 1992  Filed as Exhibit No. 10.19 to the Registrant's Form 10-K for the year ended December 31, 1992 (File No. 0-511), and hereby
incorporated by reference.10.2
#
1995 Key Employees Nonqualified and Incentive Stock Option Plan  Filed as Exhibit No. 10.23 to the Registrant's Form 10-K for the year ended December 31, 1995 (File No. 0-511), and
hereby incorporated by reference.10.3
#
Employment Agreement between Cobra Electronics Corporation and Anthony Mirabelli dated January 31, 1997  Filed as Exhibit No. 10.29 to the Registrant's Form 10-K for the year ended
December 31, 1996 (File No. 0-511), and hereby incorporated by reference.10.4
#
1998 Stock Option Plan, as amended  Filed as Exhibit 99.1 to the Registration Statement on Form S-8 of the Registrant dated September 16, 1998 (File No. 333-63501), and hereby
incorporated by reference.10.5
#
Cobra Electronics Corporation Executive Deferred Compensation Plan dated May 11, 1999  Filed as Exhibit No. 10.14 to the Registrant's Form 10-K for the year ended December 31, 1999 (File
No. 0-511), and hereby incorporated by reference.10.6
#
Cobra Electronics Corporation Deferred Compensation Plan For Select Executives dated December 21, 1999  Filed as Exhibit No. 10.15 to the Registrant's Form 10-K for the year ended
December 31, 1999 (File No. 0-511), and hereby incorporated by reference.10.7
#
Cobra Electronics Corporation Executive Retirement Trust dated May 11, 1999 between Cobra Electronics Corporation and Gerald Laures, as trustee, for the benefit of James Bazet dated May 11, 1999 
Filed as Exhibit No. 10.16 to the Registrant's Form 10-K for the year ended December 31, 1999 (File No. 0-511), and hereby incorporated by reference.10.8
#
Employment Agreement addendum between Cobra Electronics Corporation and Anthony Mirabelli dated April 22, 1999  Filed as Exhibit No. 10.17 to the Registrant's Form 10-Q for the quarter ended
March 31, 2000 (File No. 0-511), and hereby incorporated by reference.10.9
#
2000 Stock Option Plan  Filed as Exhibit 4.3 of the Registration Statement on Form S-8 of the Registrant dated July 25, 2000 (File No. 333-42164), and hereby incorporated by
reference.10.10
#
2000 Outside Directors Stock Option Plan  Filed as Exhibit 4.3 of the Registration Statement on Form S-8 of the Registrant dated July 25, 2000 (File No. 333-42166), and hereby
incorporated by reference.10.11
#
2002 Outside Directors Stock Option Plan  Filed as Exhibit 4.3 of the Registration Statement on Form S-8 of the Registrant dated June 24, 2002 (File No. 333-91078), and hereby
incorporated by reference.10.12
#
Employment Agreement between Cobra Electronics Corporation and James R. Bazet dated May 25, 2004  Filed as Exhibit No. 10.29 to the Registrant's Form 10-Q for the quarter ended June 30,
2004 (File No. 0-511), and hereby incorporated by reference.10.13

Technology Patent License Agreement between TeleAtlas North America, Inc. and Cobra Electronics Corporation dated March 31, 2006  Filed as Exhibit No. 10.1 to the Registrant's Form 10-Q
for the quarter ended March 31, 2006 (File No. 0-511), and hereby incorporated by reference. (Confidential material appearing in this document was omitted and filed separately with the Securities and Exchange Commission in accordance with
Section 24(b) of the Securities and Exchange Act of 1934, as amended, and Rule 24b-2 promulgated thereunder. Omitted information was replaced with asterisks.)


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Exhibit
Number

Description of Document10.14

Amended and Restated Loan and Security Agreement dated as of October 19, 2006 by and among LaSalle Bank National Association, as Lender and as Agent, for the lenders and Cobra Electronics Corporation 
Filed as Exhibit No. 10.1 to the Registrant's Form 10-Q for the quarter ended September 30, 2006 (File No. 0-511), and hereby incorporated by reference.10.15

Waiver and Amendment No. 1 to the Amended and Restated Loan and Security Agreement  Filed as Exhibit No. 10.1 to the Registrant's Current Report on Form 8-K dated August 1, 2007 (File
No. 0-511), and hereby incorporated by reference.10.16
#
Employment Agreement between Cobra Electronics Corporation and Michael Smith dated December 21, 2007. Filed as Exhibit No. 10.26 to the Registrant's Form 10-K for the year ended December 31, 2007
(File No. 0-511), and hereby incorporated by reference.10.17

Loan and Security Agreement with The PrivateBank and Trust and RBS Citizens N.A.  Filed as Exhibit No. 10.1 to the Registrant's Current Report on Form 8-K dated February 22, 2008 (File
No. 0-511), and hereby incorporated by reference.10.18
#
Executive Bonus structure for 2008  Filed as Exhibit No. 10.1 to the Registrant's Form 10-Q for the quarter ended March 31, 2008 (File No. 0-511), and hereby incorporated by
reference.10.19
#
First Amendment to the Deferred Compensation Plan for Select Executives  Filed as Exhibit No. 10.1 to the Registrant's Form 10-Q for the quarter ended September 30, 2008 (File No. 0-511),
 and hereby incorporated by reference.10.20
#
Cobra Electronics Corporation Severance Pay Plan  Filed as Exhibit No. 10.2 to the Registrant's Form 10-Q for the quarter ended September 30, 2008 (File No. 0-511), and hereby
incorporated by reference.10.21
#
First Amendment to Cobra Electronics Corporation Severance Pay Plan  Filed as Exhibit No. 10.3 to the Registrant's Form 10-Q for the quarter ended September 30, 2008 (File No. 0-511),
and hereby incorporated by reference.10.22
#
Employment Agreement Amendment between Cobra Electronics Corporation and Anthony Mirabelli dated December 31, 2008  Filed as Exhibit No. 10.1 to the Registrant's Current Report on Form 8-K
dated January 7, 2009 (File No. 0-511), and hereby incorporated by reference.10.23
#
Executive Bonus Structure for 2009  Filed as Exhibit No. 10.1 to the Registrant's Form 10-Q for the quarter ended March 31, 2009 (File No. 0-511), and hereby incorporated by
reference.10.24

Second Amendment to Loan and Security Agreement dated as of August 13, 2009 among Cobra Electronics Corporation, The PrivateBank Trust Company, as a lender and administrative agent for itself and the other
lenders, and RBS Citizens, N.A., as lender  Filed as Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended June 30, 2009 (File No. 0-511), and hereby incorporated by reference.10.25

Third Amendment to Loan and Security Agreement and Waiver, effective as of October 24, 2009 among Cobra Electronics Corporation, The PrivateBank and Trust Company as lender and administrative agent for itself and
other lenders and RBS Citizens, N.A., as lender  filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated November 6, 2009 and hereby incorporated by reference.10.26*

Fourth Amendment to Loan and Security Agreement and Waiver, effective as of March 9, 2010 among Cobra Electronics Corporation, The PrivateBank and Trust Company as lender and administrative agent for itself and
other lenders and RBS Citizens, N.A., as lender.14.1

Cobra Electronics Code of Business Conduct and Ethics For Officers, Senior Financial Accounting and Financial Personnel and Directors adopted February 22, 2006  Filed as Exhibit No. 14.1 to the
Registrant's Current Report on Form 8-K dated February 22, 2006 (File No. 0-511), and hereby incorporated by reference.21.1*

Cobra Electronics Corporation Subsidiaries.23.1*

Consent of Grant Thornton LLP dated March 15, 2010.31.1*

Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.31.2*

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.32.1*

Section 1350 Certification of the Chief Executive Officer.32.2*

Section 1350 Certification of the Chief Financial Officer


*Filed
herewith.#Executive
compensation plan or arrangement.


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