SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549










FORM 10-Q



| | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE
30, 2012.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



OR



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



Commission file number 1-14120



BLONDER TONGUE LABORATORIES, INC.

(Exact name of registrant as specified in
its charter)



|Delaware                                                       |  | 52-1611421                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|One Jake Brown Road, Old Bridge, New Jersey |  | 08857     
|------------------------------------------- |  | ----------
|(Address of principal executive offices)    |  | (Zip Code)



Registrant’s telephone number, including area code: (732)
679-4000



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 xNo    ̈



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 during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).



Yes xNo  ̈



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
“accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.



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

(Do not check if a smaller reporting company)



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



Number of shares of common stock, par value $.001, outstanding
as of August 6, 2012: 6,215,556



The Exhibit Index appears on page
19.











PART I – FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)



|                                                                                 |  | (unaudited) |        |   |              |  
|-------------------------------------------------------------------------------- |  | ----------- | ------ | - | ------------ | -
|                                                                                 |  | June 30,    |        |   | December 31, |  
|                                                                                 |  | 2012        |        |   | 2011         |  
|Assets                                                                           |  |             |        |   |              |  
|Current assets:                                                                  |  |             |        |   |              |  
|Cash                                                                             |  | $           | 211    |   |              | $
|Accounts receivable, net of allowance for doubtful accounts of $173              |  |             | 4,826  |   |              |  
|Inventories                                                                      |  |             | 9,791  |   |              |  
|Prepaid and other current assets                                                 |  |             | 912    |   |              |  
|Deferred income taxes                                                            |  |             | 383    |   |              |  
|Total current assets                                                             |  |             | 16,123 |   |              |  
|Inventories, net non-current                                                     |  |             | 5,414  |   |              |  
|Property, plant and equipment, net of accumulated depreciation and amortization  |  |             | 4,348  |   |              |  
|License agreements, net                                                          |  |             | 491    |   |              |  
|Intangible assets, net                                                           |  |             | 2,597  |   |              |  
|Goodwill                                                                         |  |             | 493    |   |              |  
|Other assets, net                                                                |  |             | 240    |   |              |  
|Deferred income taxes                                                            |  |             | 1,898  |   |              |  
|                                                                                 |  | $           | 31,604 |   |              | $
|Liabilities and Stockholders’ Equity                                             |  |             |        |   |              |  
|Current liabilities:                                                             |  |             |        |   |              |  
|Line of credit                                                                   |  | $           | 3,854  |   |              | $
|Current portion of long-term debt                                                |  |             | 270    |   |              |  
|Accounts payable                                                                 |  |             | 2,330  |   |              |  
|Accrued compensation                                                             |  |             | 551    |   |              |  
|Accrued benefit pension liability                                                |  |             | 781    |   |              |  
|Income taxes payable                                                             |  |             | 49     |   |              |  
|Other accrued expenses                                                           |  |             | 244    |   |              |  
|Total current liabilities                                                        |  |             | 8,079  |   |              |  
|                                                                                 |  |             |        |   |              |  
|Long-term debt                                                                   |  |             | 4,280  |   |              |  
|Commitments and contingencies                                                    |  |             | -      |   |              |  
|Stockholders’ equity:                                                            |  |             |        |   |              |  
|Preferred stock, $.001 par value; authorized 5,000 shares; No shares outstanding |  |             | -      |   |              |  
|Common stock, $.001 par value; authorized 25,000 shares, 8,465 shares Issued     |  |             | 8      |   |              |  
|Paid-in capital                                                                  |  |             | 25,765 |   |              |  
|Retained earnings                                                                |  |             | 2,722  |   |              |  
|Accumulated other comprehensive loss                                             |  |             | (1,942 | ) |              |  
|Treasury stock, at cost, 2,248 shares                                            |  |             | (7,308 | ) |              |  
|Total stockholders’ equity                                                       |  |             | 19,245 |   |              |  
|                                                                                 |  | $           | 31,604 |   |              | $



See accompanying notes to consolidated financial
statements



2







BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)



|                                                      |  | Three Months Ended June 30, |       |   | Six Months Ended June 30, |  
|----------------------------------------------------- |  | --------------------------- | ----- | - | ------------------------- | -
|                                                      |  | 2012                        |       |   | 2011                      |  
|Net sales                                             |  | $                           | 7,803 |   |                           | $
|Cost of goods sold                                    |  |                             | 5,200 |   |                           |  
|Gross profit                                          |  |                             | 2,603 |   |                           |  
|Operating expenses:                                   |  |                             |       |   |                           |  
|Selling                                               |  |                             | 822   |   |                           |  
|General and administrative                            |  |                             | 1,350 |   |                           |  
|Research and development                              |  |                             | 930   |   |                           |  
|                                                      |  |                             | 3,102 |   |                           |  
|Earnings (loss) from operations                       |  |                             | (499  | ) |                           |  
|Other Expense: Interest expense (net)                 |  |                             | (84   | ) |                           |  
|Earnings (loss) before income taxes                   |  |                             | (583  | ) |                           |  
|Provision (benefit) for income taxes                  |  |                             | -     |   |                           |  
|Net earnings (loss)                                   |  | $                           | (583  | ) |                           | $
|Basic and diluted net earnings (loss) per share       |  | $                           | (0.09 | ) |                           | $
|Basic and diluted weighted average shares outstanding |  |                             | 6,216 |   |                           |  



See accompanying notes to consolidated financial
statements



3







BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)



|                                                                            |  | Six Months Ended June 30, |       
|--------------------------------------------------------------------------- |  | ------------------------- | ------
|                                                                            |  | 2012                      |       
|Cash Flows From Operating Activities:                                       |  |                           |       
|Net loss                                                                    |  | $                         | (2,063
|Adjustments to reconcile net loss to cash provided by operating activities: |  |                           |       
|Stock compensation expense                                                  |  |                           | 105   
|Depreciation                                                                |  |                           | 255   
|Amortization                                                                |  |                           | 465   
|Provision for inventory reserves                                            |  |                           | 437   
|Changes in operating assets and liabilities:                                |  |                           |       
|Accounts receivable                                                         |  |                           | 201   
|Inventories                                                                 |  |                           | 637   
|Prepaid and other current assets                                            |  |                           | (483  
|Other assets                                                                |  |                           | (44   
|Accounts payable, accrued compensation and other accrued expenses           |  |                           | 1,800 
|Net cash provided by operating activities                                   |  |                           | 1,310 
|Cash Flows From Investing Activities:                                       |  |                           |       
|Capital expenditures                                                        |  |                           | (81   
|Acquisition of licenses                                                     |  |                           | (174  
|Acquisition of R.L. Drake assets                                            |  |                           | (7,020
|Net cash used in investing activities                                       |  |                           | (7,275
|Cash Flows From Financing Activities:                                       |  |                           |       
|Net borrowings on line of credit                                            |  |                           | 3,854 
|Borrowings of debt                                                          |  |                           | 1,601 
|Repayments of debt                                                          |  |                           | (130  
|Proceeds from exercise of stock options                                     |  |                           | -     
|Net cash provided by financing activities                                   |  |                           | 5,325 
|Net decrease in cash                                                        |  |                           | (640  
|Cash, beginning of period                                                   |  | $                         | 851   
|Cash, end of period                                                         |  | $                         | 211   
|Supplemental Cash Flow Information:                                         |  |                           |       
|Cash paid for interest                                                      |  | $                         | 156   
|Cash paid for income taxes                                                  |  |                           | -     



See accompanying notes to consolidated financial
statements.



4







BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)



Note 1 - Company and Basis of Presentation



Blonder Tongue Laboratories,
Inc. (together with its consolidated subsidiaries, the “Company”) is a technology-development and manufacturing
company that delivers television signal encoding, transcoding, digital transport, and broadband product solutions to the cable
markets the Company serves, including the multi-dwelling unit market, the lodging/hospitality market and the institutional market
including, hospitals, prisons and schools, primarily throughout the United States. The consolidated financial statements include
the accounts of Blonder Tongue Laboratories, Inc. and subsidiaries. Significant intercompany accounts and transactions have been
eliminated in consolidation.



The results for the
second quarter of 2012 are not necessarily indicative of the results to be expected for the full fiscal year and have not been
audited. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting
primarily of normal recurring accruals, necessary for a fair statement of the results of operations and cash flows for the periods
presented and the consolidated balance sheet at June 30, 2012. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant
to SEC rules and regulations. These financial statements should be read in conjunction with the financial statements and notes
thereto that were included in the Company’s latest annual report on Form 10-K for the year ended December 31, 2011.



Note 2 - Liquidity



The Company’s
primary sources of liquidity are its existing cash balances, cash generated from operations and amounts available under the Sovereign
Financing (as defined in Note 7 below). As of June 30, 2012, the Company had approximately $3,854 outstanding under the Revolver
(as defined in Note 7 below) and $3,207 of additional availability for borrowing under the Revolver. The Company anticipates these
sources of liquidity will be sufficient to fund its operating activities, anticipated capital expenditures and debt repayment obligations
for the next twelve months.



The Company’s
primary long-term obligations are for payment of interest and principal on the Company’s Revolver and Term Loan, both of
which expire on February 1, 2015. The Company expects to use cash generated from operations to meet its long-term debt obligations,
and anticipates refinancing its long-term debt obligations at maturity. The Company considers opportunities to refinance its existing
indebtedness based on market conditions. Although the Company may refinance all or part of its existing indebtedness in the future
and will be required to do so by February 1, 2015, there can be no assurances that it will do so. Changes in the Company’s
operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may require the Company to seek
additional debt or equity financing. There can be no assurance that financing will be available on acceptable terms or at all.
Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.
The Company also expects to make financed and unfinanced long-term capital expenditures from time to time in the ordinary course
of business, which were $81 and $431 in the six months ended June 30, 2012 and the year ended December 31, 2011, respectively.
The Company expects to use cash generated from operations, amounts available under its credit facility and purchase-money financing
to meet any anticipated long-term capital expenditures.



Note 3 - Acquisition



On February 1, 2012,
the Company’s wholly-owned subsidiary, R. L. Drake Holdings, LLC (“RLD”), a Delaware limited liability
company, acquired substantially all of the assets and assumed certain specified liabilities of R. L. Drake, LLC, a Delaware limited
liability company (“Seller”) (the “RLD Acquisition”), pursuant to an Asset Purchase Agreement
of even date, by and among RLD, Seller, R. L. Drake Acquisition Corporation, a Delaware corporation, and WBMK Holding Company,
an Ohio corporation, as amended by a certain First Amendment to Asset Purchase Agreement dated February 3, 2012 (as so amended,
the “Asset Purchase Agreement”). The purchase price was approximately $7,020, which included a working capital
adjustment of approximately $545, plus contingent purchase price payments of up to $1,500 in the aggregate that may be made over
the three-year period after closing if certain financial results are realized. The assets acquired from Seller include assets used
in the manufacturing and delivery of electronic communications solutions for cable television systems, digital television reception,
video signal distribution and digital video encoding, including equipment, supplies and other tangible personal property, inventory,
accounts receivable, business records, trademarks and other intellectual property rights. The Asset Purchase Agreement includes
customary representations and warranties and post-closing covenants, including indemnification obligations, subject to certain
limitations, on behalf of the parties with respect to the Asset Purchase Agreement. In addition, the Seller and certain members
of the Seller agreed, for a period of five (5) years, not to engage in any business that competes with the business formerly conducted
by Seller and/or sold by Seller to RLD or the business presently conducted by RLD or any affiliate of RLD or solicit employees
or customers of Seller or RLD or any affiliate of RLD.



5









BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)



The net assets acquired
were:



|Accounts receivable    |  | $ | 542   |  
|---------------------- |  | - | ----- | -
|Inventories            |  |   | 3,148 |  
|Prepaid expenses       |  |   | 30    |  
|Property and equipment |  |   | 670   |  
|Intangible assets      |  |   | 2,703 |  
|Goodwill               |  |   | 493   |  
|Accounts payable       |  |   | (529  | )
|Other accrued expenses |  |   | (37   | )
|                       |  | $ | 7,020 |  



The Company accounted
for the business combination using the acquisition method of accounting. The Company’s results of operations for the three
months and six months ended June 30, 2012, include the revenue and expenses of the acquired business since the date of acquisition.
The unaudited pro forma financial results for the three months and six months ended June 30, 2012 and 2011, combines the historical
results of the Seller with those of the Company as if this acquisition had been completed as of the beginning of each of the periods
presented. There were no material non-recurring pro forma adjustments directly attributable to this acquisition.



Pro Forma Combined
Statements of Operations



|                                                      |  | Three Months Ended June 30, |       |   | Six Months Ended June 30 |  
|----------------------------------------------------- |  | --------------------------- | ----- | - | ------------------------ | -
|                                                      |  | 2012                        |       |   | 2011                     |  
|Net sales                                             |  | $                           | 7,847 |   |                          | $
|Earnings (loss) from operations                       |  | $                           | (500  | ) |                          | $
|Net earnings (loss)                                   |  | $                           | (584  | ) |                          | $
|Basic and diluted net earnings (loss) per share       |  | $                           | (0.09 | ) |                          | $
|Basic and diluted weighted average shares outstanding |  |                             | 6,216 |   |                          |  



Note 4- Earnings (loss) Per Share



Earnings (loss) per
share is calculated in accordance with ASC Topic 260 “Earnings Per Share,” which provides for the calculation of “basic”
and “diluted” earnings (loss) per share. Basic earnings (loss) per share includes no dilution and is computed by dividing
net earnings by the weighted average number of common shares outstanding for the period.  Diluted earnings (loss) per share
reflect, in periods in which they have a dilutive effect, the effect of common shares issuable upon exercise of stock options.
The diluted share base excludes incremental shares of 1,328 and 450 related to stock options for the three and six month periods
ended June 30, 2012 and 2011, respectively. These shares were excluded due to their antidilutive effect.



6









BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)





Note 5 – New Accounting Pronouncements



In December 2011, the
Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2011-12 (“ASU 2011-12”),
Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive
Income in ASU 2011-05. ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component
of AOCI in both net income and OCI on the face of the financial statements. All other requirements in ASU No. 2011-05 are not affected
by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement
or in two separate but consecutive financial statements. These requirements are in effect for fiscal years, and interim periods
within those years, beginning after December 15, 2011. The adoption of this standard did not have a material impact on the Company’s
consolidated financial position and results of operations.



The FASB, the Emerging
Issues Task Force and the SEC have issued certain other accounting standards updates and regulations as of June 30, 2012 that will
become effective in subsequent periods; however, management of the Company does not believe that any of those updates would have
significantly affected the Company’s financial accounting measures or disclosures had they been in effect during 2012 or
2011, and it does not believe that any of those pronouncements will have a significant impact on the Company’s consolidated
financial statements at the time they become effective.



Note 6 – Inventories



Inventories net of reserves are summarized
as follows:



|                                                              |  | June 30, 2012 |        |   | December 31, 2011 |  
|------------------------------------------------------------- |  | ------------- | ------ | - | ----------------- | -
|Raw Materials                                                 |  | $             | 6,653  |   |                   | $
|Work in process                                               |  |               | 2,180  |   |                   |  
|Finished Goods                                                |  |               | 8,208  |   |                   |  
|                                                              |  |               | 17,041 |   |                   |  
|Less current inventory                                        |  |               | (9,791 | ) |                   |  
|                                                              |  |               | 7,250  |   |                   |  
|Less Reserve primarily for slow moving and obsolete inventory |  |               | (1,836 | ) |                   |  
|                                                              |  | $             | 5,414  |   |                   | $



Inventories are stated at the lower of cost,
determined by the first-in, first-out (“FIFO”) method, or market.



The Company periodically
analyzes anticipated product sales based on historical results, current backlog and marketing plans. Based on these analyses, the
Company anticipates that certain products will not be sold during the next twelve months. Inventories that are not anticipated
to be sold in the next twelve months, have been classified as non-current.



Approximately 48% and
47% of the non-current inventories were comprised of finished goods at June 30, 2012 and December 31, 2011, respectively. The Company
has established a program to use interchangeable parts in its various product offerings and to modify certain of its finished goods
to better match customer demands. In addition, the Company has instituted additional marketing programs to dispose of the slower
moving inventories.



The Company continually
analyzes its slow-moving, excess and obsolete inventories. Based on historical and projected sales volumes and anticipated selling
prices, the Company establishes reserves. If the Company does not meet its sales expectations, these reserves are increased. Products
that are determined to be obsolete are written down to net realizable value. The Company believes reserves are adequate and inventories
are reflected at net realizable value.



7









BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)





Note 7 – Debt



On August 6, 2008,
the Company entered into a Revolving Credit, Term Loan and Security Agreement with Sovereign Business Capital (“Sovereign”),
a division of Sovereign Bank (“Sovereign Agreement”), pursuant to which the Company obtained an $8,000 credit
facility from Sovereign (the “Sovereign Financing”). The Sovereign Financing originally consisted of (i) a $4,000
asset based revolving credit facility (“Revolver”) and (ii) a $4,000 term loan facility (“Term Loan”),
each with a three-year term.



The amounts which may
be borrowed under the Revolver are based on certain percentages of Eligible Receivables and Eligible Inventory, as such terms are
defined in the Sovereign Agreement. The obligations of the Company under the Sovereign Agreement are secured by substantially all
of the assets of the Company.



Under the Sovereign
Agreement, the Revolver bears interest at a rate per annum equal to the prime lending rate announced from time to time by Sovereign
(“Prime”) plus 0.25% or the LIBOR rate plus 3.00%. The Term Loan bears interest at a rate per annum equal to
Prime plus 0.50% or the LIBOR rate plus 3.25%. Prime was 3.25% on June 30, 2012.



On January 14, 2011,
the Company and Sovereign entered into a First Amendment to Revolving Credit, Term Loan and Security Agreement (the “First
Amendment”) with Sovereign, to amend the Sovereign Financing. The First Amendment (1) increased the maximum amount that
may be borrowed by the Company under the Revolver to $5,000 from $4,000, (2) extended the termination date of the Sovereign Agreement
from August 6, 2011 to January 15, 2013, (3) modified the definition of “Eligible Receivables” to increase the permitted
concentration percentage of certain customer receivables (as defined in the Sovereign Agreement) which are included in such calculation,
and (4) modified a certain financial covenant.



On February 1, 2012,
the Company entered into a Second Amendment to Revolving Credit, Term Loan and Security Agreement (the “Second Amendment”)
with Sovereign, to amend the Sovereign Financing. The Second Amendment (1) added RLD as a co-borrower, (2) increased the maximum
amount that may be borrowed by the Company under the Revolver to $8,500 from $5,000, (3) extended the termination date of the Sovereign
Agreement from January 15, 2013 to February 1, 2015, (4) modified the amounts that may be borrowed under the Revolver based on
certain percentages of Eligible Inventory, (as defined in the Sovereign Agreement) that are included in such calculation, (5) modified
certain financial covenants, and (6) increased the Term Loan to $4,350.



In August, 2012, the
Sovereign Agreement was amended to modify a certain financial covenant retroactively effective as of June 30, 2012, relative to
the trailing 12-month period ended on such date. Had Sovereign not retroactively amended such financial covenant, the Company would
not have been in compliance therewith as of June 30, 2012 and would have required a waiver from Sovereign. Sovereign has advised
the Company that had the retroactive amendment not been entered into, such waiver would have been granted.



Upon termination of
the Revolver, all outstanding borrowings under the Revolver are due. As of June 30, 2012, the Company had a $3,854 balance under
the Revolver. The Term Loan requires equal monthly principal payments of approximately $18 each, plus interest, with the remaining
balance due at maturity. As of June 30, 2012, the outstanding balance under the Tem Loan was $4,283.



The Sovereign Agreement
contains customary representations and warranties as well as affirmative and negative covenants, including certain financial covenants.
The Sovereign Agreement contains customary events of default, including, among others, non-payment of principal, interest or other
amounts when due.



8









BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)



Note 8 – Related Party Transactions



As of June 30, 2012
and December 31, 2011, the Chief Executive Officer was indebted to the Company in the amount of $126 and $130, respectively, for
which no interest has been charged. This indebtedness arose from a series of cash advances, the latest of which was advanced in
February 2002 and is included in other assets at June 30, 2012 and December 31, 2011. Payments on this indebtedness ceased in November
2008 when the Chief Executive Officer filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code and the
indebtedness became subject to the automatic stay provisions of the United States Bankruptcy Code. On July 29, 2009 a plan of reorganization
in connection with the Chief Executive Officer’s bankruptcy case was confirmed by the United States Bankruptcy Court for
the District of New Jersey.



Under the confirmed
plan of reorganization, the Chief Executive Officer will be obligated to pay a pro-rata share, with all other unsecured pre-petition
obligations, of the excess, if any, of his disposable income after the payment of all administrative claims and other expenses.
The actual amount that the Company may expect to receive pursuant to the confirmed plan and the date on which required
payments would commence are not presently determinable. Since May 2010, however, the Chief Executive Officer has made elective
payments to the Company to reduce the indebtedness. Such elective payments aggregated $15.



In December 2007, the
Company entered into an agreement to provide manufacturing, research and development and product support to Buffalo City Center
Leasing, LLC (“Buffalo City”) for an electronic on-board recorder that Buffalo City was producing for Turnpike
Global Technologies, LLC (which was purchased in 2010 by, and operates as a division of, XATA Corporation (“XATA”)).
A director of the Company is also the managing member and a vice president of Buffalo City and may be deemed to control the entity
which owns fifty percent (50%) of the membership interests of Buffalo City. The agreement with Buffalo City expired by its terms
in the first quarter of 2011, however, Buffalo City continued purchasing such product from the Company through July, 2011 on the
same terms and conditions. In the second quarter of 2011, the Company entered into a new agreement directly with XATA Corporation
(the “XATA Agreement”), which sets forth the terms and conditions of purchases by XATA of the next generation
of the product. The XATA Agreement also permits XATA to obtain financing from approved third party lenders to finance its purchases
from the Company. In November 2011, the Company and Buffalo City entered into a letter agreement (the “Buffalo City Agreement”)
to memorialize the agreement by which the Company approved Buffalo City to act as an approved third party lender to XATA and has
permitted Buffalo City (in this capacity) to purchase products from the Company on open account with a credit limit of $1,000,
the terms for payment of which were net 110 days after shipment. Under the terms of the XATA contract, obligations of Buffalo City
were guaranteed by XATA. During the first quarter of 2012, Buffalo City advised the Company that Buffalo City would no longer be
financing products as an approved third-party lender for XATA. As such, effective as of February 10, 2012, the Company and Buffalo
City terminated Buffalo City’s status as an approved lender under the Buffalo City Agreement. All amounts due from Buffalo
City to the Company under the Buffalo City Agreement have been fully paid. The Company received no revenue during 2012 from Buffalo
City. The Company received $936 and $1,557 in revenue from Buffalo City in the three and six months ended June 30, 2011, respectively.
In addition, the Company’s accounts receivable included $960 (21% of total accounts receivable) due from Buffalo City at
December 31, 2011. The Company continues to contract manufacture products directly for XATA under the XATA Agreement and the termination
of the Buffalo City Agreement has not had a material adverse impact on aggregate sales of these contract manufactured products.



Note 9 – Legal Proceedings



The Company is a party
to certain proceedings incidental to the ordinary course of its business, none of which, in the current opinion of management,
is likely to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash
flows. In addition, on June 19, 2012, K Tech Telecommunications, Inc. filed a patent infringement complaint against the Company
and RLD in the U.S. District Court for the Central District of California, captioned as K Tech v. Blonder Tongue Laboratories,
Inc. and R.L. Drake Holdings, LLC, CV12-05316 (the “Litigation”). The Litigation alleges that the Company
and RLD infringe one or more claims of U.S. Patent Nos. 6,785,903; 7,487,533; 7,761,893; and 7,984,469 (the “K Tech Patents”)
and seeks (a) a finding of patent infringement, (b) an injunction against the Company and RLD from further alleged infringement;
(c) an award of actual damage suffered by K Tech; and (d) an award of costs relating to the Litigation. The Litigation complaint
alleges that Company products DQMx-01, DQMx-02, DQMx-03, DQMx-04, DQMx-10, DQMx-11, DQMx-12, DQMx-13, DQMx-20, DQMx-21, DQMx-22,
DQMx-30, DQMx-31, DQMx-40, and MUX-2D-QAM infringe one or more of the K Tech Patents, and alleges that RLD products MQM6000l, MQM10000,
DQT1000, and MEQ1000 infringe one or more of the K Tech Patents. All of the aforementioned products are part of the Company’s
digital headend product category. At this time, given the recency of the filing, the Company has not been able to determine the
complete scope of claims or available defenses, or the potential outcome of the alleged claims of infringement. The Company does
presently believe there are reasoned grounds for finding that the K Tech Patents are invalid or unenforceable. The Company intends
to defend the Litigation instituted by K Tech. The Company has also commenced discussions with K Tech to potentially resolve the
Litigation relating to the K Tech Patents. In order to provide time for such discussions to move forward, the parties have mutually
agreed to extend the deadline by which the Company and RLD must respond to the complaint.



9









BLONDER TONGUE LABORATORIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

(unaudited)





Note 10 – Subsequent Events



The Company has evaluated subsequent events through the filing
of its consolidated financial statements with the SEC.



10







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



Forward-Looking Statements



In addition to historical
information, this Quarterly Report contains forward-looking statements regarding future events relating to such matters as anticipated
financial performance, business prospects, technological developments, new products, research and development activities and similar
matters. The Private Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities Exchange Act of 1934
provide safe harbors for forward-looking statements. In order to comply with the terms of these safe harbors, the Company notes
that a variety of factors could cause the Company’s actual results and experience to differ materially and adversely from
the anticipated results or other expectations expressed in the Company’s forward-looking statements. The risks and uncertainties
that may affect the operation, performance, development and results of the Company’s business include, but are not limited
to, those matters discussed herein in the section entitled Item 2 - Management’s Discussion and Analysis of Financial Condition
and Results of Operations. The words “believe,” “expect,” “anticipate,” “project,”
“target,” “intend,” “plan,” “seek,” “estimate,” “endeavor,”
“should,” “could,” “may” and similar expressions are intended to identify forward-looking statements.
In addition, any statements that refer to projections for our future financial performance, our anticipated growth trends in our
business and other characterizations of future events or circumstance are forward-looking statements. Readers are cautioned not
to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof.
The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that
arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from
time to time with the Securities and Exchange Commission, including without limitation, the Company’s Annual Report on Form
10-K for the year ended December 31, 2011 (See Item 1 – Business; Item 1A – Risk Factors; Item 3 – Legal Proceedings
and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations).



General



The Company was incorporated
in November, 1988, under the laws of Delaware as GPS Acquisition Corp. for the purpose of acquiring the business of Blonder-Tongue
Laboratories, Inc., a New Jersey corporation, which was founded in 1950 by Ben H. Tongue and Isaac S. Blonder to design, manufacture
and supply a line of electronics and systems equipment principally for the private cable industry. Following the acquisition, the
Company changed its name to Blonder Tongue Laboratories, Inc. The Company completed the initial public offering of its shares of
Common Stock in December, 1995.



Today the Company is
a technology-development and manufacturing company that delivers television signal encoding, transcoding, digital transport and
broadband product solutions for a broad range of applications. The markets served include cable televisions systems, the multi-dwelling
unit communities, the lodging/hospitality market, and institutional systems including hospitals, prisons and schools. The technology
requirements of these markets change rapidly and the Company’s research and development team is continually delivering high
performance-lower cost solutions to meet customers’ needs.



The Company’s
strategy is focused on the development of products for digital signal generation and transmission and, since 2008 the Company has
entered into and renewed various agreements for technologies in concert with its digital encoder and EdgeQAM line of products.
As a result, the Company continues to significantly expand its digital product lines. The continuing evolution of the Company’s
product lines will focus on the increased needs created in the digital space by Internet Protocol Television (“IPTV”),
digital standard definition (“SD”) and high definition (“HD”) video content and the transport
of these signals over state of the art broadband networks.



The Company has seen
a continuing shift in product mix from analog products to digital products and expects this shift to continue. Accordingly, any
substantial decrease in sales of analog products without a related increase in digital products could have a material adverse effect
on the Company’s results of operations, financial condition and cash flows.



In April 2010, the
Company obtained a $4.1 million purchase commitment for the first member of its EdgeQAM family of products (the “EQAM-400”)
from World Cinema Inc. (“World Cinema”), a supplier of free-to-guest digital and HD television to the hospitality
market. These shipments were made in the second and third quarters of 2010, during which time the EQAM-400 was exclusive to World
Cinema. Since then, the parties have agreed to extend the exclusivity arrangement, with the most recent extension occurring in
September, 2011 which extended exclusivity through the end of 2012. In connection with the most recent extension, World Cinema
committed to purchase approximately $2.2 million of EQAM-400 through the third quarter of 2012. World Cinema’s purchases
of this product were approximately $577,000 and $522,000 in the three months ended June 30, 2012 and 2011, respectively and $1,109,000
and $1,000,000 in the six months ended June 30, 2012 and 2011, respectively. Future purchase commitments by World Cinema would
allow them to further extend this exclusivity arrangement. The EQAM-400 product accepts HD content received by satellite via its
IP Gigabit Ethernet (GbE) input, adds content protection by utilizing Pro:IdiomTM encryption, and QAM modulates it for distribution
over standard coax networks.



11







On February 1, 2012,
the Company’s wholly-owned subsidiary, R. L. Drake Holdings, LLC (“RLD”), a Delaware limited liability
company, acquired substantially all of the assets and assumed certain specified liabilities of R. L. Drake, LLC, a Delaware limited
liability company (“Seller”) (the “RLD Acquisition”), pursuant to an Asset Purchase Agreement
of even date, by and among RLD, Seller, R. L. Drake Acquisition Corporation, a Delaware corporation, and WBMK Holding Company,
an Ohio corporation, as amended by a certain First Amendment to Asset Purchase Agreement dated February 3, 2012 (as so amended,
the “Asset Purchase Agreement”). The purchase price was approximately $7,020,000, which included a working capital
adjustment of approximately $545,000, plus contingent purchase price payments of up to $1,500,000 in the aggregate that may be
made over the three year period after closing if certain financial results are realized. The assets acquired from Seller include
assets used in the manufacturing and delivery of electronic communications solutions for cable television systems, digital television
reception, video signal distribution and digital video encoding, including equipment, supplies and other tangible personal property,
inventory, accounts receivable, business records, trademarks and other intellectual property rights. The Asset Purchase Agreement
includes customary representations and warranties and post-closing covenants, including indemnification obligations, subject to
certain limitations, on behalf of the parties with respect to the Asset Purchase Agreement. In addition, the Seller and certain
members of the Seller agreed, for a period of five (5) years, not to engage in any business that competes with the business formerly
conducted by Seller and/or sold by Seller to RLD or the business presently conducted by RLD or any affiliate of RLD or solicit
employees or customers of Seller or RLD or any affiliate of RLD.



RLD manufactures and
distributes similar products to those currently being produced by the Company. The acquisition allows the Company to leverage the
combined research and development and sales and marketing departments to shorten the development and manufacturing cycle and deliver
a more complete compliment of business and product solutions for the markets the Company serves.



The Company’s
manufacturing is allocated primarily between its facility in Old Bridge, New Jersey and a key contract manufacturer located in
the People’s Republic of China (“PRC”). The Company currently manufactures most of its digital products,
including the latest encoder and EdgeQAM collections at its New Jersey facility. Since 2007 the Company has transitioned and continues
to manufacture certain high volume, labor intensive products, including many of the Company’s analog products, in the PRC,
pursuant to a manufacturing agreement that governs the production of products that may from time to time be the subject of purchase
orders submitted by (and in the discretion of) the Company. The Company may transition additional products to the PRC if determined
by the Company to be advantageous based upon changing business and market conditions. Manufacturing products both at the Company’s
Old Bridge facility as well as in the PRC, enables the Company to realize cost reductions while maintaining a competitive position
and time-to-market advantage. As a result of the RLD Acquisition, the Company assumed certain post-closing obligations for a leased
manufacturing, engineering, sales and administrative facility in Franklin, Ohio at which the RLD products were being manufactured.
The lease for this facility expires in November, 2012. The Company does not intend to renew this lease, however it does anticipate
securing alternative smaller space in or around Franklin, Ohio. The Company began the process of transitioning the manufacture
of RLD products from the Ohio facility to the Old Bridge facility shortly after the closing of the RLD Acquisition and has substantially
completed this transition during July 2012.



The Company may, from
time to time, provide manufacturing, research and development and product support services for other companies’ products.
In December 2007, the Company entered into an agreement to provide manufacturing, research and development and product support
to Buffalo City Center Leasing, LLC (“Buffalo City”) for an electronic on-board recorder that Buffalo City was
producing for Turnpike Global Technologies, LLC (which was purchased in 2010 by, and operates as a division of, XATA Corporation
(“XATA”)). A director of the Company is also the managing member and a vice president of Buffalo City and may
be deemed to control the entity which owns fifty percent (50%) of the membership interests of Buffalo City. The agreement with
Buffalo City expired by its terms in the first quarter of 2011, however, Buffalo City continued purchasing such product from the
Company through July, 2011 on the same terms and conditions. In the second quarter of 2011, the Company entered into a new agreement
directly with XATA Corporation (the “XATA Agreement”), which sets forth the terms and conditions of purchases
by XATA of the next generation of the product. The XATA Agreement also permits XATA to obtain financing from approved third party
lenders to finance its purchases from the Company. In November 2011, the Company and Buffalo City entered into a letter agreement
(the “Buffalo City Agreement”) to memorialize the agreement by which the Company approved Buffalo City to act
as an approved third party lender to XATA and has permitted Buffalo City (in this capacity) to purchase products from the Company
on open account with a credit limit of $1,000,000, the terms for payment of which were net 110 days after shipment. Under the terms
of the XATA Agreement, obligations of Buffalo City to the Company were guaranteed by XATA. During the first quarter of 2012, Buffalo
City advised the Company that Buffalo City would no longer be financing products as an approved third-party lender for XATA. As
such, effective as of February 10, 2012, the Company and Buffalo City terminated Buffalo City’s status as an approved lender
under the Buffalo City Agreement. All amounts due from Buffalo City to the Company under the Buffalo City Agreement have been fully
paid. The Company received no revenue during 2012 from Buffalo City. The Company received $936,000 and $1,557,000 in revenue from
Buffalo City in the three and six months ended June 30, 2011, respectively. In addition, the Company’s accounts receivable
included $960,000 (21% of total accounts receivable) due from Buffalo City at December 31, 2011. The Company continues to contract
manufacture products directly for XATA under the XATA Agreement and the termination of the Buffalo City Agreement has not had a
material adverse impact on aggregate sales of these contract manufactured products.



12







Results of Operations



Second three months of 2012 Compared
with second three months of 2011



Net Sales.
Net sales increased $597,000 or 8.3%, to $7,803,000 in the second three months of 2012 from $7,206,000 in the second three months
of 2011. The increase is primarily attributed to an increase in sales of digital video headend products, offset by a decrease in
sales of the ClassRoomEdgeTM product line, the digital transition product line and contract manufactured products. Sales of
digital video headend products were $3,841,000 and $2,467,000, ClassRoomEdgeTM products were zero and $174,000, digital transition
products were $39,000 and $230,000 and contract manufactured products were $571,000 and $939,000 in the second three months of
2012 and 2011, respectively. The Company has experienced and expects to continue to experience a shift in product mix from analog
products to digital products. The Company’s sales of contract manufactured products have not been adversely affected by the
termination of its business with Buffalo City, inasmuch as those sales have generally been replaced by direct sales to XATA. The
RLD Acquisition contributed $1,851,000 to net sales for the second three months of 2012.



Cost of Goods Sold.Cost of goods sold increased to $5,200,000 for the second three months of 2012 from $4,612,000 for the second three months
of 2011 and increased as a percentage of sales to 66.6% from 64.0%. The increase was primarily due to an increase in sales of lower
margin products. The increase as a percentage of sales was primarily attributed to an increase in inventory reserve of $222,000,
an overall reduction in manufacturing overhead, as well as a less favorable product mix. The Company expects cost of goods sold
as a percentage of sales to decrease in the remaining quarters of 2012 as products manufactured by RLD in Ohio will have been transitioned
to the Old Bridge facility and as overall product mix is anticipated to improve.



Selling Expenses.
Selling expenses increased to $822,000 for the second three months of 2012 from $593,000 in the second three months of 2011, and
increased as a percentage of sales to 10.5% for the second three months of 2012 from 8.2% in the second three months of 2011. The
$229,000 increase was primarily the result of an increase in salary expense (including fringe benefits) of $143,000 due to increased
headcount and an increase in travel and entertainment expense of $29,000, both primarily related to the RLD Acquisition. The percentage
increase was also the result of the ongoing operation of RLD.



General and Administrative
Expenses. General and administrative expenses increased to $1,350,000 for the second three months of 2012 from $1,168,000 for
the second three months of 2011, and increased as a percentage of sales to 17.2% for the second three months of 2012 from 16.2%
for the second three months of 2011. The $182,000 increase was primarily the result of increased salary expense (including fringe
benefits) of $114,000 due to increased headcount, and increased amortization expense of $64,000 relating to intangible assets,
all associated with the RLD Acquisition. The percentage increase was primarily the result of these same increases.



Research and Development
Expenses. Research and development expenses increased to $930,000 in the second three months of 2012 from $675,000 in the second
three months of 2011 and increased as a percentage of sales to 11.9% for the second three months of 2012 from 9.4% for the second
three months of 2011. This $255,000 increase is primarily the result of an increase in salary expense (including fringe benefits)
of $202,000 associated with the increased headcount of ongoing operation of RLD. The percentage increase was primarily the result
of these same increases. These transitional increases were contemplated in connection with the RLD Acquisition; however the Company
is presently undertaking an evaluation of its combined research and development capabilities to determine the extent to which future
efficiencies can be realized.



Operating Income
(Loss). Operating loss of $(499,000) for the second three months of 2012 represents a decrease from the operating income of
$158,000 for the second three months of 2011 (due to costs incurred in connection with the acquisition of RLD). Operating income
(loss) as a percentage of sales was (6.4%) in the second three months of 2012 compared to 2.2% in the second three months of 2011.



13







Other Expense.
Interest expense increased to $84,000 in the second three months of 2012 from $53,000 in the second three months of 2011. The increase
is the result of higher average borrowing.



Income Taxes. The current provision for income
taxes for the second three months of 2012 and 2011 was zero.  A valuation allowance was recorded for the benefit of the
2011 tax loss and the second quarter 2012 impact was not material.



First six months of 2012 Compared with
first six months of 2011



Net Sales.
Net sales increased $1,107,000, or 8.4%, to $14,311,000 in the first six months of 2012 from $13,204,000 in the first six months
of 2011. The increase is primarily attributed to an increase in sales of digital video headend products offset by a reduction in
ClassRoomEdgeTM product line sales and contract manufactured product sales. Sales of digital video headend products were $6,474,000
and $4,604,000, ClassRoomEdgeTM product sales were $6,000 and $445,000 and contract manufactured product sales were $1,146,000
and $1,563,000 in the first six months of 2012 and 2011, respectively. The Company has experienced and expects to continue to experience
a shift in product mix from analog products to digital products. The Company’s sales of contract manufactured products have
not been adversely affected by the termination of its business with Buffalo City, inasmuch as those sales have generally been replaced
by direct sales to XATA. The RLD Acquisition contributed $3,252,000 to net sales for the first six months of 2012.



Cost of Goods Sold.Cost of goods sold increased to $9,797,000 for the first six months of 2012 from $8,453,000 for the first six months of 2011
and increased as a percentage of sales to 68.5% from 64.0%. The increase was primarily due to an increase in sales of lower margin
products. The increase as a percentage of sales was primarily attributed to an increase in inventory reserve of $437,000, an overall
reduction in manufacturing overhead, as well as a less favorable product mix. The Company expects cost of goods sold as a percentage
of sales to decrease in the remaining quarters of 2012 as products manufactured by RLD in Ohio will have been transitioned to the
Old Bridge facility and as overall product mix is anticipated to improve.



Selling Expenses.
Selling expenses increased to $1,622,000 for the first six months of 2012 from $1,260,000 in the first six months of 2011, and
increased as a percentage of sales to 11.3% for the first six months of 2012 from 9.5% in the first six months of 2011. The $362,000
increase was primarily the result of an increase in salary expense (including fringe benefits) of $289,000 due to increased headcount
and an increase in travel and entertainment expense of $49,000, both primarily related to the RLD Acquisition. The percentage increase
was also the result of the ongoing operation of RLD.



General and Administrative
Expenses. General and administrative expenses increased to $2,947,000 for the first six months of 2012 from $2,266,000 for
the first six months of 2011, and increased as a percentage of sales to 20.5% for the first six months of 2012 from 17.2% for the
first six months of 2011. The $681,000 increase was primarily the result of increased professional fees of $286,000, increased
salary expense (including fringe benefits) of $242,000 due to increased headcount, and increased amortization expense of $106,000
relating to intangible assets, all associated with the RLD Acquisition. The percentage increase was primarily the result of these
same increases.



Research and Development
Expenses. Research and development expenses increased to $1,837,000 in the first six months of 2012 from $1,339,000 in the
first six months of 2011 and increased as a percentage of sales to 12.8% for the first six months of 2012 from 10.1% for the first
six months of 2011. This $498,000 increase is primarily the result of an increase in salary expense (including fringe benefits)
of $382,000 associated with the increased headcount of ongoing operation of RLD, as well as an increase in amortization expense
of $29,000 relating to license fees. The percentage increase was primarily the result of these same increases. These transitional
increases were contemplated in connection with the RLD Acquisition; however the Company is presently undertaking an evaluation
of its combined research and development capabilities to determine the extent to which future efficiencies can be realized.



Operating Income
(Loss). Operating loss of $(1,892,000) for the first six months of 2012 represents an increase from the operating loss of $(114,000)
for the first six months of 2011 (due to costs incurred in connection with the acquisition of RLD). Operating loss as a percentage
of sales was (13.2%) in the first six months of 2012 compared to (0.9%) in the first six months of 2011.



Other Expense.
Interest expense increased to $171,000 in the first six months of 2012 from $97,000 in the first six months of 2011. The increase
is the result of higher average borrowing.



Income Taxes.
The current provision for income taxes for the first six months of 2012 and 2011 was zero.  A valuation allowance
was recorded for the benefit of the 2011 tax loss and the six month 2012 impact was not material



14







Liquidity and Capital Resources



As of June 30, 2012
and December 31, 2011, the Company’s working capital was $8,044,000 and $11,838,000, respectively. The decrease in working
capital is primarily due to an increase in the Revolver of $3,854,000 due to the RLD Acquisition.



The Company’s
net cash provided by operating activities for the six month period ended June 30, 2012 was $1,310,000, compared to net cash provided
by operating activities of $411,000 for the six month period ended June 30, 2011, primarily due to an increase in accounts payable
of $1,978,000.



Cash used in investing
activities for the six month period ended June 30, 2012 was $7,275,000, of which $7,020,000 was attributable to the RLD Acquisition.



Cash provided by financing
activities was $5,325,000 for the first six months of 2012, which was comprised of borrowings on the Revolver of $3,854,000 and
additional borrowings under the Term Loan of $1,550,000 for the RLD Acquisition and additional debt borrowings of $51,000, offset
by repayment of debt of $130,000.



On August 6, 2008,
the Company entered into a Revolving Credit, Term Loan and Security Agreement with Sovereign Business Capital (“Sovereign”),
a division of Sovereign Bank (“Sovereign Agreement”), pursuant to which the Company obtained an $8,000,000 credit
facility from Sovereign (the “Sovereign Financing”). The Sovereign Financing consisted of (i) a $4,000,000 asset-based
revolving credit facility (“Revolver”) and (ii) a $4,000,000 term loan facility (“Term Loan”),
each with a three-year term. The amounts which may be borrowed under the Revolver are based on certain percentages of Eligible
Receivables and Eligible Inventory, as such terms are defined in the Sovereign Agreement. The obligations of the Company under
the Sovereign Agreement are secured by substantially all of the assets of the Company.



Under the Sovereign
Agreement, the Revolver bears interest at a rate per annum equal to the prime lending rate announced from time to time by Sovereign
(“Prime”) plus 0.25% or the LIBOR rate plus 3.00%. The Term Loan bears interest at a rate per annum equal to
Prime plus 0.50% or the LIBOR rate plus 3.25%. Prime was 3.25% at June 30, 2012.



On January 14, 2011,
the Company entered into a First Amendment to Revolving Credit, Term Loan and Security Agreement (the “First Amendment”)
with Sovereign, to amend the Sovereign Financing. The First Amendment (1) increased the maximum amount that may be borrowed by
the Company under the Revolver to $5,000,000 from $4,000,000, (2) extended the termination date of the Sovereign Agreement from
August 6, 2011 to January 15, 2013, (3) modified the definition of “Eligible Receivables” to increase the permitted
concentration percentage of certain customer receivables (as defined in the Sovereign Agreement) which are included in such calculation,
and (4) modified a certain financial covenant.



On February 1, 2012,
the Company entered into a Second Amendment to Revolving Credit, Term Loan and Security Agreement (the “Second Amendment”)
with Sovereign, to amend the Sovereign Financing. The Second Amendment (1) added RLD as a co-borrower, (2) increased the maximum
amount that may be borrowed by the Company under the Revolver to $8,500,000 from $5,000,000, (3) extended the termination date
of the Sovereign Agreement from January 15, 2013 to February 1, 2015, (4) modified the amounts that may be borrowed under the Revolver
based on certain percentages of Eligible Inventory, (as defined in the Sovereign Agreement) that are included in such calculation,
(5) modified certain financial covenants, and (6) increased the Term Loan to $4,350,000.



In August, 2012, the
Sovereign Agreement was amended to modify a certain financial covenant retroactively effective as of June 30, 2012, relative to
the trailing 12-month period ended on such date. Had Sovereign not retroactively amended such financial covenant, the Company would
not have been in compliance therewith as of June 30, 2012 and would have required a waiver from Sovereign. Sovereign has advised
the Company that had the retroactive amendment not been entered into, such waiver would have been granted.



Upon termination of
the Revolver, all outstanding borrowings under the Revolver are due. The Term Loan requires equal monthly principal payments of
approximately $18,000 each, plus interest, with the remaining balance due at maturity. The outstanding principal balance of the
Term Loan was $4,283,000 at June 30, 2012.



The Sovereign Agreement
contains customary representations and warranties as well as affirmative and negative covenants, including certain financial covenants.
The Sovereign Agreement contains customary events of default, including, among others, non-payment of principal, interest or other
amounts when due.



15







The Company’s
primary sources of liquidity are its existing cash balances, cash generated from operations and amounts available under the Sovereign
Financing. As of June 30, 2012, the Company had approximately $3,854,000 outstanding under the Revolver and $3,207,000 of additional
availability for borrowing under the Revolver. The Company anticipates these sources of liquidity will be sufficient to fund its
operating activities, anticipated capital expenditures and debt repayment obligations for the next twelve months.



The Company’s
primary long-term obligations are for payment of interest and principal on the Company’s Revolver and Term Loan, both of
which expire on February 1, 2015. The Company expects to use cash generated from operations to meet its long-term debt obligations,
and anticipates refinancing its long-term debt obligations at maturity. The Company considers opportunities to refinance its existing
indebtedness based on market conditions. Although the Company may refinance all or part of its existing indebtedness in the future
and will be required to do so by February 1, 2015, there can be no assurances that it will do so. Changes in the Company’s
operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may require the Company to seek
additional debt or equity financing. There can be no assurance that financing will be available on acceptable terms or at all.
Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.
The Company also expects to make financed and unfinanced long-term capital expenditures from time to time in the ordinary course
of business, which were $81,000 and $431,000 in the six months ended June 30, 2012 and the year ended December 31, 2011, respectively.
The Company expects to use cash generated from operations, amounts available under its credit facility and purchase-money financing
to meet any anticipated long-term capital expenditures.



New Accounting Pronouncements



See Note 5 of the Notes
to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates
of adoption and the effects on the Company’s consolidated financial position and results of operations.



ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not applicable
to smaller reporting companies.



ITEM
4. CONTROLS AND PROCEDURES



The Company maintains
a system of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed
in the Company’s reports filed or submitted pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that such information is accumulated and communicated to the Company’s management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  The
Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive
Officer and Chief Financial Officer, of the design and operation of the Company’s disclosure controls and procedures as of
the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial
Officer concluded that the Company’s disclosure controls and procedures were effective at June 30, 2012.



During the quarter
ended June 30, 2012, there have been no changes in the Company’s internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



16







PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



The Company is a party
to certain proceedings incidental to the ordinary course of its business, none of which, in the current opinion of management,
is likely to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash
flows. In addition, on June 19, 2012, K Tech Telecommunications, Inc. filed a patent infringement complaint against the Company
and RLD in the U.S. District Court for the Central District of California, captioned as K Tech v. Blonder Tongue Laboratories,
Inc. and R.L. Drake Holdings, LLC, CV12-05316 (the “Litigation”). The Litigation alleges that the Company
and RLD infringe one or more claims of U.S. Patent Nos. 6,785,903; 7,487,533; 7,761,893; and 7,984,469 (the “K Tech Patents”)
and seeks (a) a finding of patent infringement, (b) an injunction against the Company and RLD from further alleged infringement;
(c) an award of actual damage suffered by K Tech; and (d) an award of costs relating to the Litigation. The Litigation complaint
alleges that Company products DQMx-01, DQMx-02, DQMx-03, DQMx-04, DQMx-10, DQMx-11, DQMx-12, DQMx-13, DQMx-20, DQMx-21, DQMx-22,
DQMx-30, DQMx-31, DQMx-40, and MUX-2D-QAM infringe one or more of the K Tech Patents, and alleges that RLD products MQM6000l, MQM10000,
DQT1000, and MEQ1000 infringe one or more of the K Tech Patents. All of the aforementioned products are part of the Company’s
digital headend product category. At this time, given the recency of the filing, the Company has not been able to determine the
complete scope of claims or available defenses, or the potential outcome of the alleged claims of infringement. The Company does
presently believe there are reasoned grounds for finding that the K Tech Patents are invalid or unenforceable. The Company intends
to defend the Litigation instituted by K Tech. The Company has also commenced discussions with K Tech to potentially resolve the
Litigation relating to the K Tech Patents. In order to provide time for such discussions to move forward, the parties have mutually
agreed to extend the deadline by which the Company and RLD must respond to the complaint.



As of June 30, 2012,
the Company’s Chief Executive Officer was indebted to the Company in the amount of $126,000, for which no interest has been
charged. This indebtedness arose from a series of cash advances made to the Chief Executive Officer, the latest of which was advanced
in February, 2002. Payments on this indebtedness ceased in November 2008 when the Chief Executive Officer and his spouse filed
a voluntary petition under Chapter 11 of the United States Bankruptcy Code and the indebtedness became subject to the automatic
stay provisions of the United States Bankruptcy Code. On July 29, 2009 a plan of reorganization in connection with the Chief Executive
Officer’s bankruptcy case was confirmed by the United States Bankruptcy Court for the District of New Jersey.



Under the confirmed
plan of reorganization, the Chief Executive Officer will be obligated to pay a pro-rata share, with all other unsecured pre-petition
obligations, of the excess, if any, of his disposable income after the payment of all administrative claims and other expenses.
The actual amount that the Company may expect to receive pursuant to the confirmed plan and the date on which required payments
would commence are not presently determinable. Since May 2010, however, the Chief Executive Office has made elective payments to
the Company to reduce the indebtedness. Such elective payments aggregated $15,000 through June 30, 2012.



ITEM5. OTHER INFORMATION



As disclosed above under the heading “Liquidity
and Capital Resources,” the Company amended the Sovereign Agreement on August 10, 2012. The description of this amendment
herein is qualified in its entirety by reference to the complete terms and conditions of the amendment, which is filed as Exhibit
10.1 to this Quarterly Report on Form 10-Q.



ITEM6. EXHIBITS



The exhibits are listed in
the Exhibit Index appearing at page 19 herein.



17







SIGNATURES



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



|                      | BLONDER TONGUE LABORATORIES, INC.
|--------------------- | ---------------------------------
|                      |                                  
|Date: August 14, 2012 | By:                              
|                      |                                  
|                      |                                  



| | By: | /s/ Eric Skolnik                                 
| | --- | -------------------------------------------------
| |     | Eric Skolnik                                     
| |     | Senior Vice President and Chief Financial Officer
| |     | (Principal Financial Officer)                    



18







EXHIBIT INDEX



|Exhibit # |  | Description                                                                                                                                                                                          |  | Location                                                                                                                            
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|3.1       |  | Restated Certificate of Incorporation of Blonder Tongue Laboratories, Inc.                                                                                                                           |  | Incorporated by reference from Exhibit 3.1 to S-1 Registration Statement No. 33-98070 originally filed October 12, 1995, as amended.
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|3.2       |  | Restated Bylaws of Blonder Tongue Laboratories, Inc., as amended.                                                                                                                                    |  | Incorporated by reference from Exhibit 3.2 to Annual Report on Form 10-K/A originally filed May 9, 2008.                            
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|10.1      |  | Third Amendment to Revolving Credit, Term Loan and Security Agreement, dated August 10, 2012, between Sovereign Business Capital and Blonder Tongue Laboratories, Inc. and R. L. Drake Holdings, LLC |  | Filed herewith.                                                                                                                     
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|31.1      |  | Certification of James A. Luksch pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                          |  | Filed herewith.                                                                                                                     
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|31.2      |  | Certification of Eric Skolnik pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                             |  | Filed herewith.                                                                                                                     
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     
|32.1      |  | Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                 |  | Filed herewith.                                                                                                                     
|          |  |                                                                                                                                                                                                      |  |                                                                                                                                     



19