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| [      X ] | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT      OF  1934 |
|------------|-----------------------------------------------------------------------------------------------------------|
|       | For      the fiscal year ended   March 29,      2008 ,                                          |

| [    ] | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|----------------------------|----------------------------------------------------------------------------------------------------|
|                       | For      the transition period from ____________ to  ____________.                                 |

|   | Commission      File No. 0-12719 |
|--------|----------------------------------|

| GIGA-TRONICS      INCORPORATED                             |
|------------------------------------------------------------|
| (Exact      name of registrant as specified in itscharter) |

| California                                                          |   | 94-2656341                                |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification No.) |
|                                                                |   |                                      |
| 4650      Norris Canyon Road, San Ramon, CA                         |   | 94583                                     |
| (Address      of principal executive offices)                       |   | (Zip      Code)                           |

|   | Registrant’s      telephone number, including area code:  (925)      328-4650 |
|--------|-----------------------------------------------------------------------------------------------|

|   | Securities      registered pursuant to Section 12(b) of theAct: |
|--------|-----------------------------------------------------------------|

| Title      of each class        |   | Name      of each exchange on which registered |
|---------------------------------|--------|------------------------------------------------|
| Common      Stock, No par value |   | The      NASDAQ Stock Market LLC               |

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

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| Large      accelerated filer                       | [         ] |   | Accelerated      filer         | [         ] |
|----------------------------------------------------|----------------------------|--------|--------------------------------|----------------------------|
|                                               |                       |   |                           |                       |
| Non-accelerated      filer                         | [         ] |   | Smaller      reporting company | [ X      ]                 |
| (Do      not check if a smaller reporting company) |                       |   |                           |

| PART      OF FORM 10-K |   | DOCUMENT                                                                                                                                                                                  |
|------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PART      III          |   | Registrant’s      PROXY STATEMENT for its 2008 Annual Meeting of Shareholders to be filed no      later than 120 days after the close of the fiscal year ended March 29,      2008. |

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TABLE

| PART      I       |     |
|-------------------|----------|
|              | ITEM 1.  | DESCRIPTION      OF BUSINESS |
|              | ITEM 1A. | RISK      FACTORS |
|              | ITEM 1B. | UNRESOLVED      STAFF COMMENTS |
|              | ITEM 2.  | DESCRIPTION      OF PROPERTY |
|              | ITEM 3.  | LEGAL      PROCEEDINGS |
|              | ITEM 4.  | SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS |
| PART      II      |     |
|              | ITEM 5.  | MARKET      FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS |
|              | ITEM 6.  | SELECTED      FINANCIAL DATA |
|              | ITEM 7.  | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|              | ITEM 7A. | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|              | ITEM 8.  | FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA |
|              | ITEM 9.  | CHANGES      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURES |
|              | ITEM 9A. | CONTROLS      AND PROCEDURES |
|              | ITEM 9B. |  OTHER      INFORMATION |
| PART      III     |     |
|              | ITEM 10. | DIRECTOR,      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT |
|              | ITEM 11. | EXECUTIVE      COMPENSATION |
|              | ITEM 12. | SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED      SHAREHOLDER MATTERS |
|              | ITEM 13. | CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR      INDEPENDENCE |
|              | ITEM 14. | PRINCIPAL      ACCOUNTANT FEES AND SERVICES |
| PART      IV      |     |
|              | ITEM 15. | EXHIBITS      AND FINANCIAL STATEMENTS SCHEDULES |
| SIGNATURES        |
| EXHIBIT      21   |     |
| EXHIBIT      23.1 |
| EXHIBIT      31.1 |
| EXHIBIT      31.2 |
| EXHIBIT      32.1 |
| EXHIBIT      32.2 |

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| Geographic      Distribution of Net Sales |   |
|-------------------------------------------|--------|
| (Dollars      in thousands)               |   | 2008 |   |   | Percent |   |   | 2007 |   |   | Percent |   |
| Domestic                                  |   | $ | 11,348 |   |   |   | 61.9 | % |   | $ | 14,218 |   |   |   | 78.8 | % |
| International                             |   |   | 6,983 |   |   |   | 38.1 | % |   |   | 3,830 |   |   |   | 21.2 | % |

ITEM 1A

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ITEM2

ITEM3.

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ITEM5

|                |      2008 |   | High   |   |   | Low    |   |         2007 |   | High                |   |   | Low  |   |
|---------------------|------------------------------------|--------|--------|--------|--------|--------|--------|------------------------------------------------------|--------|---------------------|--------|--------|------|--------|
| First      Quarter  | (4/1      - 6/30)                  |   | $      | 2.22   |   |   | $      | 1.61                                                 |   | (3/26      - 6/24)  |   | $      | 2.89 |   |   | $ | 1.78 |   |
| Second      Quarter | (7/1      - 9/29)                  |   |   | 2.36   |   |   |   | 1.62                                                 |   | (6/25      - 9/30)  |   |   | 1.94 |   |   |   | 1.29 |   |
| Third      Quarter  | (9/30      - 12/29)                |   |   | 3.85   |   |   |   | 1.71                                                 |   | (10/1      - 12/30) |   |   | 2.45 |   |   |   | 1.39 |   |
| Fourth      Quarter | (12/30      - 3/29)                |   |   | 1.87   |   |   |   | 1.27                                                 |   | (12/31      - 3/31) |   |   | 2.97 |   |   |   | 1.83 |   |

| Equity      Compensation Plan Information   |   |
|---------------------------------------------|--------|
|                                        |   | No.      of securities to be issued upon exercise of outstanding option, warrants      and rights |   |   | Weighted      average exercise price of outstanding option, warrants and      rights |   |   | No.      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in column      (a)) |   |
| Plan      Category                          |   | (a) |   |   | (b) |   |   | (c) |   |
| Equity      compensation plans approved     |   |   |   |   |   |   |   |   |   |
| by      security holders                    |   |   | 855,650 |   |   | $ | 2.04 |   |   |   | 445,225 |   |
| Equity      compensation plans not approved |   |   |   |   |   |   |   |   |   |   |   |   |
| by      security holders                    |   |   | n/a |   |   |   | n/a |   |   |   | n/a |   |
| Total                                       |   |   | 855,650 |   |   | $ | 2.04 |   |   |   | 445,225 |   |

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| SELECTED CONSOLIDATED      FINANCIAL DATA       |   |
|-------------------------------------------------|--------|
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Summary      of Operations:                     |   | Years      Ended |   |
|  (In      thousands except per share data) |   | March      29, 2008 |   |   | March      31, 2007 |   |   | March      25, 2006 |   |   | March      26, 2005 |   |   | March      27, 2004 |   |
| Net      sales                                  |   | $ | 18,331 |   |   | $ | 18,048 |   |   | $ | 20,620 |   |   | $ | 21,477 |   |   | $ | 17,491 |   |
| Gross      profit                               |   |   | 7,748 |   |   |   | 7,546 |   |   |   | 8,300 |   |   |   | 9,598 |   |   |   | 4,736 |   |
| Operating      expenses                         |   |   | 7,939 |   |   |   | 9,548 |   |   |   | 9,316 |   |   |   | 8,760 |   |   |   | 9,179 |   |
| Interest      income, net                       |   |   | 36 |   |   |   | 108 |   |   |   | 32 |   |   |   | - |   |   |   | 7 |   |
| Pre-tax      (loss) income from continuing      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| operations                                      |   |   | (201 | ) |   |   | (1,894 | ) |   |   | (984 | ) |   |   | 849 |   |   |   | (4,440 | ) |
| Provision      for income taxes                 |   |   | 2 |   |   |   | 1 |   |   |   | 4 |   |   |   | 4 |   |   |   | 4 |   |
| (Loss)      income from continuing operations   |   |   | (203 | ) |   |   | (1,895 | ) |   |   | (988 | ) |   |   | 845 |   |   |   | (4,444 | ) |
| (Loss)      income on discontinued operations,  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net      of income taxes                        |   |   | (31 | ) |   |   | 28 |   |   |   | 27 |   |   |   | (233 | ) |   |   | (2,377 | ) |
|  Net      (loss) income                    |   | $ | (234 | ) |   | $ | (1,867 | ) |   | $ | (961 | ) |   | $ | 612 |   |   | $ | (6,821 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      (loss) earnings per share:           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                 |   | $ | (0.04 | ) |   | $ | (0.40 | ) |   | $ | (0.21 | ) |   | $ | 0.18 |   |   | $ | (0.94 | ) |
| On      discontinued operations                 |   |   | (0.01 | ) |   |   | 0.01 |   |   |   | 0.01 |   |   |   | (0.05 | ) |   |   | (0.51 | ) |
| Net      (loss) earnings per share - basic      |   | $ | (0.05 | ) |   | $ | (0.39 | ) |   | $ | (0.20 | ) |   | $ | 0.13 |   |   | $ | (1.45 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      (loss) earnings per share:         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                 |   | $ | (0.04 | ) |   | $ | (0.40 | ) |   | $ | (0.21 | ) |   | $ | 0.18 |   |   | $ | (0.94 | ) |
| On      discontinued operations                 |   |   | (0.01 | ) |   |   | 0.01 |   |   |   | 0.01 |   |   |   | (0.05 | ) |   |   | (0.51 | ) |
| Net      (loss) earnings per share - diluted    |   | $ | (0.05 | ) |   | $ | (0.39 | ) |   | $ | (0.20 | ) |   | $ | 0.13 |   |   | $ | (1.45 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      of common stock - basic             |   |   | 4,813 |   |   |   | 4,809 |   |   |   | 4,782 |   |   |   | 4,725 |   |   |   | 4,704 |   |
| Shares      of common stock - diluted           |   |   | 4,813 |   |   |   | 4,809 |   |   |   | 4,782 |   |   |   | 4,741 |   |   |   | 4,704 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Position:                        |   | Years      Ended |   |
|  (In      thousands except per share data) |   | March      29, 2008 |   |   | March      31, 2007 |   |   | March      25, 2006 |   |   | March      26, 2005 |   |   | March      27, 2004 |   |
| Current      ratio                              |   |   | 3.55 |   |   |   | 3.09 |   |   |   | 3.93 |   |   |   | 4.29 |   |   |   | 2.92 |   |
| Working      Capital                            |   | $ | 7,131 |   |   | $ | 7,280 |   |   | $ | 8,856 |   |   | $ | 9,337 |   |   | $ | 7,997 |   |
| Total      assets                               |   | $ | 10,361 |   |   | $ | 11,161 |   |   | $ | 12,346 |   |   | $ | 12,961 |   |   | $ | 13,733 |   |
| Shareholders'      equity                       |   | $ | 7,392 |   |   | $ | 7,393 |   |   | $ | 9,098 |   |   | $ | 9,812 |   |   | $ | 9,196 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percentage      Data:                           |   | Years      Ended |   |
|  (Percentage      of net sales)            |   | March      29, 2008 |   |   | March      21, 2007 |   |   | March      25, 2006 |   |   | March      26, 2005 |   |   | March      27, 2004 |   |
| Gross      profit                               |   |   | 42.3 | % |   |   | 41.8 | % |   |   | 40.3 | % |   |   | 44.7 | % |   |   | 27.1 | % |
| Operating      expenses                         |   |   | 43.3 | % |   |   | 52.9 | % |   |   | 45.2 | % |   |   | 40.8 | % |   |   | 52.5 | % |
| Interest      income, net                       |   |   | 0.2 | % |   |   | 0.6 | % |   |   | 0.1 | % |   |   | 0.0 | % |   |   | 0.0 | % |
| Pre-tax      (loss) income from continuing      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| operations                                      |   |   | (1.1 | %) |   |   | (10.5 | %) |   |   | (4.8 | %) |   |   | 4.0 | % |   |   | (25.4 | %) |
| (Loss)      income on discontinued operations,  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net      of income taxes                        |   |   | (0.2 | %) |   |   | 0.2 | % |   |   | 0.1 | % |   |   | (1.1 | %) |   |   | (13.6 | %) |
|  Net      (loss) income                    |   |   | (1.3 | %) |   |   | (10.3 | %) |   |   | (4.7 | %) |   |   | 2.8 | % |   |   | (39.0 | %) |

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| SELECTED CONSOLIDATED      FINANCIAL DATA                                                                                             |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      following is a summary of unaudited results of operations for the fiscal      years ended March 29, 2008 and March 31, 2007. |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Quarterly      Financial Information (Unaudited)                                                                                      |   | 2008 |   |
|  (In      thousands except per share data)                                                                                       |   | First |   |   | Second |   |   | Third |   |   | Fourth |   |   | Year |   |
| Net      sales                                                                                                                        |   | $ | 4,628 |   |   | $ | 4,651 |   |   | $ | 4,953 |   |   | $ | 4,009 |   |   | $ | 18,331 |   |
| Gross      profit                                                                                                                     |   |   | 1,944 |   |   |   | 2,081 |   |   |   | 2,049 |   |   |   | 1,674 |   |   |   | 7,748 |   |
| Operating      expenses                                                                                                               |   |   | 1,941 |   |   |   | 1,879 |   |   |   | 1,974 |   |   |   | 2,145 |   |   |   | 7,939 |   |
| Interest      income, net                                                                                                             |   |   | 14 |   |   |   | 9 |   |   |   | 6 |   |   |   | 7 |   |   |   | 36 |   |
| Pre-tax      income (loss) from continuing operations                                                                                 |   |   | 30 |   |   |   | 198 |   |   |   | 51 |   |   |   | (480 | ) |   |   | (201 | ) |
| Provision      for income taxes                                                                                                       |   |   | 2 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2 |   |
| Income      (loss) from continuing operations                                                                                         |   |   | 28 |   |   |   | 198 |   |   |   | 51 |   |   |   | (480 | ) |   |   | (203 | ) |
| Income      (loss) on discontinued operations,                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net      of income taxes                                                                                                              |   |   | 64 |   |   |   | (10 | ) |   |   | (20 | ) |   |   | (65 | ) |   |   | (31 | ) |
| Net      income (loss)                                                                                                                |   | $ | 92 |   |   | $ | 188 |   |   |   | 31 |   |   | $ | (545 | ) |   | $ | (234 | ) |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings (loss) per share:                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                                                                                                       |   | $ | 0.01 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.04 | ) |
| On      discontinued operations                                                                                                       |   |   | 0.01 |   |   |   | (0.00 | ) |   |   | (0.00 | ) |   |   | (0.01 | ) |   |   | (0.01 | ) |
| Net      earnings (loss) per share - basic                                                                                            |   | $ | 0.02 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |   | $ | (0.11 | ) |   | $ | (0.05 | ) |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings (loss) per share:                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                                                                                                       |   | $ | 0.01 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.04 | ) |
| On      discontinued operations                                                                                                       |   |   | 0.01 |   |   |   | (0.00 | ) |   |   | (0.00 | ) |   |   | (0.01 | ) |   |   | (0.01 | ) |
| Net      earnings (loss) per share - diluted                                                                                          |   | $ | 0.02 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |   | $ | (0.11 | ) |   | $ | (0.05 | ) |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      of common stock - basic                                                                                                   |   |   | 4,809 |   |   |   | 4,810 |   |   |   | 4,814 |   |   |   | 4,818 |   |   |   | 4,813 |   |
| Shares      of common stock - diluted                                                                                                 |   |   | 4,863 |   |   |   | 4,880 |   |   |   | 4,913 |   |   |   | 4,818 |   |   |   | 4,813 |   |

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| Quarterly      Financial Information (Unaudited)      |   | 2007   |   |
|-------------------------------------------------------|--------|--------|--------|
|  (In      thousands except per share data)       |   | First  |   |   | Second |   |   | Third |   |   | Fourth |   |   | Year |   |
| Net      sales                                        |   | $      | 3,386  |   |   | $ | 3,934 |   |   | $ | 5,564 |   |   | $ | 5,146 |   |   | $ | 18,048 |   |
| Gross      profit                                     |   |   | 1,199  |   |   |   | 1,857 |   |   |   | 2,394 |   |   |   | 2,096 |   |   |   | 7,546 |   |
| Operating      expenses                               |   |   | 2,258  |   |   |   | 2,306 |   |   |   | 2,378 |   |   |   | 2,606 |   |   |   | 9,548 |   |
| Interest      income, net                             |   |   | 29     |   |   |   | 37 |   |   |   | 25 |   |   |   | 17 |   |   |   | 108 |   |
| Pre-tax      (loss) income from continuing operations |   |   | (1,030 | ) |   |   | (412 | ) |   |   | 41 |   |   |   | (493 | ) |   |   | (1,894 | ) |
| Provision      for income taxes                       |   |   | -      |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| (Loss)      income from continuing operations         |   |   | (1,030 | ) |   |   | (413 | ) |   |   | 41 |   |   |   | (493 | ) |   |   | (1,895 | ) |
| Income      (loss) on discontinued operations,        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net      of income taxes                              |   |   | 3      |   |   |   | 10 |   |   |   | 17 |   |   |   | (2 | ) |   |   | 28 |   |
| Net      (loss) income                                |   | $      | (1,027 | ) |   | $ | (403 | ) |   | $ | 58 |   |   | $ | (495 | ) |   | $ | (1,867 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      (loss) earnings per share:                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                       |   | $      | (0.21  | ) |   | $ | (0.08 | ) |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.40 | ) |
| On      discontinued operations                       |   |   | 0.00   |   |   |   | 0.00 |   |   |   | 0.00 |   |   |   | (0.00 | ) |   |   | 0.01 |   |
| Net      (loss) earnings per share - basic            |   | $      | (0.21  | ) |   | $ | (0.08 | ) |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.39 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      (loss) earnings per share:               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| From      continuing operations                       |   | $      | (0.21  | ) |   | $ | (0.08 | ) |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.40 | ) |
| On      discontinued operations                       |   |   | 0.00   |   |   |   | 0.00 |   |   |   | 0.00 |   |   |   | (0.00 | ) |   |   | 0.01 |   |
| Net      (loss) earnings per share - diluted          |   | $      | (0.21  | ) |   | $ | (0.08 | ) |   | $ | 0.01 |   |   | $ | (0.10 | ) |   | $ | (0.39 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      of common stock - basic                   |   |   | 4,809  |   |   |   | 4,809 |   |   |   | 4,809 |   |   |   | 4,809 |   |   |   | 4,809 |   |
| Shares      of common stock - diluted                 |   |   | 4,809  |   |   |   | 4,809 |   |   |   | 4,884 |   |   |   | 4,809 |   |   |   | 4,809 |   |

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ITEM

| New      Orders             |   |
|-----------------------------|--------|
| (Dollars      in thousands) |   | 2008 |   |   | %      change |   |   | 2007 |   |   | %      change |   |   | 2006 |   |
| Instrument      Division    |   | $ | 8,434 |   |   |   | (3 | %) |   | $ | 8,677 |   |   |   | (3 | %) |   | $ | 8,943 |   |
| ASCOR                       |   |   | 5,361 |   |   |   | 22 | % |   |   | 4,390 |   |   |   | 30 | % |   |   | 3,389 |   |
| Microsource                 |   |   | 3,625 |   |   |   | 17 | % |   |   | 3,091 |   |   |   | 9 | % |   |   | 2,825 |   |
| Total                       |   | $ | 17,420 |   |   |   | 8 | % |   | $ | 16,158 |   |   |   | 7 | % |   | $ | 15,157 |   |

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| (Dollars      in thousands)              |   | 2008   |   |   | %      change |   |   | 2007   |   |   | %      change |   |   | 2006   |   |
|------------------------------------------|--------|--------|--------|--------|---------------|--------|--------|--------|--------|--------|---------------|--------|--------|--------|--------|
| Backlog      of unfilled orders          |   | $      | 7,528  |   |          |   | (11    | %)     |   | $      | 8,439         |   |   |   | (18    | %) |   | $ | 10,329 |   |
| Backlog      of unfilled orders          |   |   |   |   |          |   |   |   |   |   |          |   |   |   |   |   |   |   |   |   |
| shippable      within one year           |   |   | 4,604  |   |          |   | (13    | %)     |   |   | 5,294         |   |   |   | (10    | %) |   |   | 5,863 |   |
| Previous      fiscal year end (FYE)      |   |   |   |   |          |   |   |   |   |   |          |   |   |   |   |   |   |   |   |   |
| one-year      backlog reclassified       |   |   |   |   |          |   |   |   |   |   |          |   |   |   |   |   |   |   |   |   |
| during      year as shippable later than |   |   |   |   |          |   |   |   |   |   |          |   |   |   |   |   |   |   |   |   |
| one      year                            |   |   | 425    |   |          |   | 40     | %      |   |   | 303           |   |   |   | (88    | %) |   |   | 2,439 |   |
| Net      cancellations during year of    |   |   |   |   |          |   |   |   |   |   |          |   |   |   |   |   |   |   |   |   |
| previous      FYE one-year backlog       |   |   | -      |   |          |   | -      |   |   |   | 904           |   |   |   | -      |   |   |   | - |   |

| Allocation      of Net Sales |   |
|------------------------------|--------|
| (Dollars      in thousands)  |   | 2008 |   |   | %      change |   |   | 2007 |   |   | %      change |   |   | 2006 |   |
| Commercial                   |   | $ | 7,020 |   |   |   | - |   |   | $ | 7,054 |   |   |   | (40 | %) |   | $ | 11,657 |   |
| Government      / Defense    |   |   | 11,311 |   |   |   | 3 | % |   |   | 10,994 |   |   |   | 23 | % |   |   | 8,963 |   |

| Allocation      of Net Sales by Segment |   |
|-----------------------------------------|--------|
| (Dollars      in thousands)             |   | 2008 |   |   | %      change |   |   | 2007 |   |   | %      change |   |   | 2006 |   |
| Instrument      Division                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                              |   | $ | 4,972 |   |   |   | 2 | % |   | $ | 4,870 |   |   |   | (33 | %) |   | $ | 7,319 |   |
| Government      / Defense               |   |   | 3,554 |   |   |   | (13 | %) |   |   | 4,096 |   |   |   | 77 | % |   |   | 2,309 |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASCOR                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                              |   | $ | 310 |   |   |   | (36 | %) |   | $ | 485 |   |   |   | (26 | %) |   | $ | 659 |   |
| Government      / Defense               |   |   | 5,710 |   |   |   | 85 | % |   |   | 3,087 |   |   |   | (21 | %) |   |   | 3,900 |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Microsource                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                              |   | $ | 1,738 |   |   |   | 2 | % |   | $ | 1,699 |   |   |   | (54 | %) |   | $ | 3,679 |   |
| Government      / Defense               |   |   | 2,047 |   |   |   | (46 | %) |   |   | 3,811 |   |   |   | 38 | % |   |   | 2,754 |   |

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| Cost      of Sales          |   |
|-----------------------------|--------|
| (Dollars      in thousands) |   | 2008 |   |   | %      change |   |   | 2007 |   |   | %      change |   |   | 2006 |   |
| Cost      of sales          |   | $ | 10,583 |   |   |   | 1 | % |   | $ | 10,502 |   |   |   | (15 | %) |   | $ | 12,320 |   |

| Operating      Expenses                  |   |
|------------------------------------------|--------|
| (Dollars      in thousands)              |   | 2008 |   |   | %      change |   |   | 2007 |   |   | %      change |   |   | 2006 |   |
| Engineering                              |   | $ | 2,248 |   |   |   | (40 | %) |   | $ | 3,731 |   |   |   | (1 | %) |   | $ | 3,760 |   |
| Selling,      general and administrative |   |   | 5,538 |   |   |   | 2 | % |   |   | 5,456 |   |   |   | (2 | %) |   |   | 5,556 |   |
| Restructuring                            |   |   | 153 |   |   |   | (58 | %) |   |   | 361 |   |   |   | - |   |   |   | - |   |
| Total                                    |   | $ | 7,939 |   |   |   | (17 | %) |   | $ | 9,548 |   |   |   | 3 | % |   | $ | 9,316 |   |

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| Net      Inventories         |   |
|------------------------------|--------|
| (Dollars      in thousands)  |   | 2008 |   |   | %      change |   |   | 2007 |   |
| Raw      materials           |   | $ | 2,767 |   |   |   | (13 | %) |   | $ | 3,163 |   |
| Work-in-progress             |   |   | 1,501 |   |   |   | (29 | %) |   |   | 2,128 |   |
| Finished      goods          |   |   | 369 |   |   |   | 77 | % |   |   | 209 |   |
| Demonstration      inventory |   |   | 371 |   |   |   | 9 | % |   |   | 341 |   |
| Total                        |   | $ | 5,008 |   |   |   | (14 | %) |   | $ | 5,841 |   |

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| (Dollars      in thousands) |   | Under      one year |   |   | One      to three years |   |   | Three      to five years |   |   | More      than five years |   |
|-----------------------------|--------|---------------------|--------|--------|-------------------------|--------|--------|--------------------------|--------|--------|---------------------------|--------|
| Operating      leases       |   | $                   | 971    |   |                    | $      | 1,942  |                     |   | $      | 1,155                     |   |   | $ | 57 |   |
| Purchase      obligations   |   |                | 500    |   |                    |   | -      |                     |   |   | -                         |   |   |   | - |   |
| Total                       |   | $                   | 1,471  |   |                    | $      | 1,942  |                     |   | $      | 1,155                     |   |   | $ | 57 |   |

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ITEM

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ITEM

| INDEX      TO FINANCIAL STATEMENTS AND SCHEDULES             |
|--------------------------------------------------------------|
|                                                         |   |   |
| Financial      Statements                                    |   | Page      No. |
|                                                         |   |   |
| Consolidated      Balance Sheets -                           | 23 |
|                                                         | As      of March 29, 2008 and March 31, 2007 |   |
|                                                         |   |   |
| Consolidated      Statements of Operations -                 | 24 |
|                                                         | Years      ended March 29, 2008 and March 31, 2007 |   |
|                                                         |   |   |
| Consolidated      Statements of Shareholders’ Equity - | 25 |
|                                                         | Years      ended March 29, 2008 and March 31, 2007 |   |
|                                                         |   |   |
| Consolidated      Statements of Cash Flows -                 | 26 |
|                                                         | Years      ended March 29, 2008 and March 31, 2007 |   |
|                                                         |   |   |
| Notes      to Consolidated Financial Statements              | 27      - 36 |
|                                                         |   |   |
| Report      of Independent Registered Public Accounting Firm | 37 |

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| CONSOLIDATED BALANCE      SHEETS                                      |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |
|  (In      thousands except share data)                           |   | March      29, 2008 |   |   | March      31, 2007 |   |
| Assets                                                                |   |   |   |   |   |   |
| Current      assets                                                   |   |   |   |   |   |   |
| Cash      and cash-equivalents                                        |   | $ | 1,845 |   |   | $ | 1,804 |   |
| Trade      accounts receivable, net of allowance                      |   |   |   |   |   |   |   |   |
| of      $93 and $62, respectively                                     |   |   | 2,693 |   |   |   | 2,750 |   |
| Inventories,      net                                                 |   |   | 5,008 |   |   |   | 5,841 |   |
| Prepaid      expenses and other current assets                        |   |   | 383 |   |   |   | 360 |   |
| Total      current assets                                             |   |   | 9,929 |   |   |   | 10,755 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Property      and equipment                                           |   |   |   |   |   |   |   |   |
| Leasehold      improvements                                           |   |   | 373 |   |   |   | 373 |   |
| Machinery      and equipment                                          |   |   | 15,468 |   |   |   | 15,426 |   |
| Office      furniture and fixtures                                    |   |   | 723 |   |   |   | 736 |   |
| Total      property and equipment                                     |   |   | 16,564 |   |   |   | 16,535 |   |
| Less      accumulated depreciation and amortization                   |   |   | 16,164 |   |   |   | 16,211 |   |
| Property      and equipment, net                                      |   |   | 400 |   |   |   | 324 |   |
| Other      assets                                                     |   |   | 32 |   |   |   | 82 |   |
| Total      assets                                                     |   | $ | 10,361 |   |   | $ | 11,161 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Liabilities      and shareholders' equity                             |   |   |   |   |   |   |   |   |
| Current      liabilities                                              |   |   |   |   |   |   |   |   |
| Accounts      payable                                                 |   | $ | 649 |   |   | $ | 1,106 |   |
| Accrued      commission                                               |   |   | 181 |   |   |   | 192 |   |
| Accrued      payroll and benefits                                     |   |   | 526 |   |   |   | 666 |   |
| Accrued      warranty                                                 |   |   | 190 |   |   |   | 207 |   |
| Customer      advances                                                |   |   | 646 |   |   |   | 681 |   |
| Other      current liabilities                                        |   |   | 606 |   |   |   | 623 |   |
| Total      current liabilities                                        |   |   | 2,798 |   |   |   | 3,475 |   |
| Deferred      rent                                                    |   |   | 171 |   |   |   | 293 |   |
| Total      liabilities                                                |   |   | 2,969 |   |   |   | 3,768 |   |
| Commitments                                                           |   |   |   |   |   |   |   |   |
| Shareholders'      equity                                             |   |   |   |   |   |   |   |   |
| Preferred      stock of no par value;                                 |   |   |   |   |   |   |   |   |
| Authorized      1,000,000 shares; no shares outstanding               |   |   |   |   |   |   |   |   |
| at      March 29, 2008 and March 31, 2007                             |   |   | - |   |   |   | - |   |
| Common      stock of no par value;                                    |   |   |   |   |   |   |   |   |
| Authorized      40,000,000 shares; 4,824,021 shares at March 29, 2008 |   |   |   |   |   |   |   |   |
| and      4,809,021 shares at March 31, 2007 issued and outstanding    |   |   | 13,398 |   |   |   | 13,165 |   |
| Accumulated      deficit                                              |   |   | (6,006 | ) |   |   | (5,772 | ) |
| Total      shareholders' equity                                       |   |   | 7,392 |   |   |   | 7,393 |   |
| Total      liabilities and shareholders' equity                       |   | $ | 10,361 |   |   | $ | 11,161 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| See      Accompanying Notes to Consolidated Financial Statements      |   |

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| CONSOLIDATED      STATEMENTS OF OPERATIONS                       |                    |
|------------------------------------------------------------------|-------------------------|
|                                                             |                    |   |   |   |   |   |
|                                                             | Fiscal      Years Ended |   |
|  (In      thousands except per-share data)                  |                    | March      29, 2008 |   |   | March      31, 2007 |   |
| Net      sales                                                   |                    | $ | 18,331 |   |   | $ | 18,048 |   |
| Cost      of sales                                               |                    |   | 10,583 |   |   |   | 10,502 |   |
| Gross      profit                                                |                    |   | 7,748 |   |   |   | 7,546 |   |
|                                                             |                    |   |   |   |   |   |   |   |
| Engineering                                                      |                    |   | 2,248 |   |   |   | 3,731 |   |
| Selling,      general and administrative                         |                    |   | 5,538 |   |   |   | 5,456 |   |
| Restructuring                                                    |                    |   | 153 |   |   |   | 361 |   |
| Total      operating expenses                                    |                    |   | 7,939 |   |   |   | 9,548 |   |
|                                                             |                    |   |   |   |   |   |   |   |
| Operating      loss from continuing operations                   |                    |   | (191 | ) |   |   | (2,002 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Other      expense                                               |                    |   | 46 |   |   |   | - |   |
| Interest      income, net                                        |                    |   | 36 |   |   |   | 108 |   |
| Loss      from continuing operations before income taxes         |                    |   | (201 | ) |   |   | (1,894 | ) |
| Provision      for income taxes                                  |                    |   | 2 |   |   |   | 1 |   |
| Loss      from continuing operations                             |                    |   | (203 | ) |   |   | (1,895 | ) |
| (Loss)      income on discontinued operations, net of income     |                    |   |   |   |   |   |   |   |
| taxes      of nil for 2008 and 2007                              |                    |   | (31 | ) |   |   | 28 |   |
| Net      loss                                                    |                    | $ | (234 | ) |   | $ | (1,867 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Basic      and diluted net (loss) earnings per share:            |                    |   |   |   |   |   |   |   |
| From      continuing operations                                  |                    | $ | (0.04 | ) |   | $ | (0.40 | ) |
| On      discontinued operations                                  |                    |   | (0.01 | ) |   |   | 0.01 |   |
| Basic      and diluted net loss per share                        |                    | $ | (0.05 | ) |   | $ | (0.39 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Shares      used in per share calculation:                       |                    |   |   |   |   |   |   |   |
| Basic                                                            |                    |   | 4,813 |   |   |   | 4,809 |   |
| Diluted                                                          |                    |   | 4,813 |   |   |   | 4,809 |   |
|                                                             |                    |   |   |   |   |   |   |   |
| See      Accompanying Notes to Consolidated Financial Statements |                    |

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| CONSOLIDATED      STATEMENTS OF SHAREHOLDERS' EQUITY             |   |
|------------------------------------------------------------------|--------|
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   |   |   | Accumulated |   |   |   |   |
|  (In      thousands except share data)                      |   | Shares |   |   | Amount |   |   | Deficit |   |   | Total |   |
| Balance      at March 25, 2006                                   |   |   | 4,809,021 |   |   | $ | 13,003 |   |   | $ | (3,905 | ) |   | $ | 9,098 |   |
| Comprehensive      loss - net                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                    |   |   | - |   |   |   | - |   |   |   | (1,867 | ) |   |   | (1,867 | ) |
| Share      based compensation                                    |   |   | - |   |   |   | 162 |   |   |   | - |   |   |   | 162 |   |
| Balance      at March 31, 2007                                   |   |   | 4,809,021 |   |   |   | 13,165 |   |   |   | (5,772 | ) |   |   | 7,393 |   |
| Comprehensive      loss - net                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                    |   |   |   |   |   |   |   |   |   |   | (234 | ) |   |   | (234 | ) |
| Share      based compensation                                    |   |   | - |   |   |   | 211 |   |   |   | - |   |   |   | 211 |   |
| Stock      issuance under stock options plans                    |   |   | 15,000 |   |   |   | 22 |   |   |   | - |   |   |   | 22 |   |
| Balance      at March 29, 2008                                   |   |   | 4,824,021 |   |   | $ | 13,398 |   |   | $ | (6,006 | ) |   | $ | 7,392 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See      Accompanying Notes to Consolidated Financial Statements |   |

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| CONSOLIDATED      STATEMENTS OF CASH FLOWS                       |                    |
|------------------------------------------------------------------|-------------------------|
|                                                             |                    |   |   |   |   |
|                                                             | Fiscal      Years Ended |   |
|  (In      thousands)                                        |                    | March      29, 2008 |   |   | March      31, 2007 |   |
| Cash      flows from operations:                                 |                    |   |   |   |   |   |
| Net      loss                                                    |                    | $ | (234 | ) |   | $ | (1,867 | ) |
| Adjustments      to reconcile net loss to net cash               |                    |   |   |   |   |   |   |   |
| provided      by (used in) operations:                           |                    |   |   |   |   |   |   |   |
| Net      provision for doubtful accounts and notes receivable    |                    |   | 31 |   |   |   | (1 | ) |
| Depreciation      and amortization                               |                    |   | 128 |   |   |   | 215 |   |
| Gain      on sale of fixed asset                                 |                    |   | (3 | ) |   |   | - |   |
| Share      based compensation                                    |                    |   | 211 |   |   |   | 162 |   |
| Deferred      rent                                               |                    |   | (122 | ) |   |   | 71 |   |
| Changes      in operating assets and liabilities:                |                    |   |   |   |   |   |   |   |
| Notes      receivable                                            |                    |   | - |   |   |   | 3 |   |
| Trade      accounts receivable                                   |                    |   | 26 |   |   |   | 686 |   |
| Inventories                                                      |                    |   | 833 |   |   |   | (1,028 | ) |
| Prepaid      expenses and other assets                           |                    |   | 27 |   |   |   | (96 | ) |
| Accounts      payable                                            |                    |   | (457 | ) |   |   | 236 |   |
| Accrued      commissions                                         |                    |   | (11 | ) |   |   | 21 |   |
| Accrued      payroll and benefits                                |                    |   | (140 | ) |   |   | (115 | ) |
| Accrued      warranty                                            |                    |   | (17 | ) |   |   | (43 | ) |
| Customer      advances                                           |                    |   | (35 | ) |   |   | 160 |   |
| Other      current liabilities                                   |                    |   | (17 | ) |   |   | 190 |   |
| Net      cash provided by (used in) operations                   |                    |   | 220 |   |   |   | (1,406 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                       |                    |   |   |   |   |   |   |   |
| Proceeds      from sales of equipment                            |                    |   | 5 |   |   |   | 2 |   |
| Purchases      of property and equipment                         |                    |   | (206 | ) |   |   | (204 | ) |
| Net      cash used in investing activities                       |                    |   | (201 | ) |   |   | (202 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                       |                    |   |   |   |   |   |   |   |
| Issuance      of common stock                                    |                    |   | 22 |   |   |   | - |   |
|                                                             |                    |   |   |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents            |                    |   | 41 |   |   |   | (1,608 | ) |
|                                                             |                    |   |   |   |   |   |   |   |
| Beginning      cash and cash equivalents                         |                    |   | 1,804 |   |   |   | 3,412 |   |
| Ending      cash and cash equivalents                            |                    | $ | 1,845 |   |   | $ | 1,804 |   |
|                                                             |                    |   |   |   |   |   |   |   |
| Supplementary      disclosure of cash flow information:          |                    |   |   |   |   |   |   |   |
| Cash      paid for income taxes                                  |                    | $ | 2 |   |   | $ | 1 |   |
| Cash      paid for interest                                      |                    |   | - |   |   |   | - |   |
|                                                             |                    |   |   |   |   |   |   |   |
| See      Accompanying Notes to Consolidated Financial Statements |                    |

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| (Dollars      in thousands)          |   | March      29, 2008 |   |   | March      31, 2007 |   |
|--------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Beginning      balance               |   | $                   | 62     |   |                | $      | 63 |   |
| Provision      for doubtful accounts |   |                | 31     |   |                |   | 5 |   |
| Recoveries      of doubtful accounts |   |                | -      |   |                |   | - |   |
| Write-off      of doubtful accounts  |   |                | -      |   |                |   | 6 | ) |
| Ending      balance                  |   | $                   | 93     |   |                | $      | 62 |   |

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| Years      Ended             |   | March      29, 2008 |   |   | March      31, 2007 |   |
|------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Dividend      yield          |   | Zero                |   |   | Zero                |   |
| Expected      volatility     |   | 80%      to 112%    |   |   | 51%      to 88%     |   |
| Risk-free      interest rate |   | 2.21%      to 3.59% |   |   | 4.50%      to 4.97% |   |
| Expected      term (years)   |   |                | 3.75   |   |                |   | 3.75 |   |

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| (Dollars      in thousands)  |   | March      29, 2008 |   |   | March      31, 2007 |   |
|------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Raw      materials           |   | $                   | 2,767  |   |                | $      | 3,163 |   |
| Work-in-progress             |   |                | 1,501  |   |                |   | 2,128 |   |
| Finished      goods          |   |                | 369    |   |                |   | 209 |   |
| Demonstration      inventory |   |                | 371    |   |                |   | 341 |   |
| Total                        |   | $                   | 5,008  |   |                | $      | 5,841 |   |

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|                                                  |   | Instrument |   |   |   |   |   |        |   |   |      |   |   |   |   |
|-------------------------------------------------------|--------|------------|--------|--------|--------|--------|--------|-------------|--------|--------|-----------|--------|--------|--------|--------|
| March      29, 2008  (Dollars in thousands) |   | Division   |   |   | ASCOR  |   |   | Microsource |   |   | Corporate |   |   | Total  |   |
| Revenue                                               |   | $          | 8,526  |   |   | $      | 6,020  |        |   | $      | 3,785     |   |   | $      | -      |   |   | $ | 18,331 |   |
| Interest      income, net                             |   |       | 2      |   |   |   | 7      |        |   |   | 25        |   |   |   | 2      |   |   |   | 36 |   |
| Depreciation      and amortization                    |   |       | 80     |   |   |   | 23     |        |   |   | 25        |   |   |   | -      |   |   |   | 128 |   |
| (Loss)      income from continuing operations         |   |       |   |   |   |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| before      income taxes                              |   |       | (1,773 | )      |   |   | 1,692  |        |   |   | 64        |   |   |   | (184   | ) |   |   | (201 | ) |
| Assets                                                |   |       | 4,228  |   |   |   | 2,680  |        |   |   | 3,168     |   |   |   | 285    |   |   |   | 10,361 |   |
|                                                  |   |       |   |   |   |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
|                                                  |   |       |   |   |   |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
|                                                  |   | Instrument |   |   |   |   |   |        |   |   |      |   |   |   |   |   |   |   |   |
| March      31, 2007  (Dollars in thousands) |   | Division   |   |   | ASCOR  |   |   | Microsource |   |   | Corporate |   |   | Total  |   |
| Revenue                                               |   | $          | 8,966  |   |   | $      | 3,572  |        |   | $      | 5,510     |   |   | $      | -      |   |   | $ | 18,048 |   |
| Interest      income, net                             |   |       | (343   | )      |   |   | (54    | )           |   |   | (870      | )      |   |   | 1,375  |   |   |   | 108 |   |
| Depreciation      and amortization                    |   |       | 153    |   |   |   | 30     |        |   |   | 32        |   |   |   | -      |   |   |   | 215 |   |
| (Loss)      income from continuing operations         |   |       |   |   |   |   |   |        |   |   |      |   |   |   |   |   |   |   |   |   |
| before      income taxes                              |   |       | (1,975 | )      |   |   | (734   | )           |   |   | (345      | )      |   |   | 1,160  |   |   |   | (1,894 | ) |
| Assets                                                |   |       | 4,948  |   |   |   | 1,968  |        |   |   | 3,922     |   |   |   | 323    |   |   |   | 11,161 |   |

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| (Dollars      in thousands) |   |  March      29, 2008      |   |  March      31, 2007                      |
|-----------------------------|--------|--------------------------------|--------|------------------------------------------------|
| Americas                    |   | $    1,250 |   | $       360 |
| Europe                      |   | 2,778                          |   | 2,233                                          |
| Asia                        |   | 1,087                          |   | 748                                            |
| Other                       |   | 1,868                          |   | 489                                            |
| Total                       |   | $    6,983 |   | $    3,830                 |

| (In      thousands except per share data)                 |   | March      29, 2008 |   |   | March      31, 2007 |   |
|-----------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Net      loss                                             |   | $                   | (234   | )      |                | $      | (1,867 | ) |
|                                                      |   |                |   |   |                |   |   |   |
| Weighted      average:                                    |   |                |   |   |                |   |   |   |
| Common      shares outstanding                            |   |                | 4,813  |   |                |   | 4,809 |   |
| Potential      common shares                              |   |                | -      |   |                |   | - |   |
| Common      shares assuming dilution                      |   |                | 4,813  |   |                |   | 4,809 |   |
|                                                      |   |                |   |   |                |   |   |   |
| Net      loss per share of common stock                   |   | $                   | (0.05  | )      |                | $      | (0.39 | ) |
| Net      loss per share of common stock assuming dilution |   | $                   | (0.05  | )      |                | $      | (0.39 | ) |
| Stock      options not included in computation            |   |                | 856    |   |                |   | 841 |   |

| Years      Ended (In thousands)                                             |   | March      29, 2008 |   |   | March      31, 2007 |   |
|-----------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Current                                                                     |   |                |   |   |                |   |
|    Federal                                                   |   | $                   | -      |   |                | $      | - |   |
|    State                                                     |   |                | 2      |   |                |   | 1 |   |
|  Total      current                                               |   |                | 2      |   |                |   | 1 |   |
| Deferred                                                                    |   |                |   |   |                |   |   |   |
|    Federal                                                   |   |                | -      |   |                |   | - |   |
|    State                                                     |   |                | -      |   |                |   | - |   |
| Total      deferred                                                         |   |                | -      |   |                |   | - |   |
| Charge      in lieu of taxes attributable to employer stock option    plans |   |                | -      |   |                |   |        - |   |
| Provision      for income taxes                                             |   | $                   | 2      |   |                | $      | 1 |   |

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| Year      Ended (In thousands)                                     |   | March      29, 2008 |    |   | March      31, 2007 |   |
|--------------------------------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|
| Net      operating loss carryforwards                              |   | $                   | 13,667  |   |                | $      | 13,625 |   |
| Income      tax credits                                            |   |                | 2,196   |   |                |   | 2,196 |   |
| Inventory      reserves and additional costs capitalized           |   |                | 2,333   |   |                |   | 2,486 |   |
| Fixed      assets depreciation                                     |   |                | 153     |   |                |   | 163 |   |
| Accrued      vacation                                              |   |                | 120     |   |                |   | 122 |   |
| Accrued      warranty                                              |   |                | 82      |   |                |   | 88 |   |
| Deferred      rent                                                 |   |                | 50      |   |                |   | 98 |   |
| Other      accrued liabilities                                     |   |                | 201     |   |                |   | 235 |   |
| Future      state tax effect                                       |   |                | (203    | )      |                |   | (220 | ) |
| Allowance      for doubtful accounts                               |   |                | 41      |   |                |   | 27 |   |
|       Total      deferred tax assets |   |                | 18,640  |   |                |   | 18,820 |   |
| Liability      for uncertain tax positions                         |   |                | (297    | )      |                |   | (424 | ) |
| Valuation      allowances                                          |   |                | (18,343 | )      |                |   | (18,396 | ) |
|                                                               |   | $                   | 0       |   |                | $      | 0 |   |

| Years      Ended (In thousands except percentages) |   | March      29, 2008 |   |   | March      31, 2007 |   |
|----------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Statutory      federal income tax (benefit)        |   | $                   | (79    | )      |                |   | (34.0 | )% |   | $ | (635 | ) |   |   | (34.0 | )% |
| Valuation      allowance                           |   |                | (53    | )      |                |   | (22.9 | ) |   |   | (206 | ) |   |   | (11.0 | ) |
| Expiration      of net operating losses            |   |                | 178    |   |                |   | 76.8 |   |   |   | 805 |   |   |   | 43.1 |   |
| State      income tax, net of federal benefit      |   |                | (14    | )      |                |   | (6.0 | ) |   |   | (109 | ) |   |   | (5.8 | ) |
| Non-tax      deductible expenses                   |   |                | 99     |   |                |   | 42.7 |   |   |   | 11 |   |   |   | 0.6 |   |
| Tax      credits                                   |   |                | -      |   |                |   | - |   |   |   | 95 |   |   |   | 5.1 |   |
| Liability      for uncertain tax positions         |   |                | (127   | )      |                |   | (54.9 | ) |   |   | - |   |   |   | - |   |
| Other                                              |   |                | (2     | )      |                |   | (0.7 | ) |   |   | 40 |   |   |   | 2.1 |   |
| Effective      income tax                          |   | $                   | 2      |   |                |   | 1.0 | % |   | $ | 1 |   |   |   | .1 | % |

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| (In      thousands)                                       |   | Fiscal      Year 2008 |     |
|-----------------------------------------------------------|--------|-----------------------|----------|
| Balance      as of March 31, 2007                         |   | $                     | 424,000  |   |
| Additions      based on current year tax positions        |   |                  | 70,000   |   |
| Reductions      for prior year tax positions              |   |                  |     |   |
|     lapses      of applicable statute |   |                  | (197,000 | ) |
| Balance      as of March 29, 2008                         |   | $                     | 297,000  |   |

|                               |                                                                                                                |   | Weighted            |   | Weighted      Average      | Average   |
|------------------------------------|---------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|----------------------------|-----------|
|                               |                                                                                                                |   | Average             |   | Remaining      Contractual | Intrinsic |
|                               |           Shares                                                  |   | Exercise      Price |   | Terms      (Years)         | Value     |
| Outstanding      at March 25, 2006 |         438,975                                                             |   | $                   | 2.57   |                       | 2.7       |  $  122,173 |
| Granted                            |         541,400                                                             |   |                | 1.85   |                       |      |   |
| Excercised                         |                    - |   |                | -      |                       |      |   |
| Forfeited      / Expired           |              (139,475)                                                                |   |                | 2.84   |                       |      |   |
| Outstanding      at March 31, 2007 |         840,900                                                             |   | $                   | 2.06   |                       | 3.6       |  $  149,624 |
| Granted                            |              157,000                                                             |   |                | 1.84   |                       |      |   |
| Excercised                         |                15,000                                                  |   |                | 1.47   |                       |      |   |
| Forfeited      / Expired           |                        (127,250)    |   |                | 1.96   |                       |      |   |
| Outstanding      at March 29, 2008 |        855,650                                                                   |   | $                   | 2.04   |                       | 3.1       |  $              - |
|                               |                                                                                                                |   |                |   |                       |      |   |
| Exercisable      at March 29, 2008 |        342,726                                                                   |   | $                   | 2.22   |                       | 2.0       |  $              - |

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|                               |   | Options     |    |   | Options     |   |     | Weighted      Average |   |
|------------------------------------|--------|-------------|---------|--------|-------------|--------|----------|-----------------------|--------|
|                               |   | Exercisable |    |   | Outstanding |   |     | Fair      Value       |   |
| Outstanding      at March 25, 2006 |   |        | 203,475 |   |        |   | 438,975  |                  |   | $ | 2.57 |   |
| Excercised                         |   |        |    |   |        |   | -        |                  |   |   | - |   |
| Forfeited                          |   |        |    |   |        |   | (139,475 | )                     |   |   | 2.84 |   |
| Granted                            |   |        |    |   |        |   | 541,400  |                  |   |   | 1.85 |   |
| Outstanding      at March 31, 2007 |   |        | 214,750 |   |        |   | 840,900  |                  |   | $ | 2.06 |   |
| Excercised                         |   |        |    |   |        |   | (15,000  | )                     |   |   | 1.47 |   |
| Forfeited                          |   |        |    |   |        |   | (127,250 | )                     |   |   | 1.96 |   |
| Granted                            |   |        |    |   |        |   | 157,000  |                  |   |   | 1.84 |   |
| Outstanding      at March 29, 2008 |   |        | 342,726 |   |        |   | 855,650  |                  |   | $ | 2.04 |   |

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| Fiscal      Year (Dollars in thousands) |   |   |   |
|-----------------------------------------|--------|--------|--------|
| 2009                                    |   | $      | 971    |   |
| 2010                                    |   |   | 971    |   |
| 2011                                    |   |   | 971    |   |
| 2012                                    |   |   | 814    |   |
| 2013                                    |   |   | 341    |   |
| Thereafter                              |   |   | 57     |   |
|                                    |   | $      | 4,125  |   |

| (Dollars      in thousands)         |   | March      29, 2008 |   |   | March      31, 2007 |   |
|-------------------------------------|--------|---------------------|--------|--------|---------------------|--------|
| Balance      at beginning of period |   | $                   | 207    |   |                | $      | 250 |   |
| Provision,      net                 |   |                | 160    |   |                |   | 130 |   |
| Warranty      costs incurred        |   |                | (177   | )      |                |   | (173 | ) |
| Balance      at end of period       |   | $                   | 190    |   |                | $      | 207 |   |

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| Name                       | Age    | Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|----------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| John      R. Regazzi  | 53     | Chief      Executive Officer and a Director of the Company since April      2006.  Mr. Regazzi had been President and General Manager of      Instrument Division since September 2005, and prior to that, was Vice      President of Operations for Instrument Division from October 2004 through      September 2005.  Prior to that, he was Vice President of      Engineering for Instrument Division from June 2001 through October 2004.      Previous experience includes 22 years at Hewlett Packard and Agilent      Technologies in various design and management positions associated with      their microwave sweeper and synthesizer product lines. His final position      at Agilent Technologies was as a senior engineering manager.                                                                                                                                                                                                                                                                                                                                                                                        |
| Patrick      J. Lawlor     | 57     | Vice      President, Finance, Chief Financial Officer and Secretary of Giga-tronics,      Inc. since February 2007.  Mr. Lawlor was previously a      Consultant to PDL BioPharma, Inc, and before that was the Vice President,      Chief Financial Officer at SaRonix, LLC, a $90 million private company      with international facilities.  Prior to that he was the Chief      Financial Officer with Aerojet Fine Chemicals, LLC, a $65 million      subsidiary of GenCorp, and Vice President of Finance with Systems      Chemistry, Inc.  Mr. Lawlor spent 23 years with Westinghouse      Electric Corporation, where he rose through numerous positions among      various divisions, with his final position as Vice President of Finance      and Controller.                                                                                                                                                                                                                                                                                                                                                         |
| Jeffrey      T. Lum        | 62     | President      and a Director of the Board of ASCOR (now a division of the Company) since      November 1987.  Mr. Lum founded ASCOR in 1987 and has been      President since inception.  He was a founder and Vice President      of Autek Systems Corporation, a manufacturer of precision waveform      analyzers.  Mr. Lum serves as Treasurer and a member of the      Board of Directors for the Santa Clara Aquamaids, a non-profit      organization dedicated to advancing athletes in synchronized swimming to      the Olympics games.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Rodrick      G. Cross      | 51     | Vice      President, Sales & Marketing since October 2007.  Mr. Cross      has over 25 years of experience in building, leading and operating global      marketing, sales, business development, customer service and technical      application engineering organizations.  He has worked for      Agilent/Hewlett-Packard and Sony America as well as 5 startup companies      generating hundreds of millions of dollars in market share expansion and      new sales revenue.  His strategic and tactical business programs      have been involved with many technologies - RF& microwave,      electronics, internet, solar energy, software, semiconductor and optical      coatings - spanning several industries including test and measurement,      electrical power, telecommunications, aerospace and defense and internet      security.  Mr. Cross has a Bachelor of Science Degree from      Brigham Young University and Certificates of Study from      M.I.T.  Mr. Cross has broad international business experience in      North America, Europe and Asia and speaks fluent  Japanese. |

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|   | (a)      The following consolidated financial statements of Giga-tronics      Incorporated and subsidiaries and the related independent registered      public accounting firm are filedherewith: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| INDEX      TO FINANCIAL STATEMENTS AND SCHEDULES                                                               |
|----------------------------------------------------------------------------------------------------------------|
|                                                                                                           |  |   |
| Consolidated Financial      Statements:                                                                        |             Page |   |
|                                                                                                           |   |   |
| Consolidated      Balance Sheets as of March 29, 2008 and March 31, 2007                                       | 23 |   |
|                                                                                                           |   |   |
| Consolidated      Statements of Operations for the years ended March 29, 2008 and March 31,      2007          | 24 |   |
|                                                                                                           |   |   |
| Consolidated      Statements of Stockholders Equity for the years ended March 29, 2008 and      March 31, 2007 | 25 |   |
|                                                                                                           |   |   |
| Consolidated      Statements of Cash Flows for the years ended March 29, 2008 and March 31,      2007          | 26 |   |
|                                                                                                           |   |   |
| Notes      to Consolidated Financial Statements                                                                | 27      - 36 |   |
|                                                                                                           |   |   |
| Report      of Independent Registered Public Accounting Firm                                                   | 37 |   |
|                                                                                                           |   |   |

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| INDEX      TO EXHIBITS |
|------------------------|
|                   |   |   |
|   3.1        |   | Articles      of Incorporation of the Registrant, as amended, previously filed as      Exhibit 3.1 to Form 10-KSB for the fiscal year ended March 27, 1999 and      incorporated herein by reference. |
|                   |   |   |
|   3.2        |   | Amended      and Restated Bylaws of Giga-tronics Incorporated, as amended on March 7,      2008. |
|                   |   |   |
| 10.1                   |   | 1990      Restated Stock Option Plan and form of Incentive Stock Option Agreement,      previously filed on November 3, 1997 as Exhibit 99.1 to Form S-8      (33-39403) and incorporated herein by    reference.  * |
|                   |   |   |
| 10.2                   |   | Standard      form Indemnification Agreement for Directors and Officers, previously      filed on June 21, 1999, as Exhibit 10.2 to Form 10-KSB for the fiscal year      ended March 27, 1999 and incorporated herein by      reference.  * |
|                   |   |   |
| 10.3                   |   | Lease      between Giga-tronics Incorporated and Calfront Associates for 4650 Norris      Canyon Road, San Ramon, CA, dated December 6, 1993, previously filed as      Exhibit 10.12 to Form 10-KSB for the fiscal year ended March 26, 1994 and      incorporated herein by reference. |
|                   |   |   |
| 10.4                   |   | Employee      Stock Purchase Plan, previously filed on August 29, 1997, as Exhibit 99.1      to Form S-8 (33-34719), and incorporated herein by      reference.  * |
|                   |   |   |
| 10.5                   |   | 2000      Stock Option Plan and form of Incentive Stock Option Agreement, previously      filed on September 8, 2000 as Exhibit 99.1 to Form S-8 (33-45476) and      incorporated herein by reference.  * |
|                   |   |   |
| 10.6                   |   | Amendment      No. 1 to Employee Stock Purchase Plan, previously filed on September 24,      2001, as Exhibit 99.1 to Form S-8 (33-69688), and incorporated herein by      reference.  * |
|                   |   |   |
| 10.7                   |   | 2005      Equity Incentive Plan incorporated herein by reference to Attachment A of      the Registrant’s Proxy Statement filed July 21,      2005.  * |
|                   |   |   |
| 21                     |   | Significant      Subsidiaries.  (See page 57 of this Annual Report of Form      10-K.) |
|                   |   |   |
| 23.1                   |   | Consent      of Independent Registered Public accounting Firm Perry-Smith      LLP.  (See page 58 of this Annual Report of Form      10-K.) |
|                   |   |   |
| 31.1                   |   | Certification      of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley      Act.  (See page 59 of this Annual Report of Form      10-K.) |
|                   |   |   |
| 31.2                   |   | Certification      of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley      Act.  (See page 60 of this Annual Report of Form      10-K.) |
|                   |   |   |
| 32.1                   |   | Certification      of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley      Act.  (See page 61 of this Annual Report of Form      10-K.) |
|                   |   |   |
| 32.2                   |   | Certification      of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley      Act.  (See page 62 of this Annual Report of Form      10-K.) |
|                   |   |   |
|                   |   |   |
|                   | * | Management      contract or compensatory plan orarrangement. |

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SIGNATURES

|   | GIGA-TRONICS      INCORPORATED |
|--------|--------------------------------|
|   |                           |
|   | /s/      JOHN R. REGAZZI       |
|   | Chief      Executive Officer   |

| /s/      GARRETT A. GARRETTSON |   | Chairman      of the Board                   |   |                                            6/11/2008 |
|--------------------------------|--------|----------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Garrett      A. Garrettson     |   | of      Directors                            |   | Date                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      JOHN R. REGAZZI       |   | Chief      Executive Officer                 |   |        6/11/2008                                                                                                                                                                                                                         |
| John      R. Regazzi           |   | (Principal      Executive Officer)           |   | Date                                                                                                                                                                                                                                          |
|                           |   | and      Director                            |   |                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      PATRICK J. LAWLOR     |   | Vice      President, Finance/                |   |        6/11/2008                                                                                                                                                                                                                         |
| Patrick      J. Lawlor         |   | Chief      Financial Officer & Secretary |   | Date                                                                                                                                                                                                                                          |
|                           |   | (Principal      Financial Officer)           |   |                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      GEORGE H. BRUNS, JR.  |   | Director                                     |   |        6/11/2008                                                                                                                                                                                                                         |
| George      H. Bruns, Jr.      |   |                                         |   | Date                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      JAMES A. COLE         |   | Director                                     |   |        6/11/2008                                                                                                                                                                                                                         |
| James      A. Cole             |   |                                         |   | Date                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      KENNETH A. HARVEY     |   | Director                                     |   |        6/11/2008                                                                                                                                                                                                                         |
| Kenneth      A. Harvey         |   |                                         |   | Date                                                                                                                                                                                                                                          |
|                           |   |                                         |   |                                                                                                                                                                                                                                          |
| /s/      ROBERT C. WILSON      |   | Director                                     |   |        6/11/2008                                                                                                                                                                                                                         |
| Robert      C. Wilson          |   |                                         |   | Date                                                                                                                                                                                                                                          |

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