-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 A1yGelGQZ9CjIzV/WLBvvk6d9csJHOctaKR2wpLY97rqmjtPa7g3GpmmDHnN+ang
 Sa3YJLQj6EdNwUOQE4iIqw==

<SEC-DOCUMENT>0000061004-09-000021.txt : 20090522
<SEC-HEADER>0000061004-09-000021.hdr.sgml : 20090522
<ACCEPTANCE-DATETIME>20090520163405
ACCESSION NUMBER:		0000061004-09-000021
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20090331
FILED AS OF DATE:		20090520
DATE AS OF CHANGE:		20090520

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LGL GROUP INC
		CENTRAL INDEX KEY:			0000061004
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS, NEC [3679]
		IRS NUMBER:				381799862
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00106
		FILM NUMBER:		09842953

	BUSINESS ADDRESS:	
		STREET 1:		2525 SHADER ROAD
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32804
		BUSINESS PHONE:		(407) 298-2000

	MAIL ADDRESS:	
		STREET 1:		2525 SHADER ROAD
		CITY:			ORLANDO
		STATE:			FL
		ZIP:			32804

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LYNCH CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>mar31200910qdraftv71clean.htm
<DESCRIPTION>MARCH312009-10Q
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>UNITED STATES</TITLE>
<META NAME="author" CONTENT="Lynch Corp">
<META NAME="date" CONTENT="04/16/2009">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<DIV style="width:624px"><P style="line-height:16pt; margin:0px; font-size:14pt" align=center><B>UNITED STATES</B></P>
<P style="line-height:16pt; margin:0px; font-size:14pt" align=center><B>SECURITIES &amp; EXCHANGE COMMISSION</B></P>
<P style="line-height:16pt; margin:0px; font-size:14pt" align=center><B>WASHINGTON, D.C. 20549</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:16pt; margin:0px; font-size:14pt" align=center><B>FORM 10-Q</B></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=81.133></TD><TD width=553.667></TD></TR>
<TR><TD valign=top width=81.133><P style="line-height:11.4pt; margin:0px">(Mark One)</P>
</TD><TD valign=top width=553.667><P>&nbsp;</P></TD></TR>
<TR><TD valign=top width=81.133><P style="line-height:13.25pt; margin:0px; font-family:Wingdings; font-size:12pt">x</P>
</TD><TD valign=top width=553.667><P style="line-height:11.4pt; margin:0px">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
</TD></TR>
<TR><TD valign=top width=81.133><P>&nbsp;</P></TD><TD valign=top width=553.667><P>&nbsp;</P></TD></TR>
<TR><TD valign=top width=81.133><P>&nbsp;</P></TD><TD valign=top width=553.667><P style="line-height:11.4pt; margin:0px">For the quarterly period ended <U>March 31, 2009</U></P>
</TD></TR>
<TR><TD valign=top width=634.8 colspan=2><P style="line-height:11.4pt; margin:0px" align=center>

OR

</P>
</TD></TR>
<TR><TD valign=top width=81.133><P style="line-height:13.25pt; margin:0px; font-family:Wingdings; font-size:12pt">o</P>
</TD><TD valign=top width=553.667><P style="line-height:11.4pt; margin:0px">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px">For the transition period from ____________ to ____________</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Commission File No. <U>1-106</U></P>
<P style="line-height:22pt; margin:0px; font-size:20pt" align=center><B>THE LGL GROUP, INC.</B></P>
<P style="line-height:2pt; margin-top:2.2px; margin-bottom:0px; padding-top:4px; border-top:1px solid #000000" align=justify><BR></P>
<P style="margin:0px" align=center>(Exact Name of Registrant as Specified in Its Charter)</P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=291.133></TD><TD width=336></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=291.133><P style="line-height:11.4pt; margin:0px">Delaware</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=336><P style="line-height:11.4pt; margin:0px">38-1799862</P>
</TD></TR>
<TR><TD valign=top width=291.133><P style="line-height:11.4pt; margin:0px">(State or Other Jurisdiction of</P>
</TD><TD valign=top width=336><P style="line-height:11.4pt; margin:0px">(I.R.S. Employer Identification No.) </P>
</TD></TR>
<TR><TD valign=top width=291.133><P style="line-height:11.4pt; margin:0px">Incorporation or Organization)</P>
</TD><TD valign=top width=336><P>&nbsp;</P></TD></TR>
<TR><TD valign=top width=291.133><P>&nbsp;</P></TD><TD valign=top width=336><P>&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=291.133><P style="line-height:11.4pt; margin:0px">2525 Shader Rd., Orlando, Florida</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=336><P style="line-height:11.4pt; margin:0px">32804</P>
</TD></TR>
<TR><TD valign=top width=291.133><P style="line-height:11.4pt; margin:0px">(Address of principal executive offices)</P>
</TD><TD valign=top width=336><P style="line-height:11.4pt; margin:0px">(Zip Code)</P>
</TD></TR>
<TR><TD valign=top width=627.133 colspan=2><P>&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=627.133 colspan=2><P style="line-height:11.4pt; margin:0px" align=center>(407) 298-2000</P>
</TD></TR>
<TR><TD valign=top width=627.133 colspan=2><P style="line-height:11.4pt; margin:0px" align=center>(Registrant&#146;s telephone number, including area code)</P>
</TD></TR>
<TR><TD valign=top width=291.133><P>&nbsp;</P></TD><TD valign=top width=336><P>&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=291.133><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=336><P>&nbsp;</P></TD></TR>
<TR><TD valign=top width=627.133 colspan=2><P style="line-height:11.4pt; margin:0px" align=center>(Former name, former address, and former fiscal year if changed since last report)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:24px">Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</P>
<P style="margin:0px"><BR></P>
<P style="line-height:14pt; margin-top:0px; margin-bottom:-18.667px">Yes <FONT style="font-family:Wingdings; font-size:12pt">x</FONT> &nbsp;&nbsp;</P>
<P style="line-height:normal; margin:0px; text-indent:48px">No <FONT style="font-family:Wingdings; font-size:12pt">o</FONT> </P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-right:29.733px; text-indent:23.067px">Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). &nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px" align=justify>Yes <FONT style="font-family:Wingdings">o</FONT></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px" align=justify>No &nbsp;<FONT style="font-family:Wingdings">o</FONT></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px" align=justify>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. &nbsp;See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. &nbsp;(Check one):</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:48px" align=justify>Large accelerated filer <FONT style="font-family:Wingdings">o</FONT> </P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:336px" align=justify>Accelerated filer <FONT style="font-family:Wingdings">o</FONT> </P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:48px" align=justify>Non-accelerated filer <FONT style="font-family:Wingdings">o</FONT></P>
<P style="line-height:normal; margin:0px; text-indent:336px" align=justify>Smaller reporting company <FONT style="font-family:Wingdings; font-size:12pt">x</FONT></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:48px; page-break-before:always">(Do not check if a smaller reporting company) </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:24px">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</P>
<P style="margin:0px"><BR></P>
<P style="line-height:normal; margin:0px">Yes <FONT style="font-family:Wingdings; font-size:12pt">o</FONT> &nbsp;&nbsp;No <FONT style="font-family:Wingdings; font-size:12pt">x</FONT> </P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:5.333px; text-indent:24px">Indicate the number of shares outstanding of each of the

issuer

&#146;s classes of

c

ommon

s

tock, as of the latest practicable date.</P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=189.133></TD><TD width=138></TD><TD width=207.133></TD></TR>
<TR><TD valign=top width=189.133><P style="line-height:11.4pt; margin:0px; text-indent:81.533px"><U>Class</U></P>
</TD><TD valign=top width=138><P>&nbsp;</P></TD><TD valign=top width=207.133><P style="line-height:11.4pt; margin:0px; text-indent:8.867px"><U>Outstanding at May 20, 2009 </U></P>
</TD></TR>
<TR><TD valign=bottom width=189.133><P style="line-height:11.4pt; margin:0px">Common Stock, $0.01 par value</P>
</TD><TD valign=bottom width=138><P>&nbsp;</P></TD><TD valign=bottom width=207.133><P style="line-height:11.4pt; margin:0px" align=center>2,194,348</P>
</TD></TR>
</TABLE>
<P style="margin:0px; padding-bottom:4px; border-bottom:12px double #000000"><BR>
<BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; padding-bottom:4px; page-break-before:always; border-bottom:12px double #000000"><B>INDEX</B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M24"></A><P style="margin:0px" align=center><B>THE LGL GROUP, INC.</B></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=63.133></TD><TD width=502.733></TD><TD width=43.267></TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">PART I.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">FINANCIAL INFORMATION</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 1.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Financial Statements (Unaudited)</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Condensed Consolidated Balance Sheets:</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">1</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">&#150; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 31, 2009</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">&#150; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2008</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Condensed Consolidated Statements of Operations: </P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">3</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">&#150; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three months ended March 31, 2009 and 2008</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Condensed Consolidated Statements of Stockholders&#146; Equity: </P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">4</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">&#150; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three months ended March 31, 2009</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Condensed Consolidated Statements of Cash Flows:</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">5</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">&#150; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three months ended March 31, 2009 and 2008</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Notes to Condensed Consolidated Financial Statements:</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">6</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 2.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Management&#146;s Discussion and Analysis of Financial Condition and </P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:50.867px">Results of Operations</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">13</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 3.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Quantitative and Qualitative Disclosure About Market Risk</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">17</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 4.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Controls and Procedures</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">17</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">PART II.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">OTHER INFORMATION</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 1.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Legal Proceedings</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">19</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 1A.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Risk Factors</P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">19</P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P>&nbsp;</P></TD><TD valign=bottom width=502.733><P>&nbsp;</P></TD><TD valign=bottom width=43.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=63.133><P style="margin:0px">Item 6.</P>
</TD><TD valign=bottom width=502.733><P style="margin:0px; text-indent:32.867px">Exhibits </P>
</TD><TD valign=bottom width=43.267><P style="margin:0px">20</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M25"></A><P style="margin-top:0px; margin-bottom:13.333px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always" align=center><B>PART I &nbsp;</B></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center><B>FINANCIAL INFORMATION</B></P>
<A NAME="_DV_M26"></A><P style="margin-top:0px; margin-bottom:13.333px"><B>Item 1. &nbsp;&nbsp;</B><FONT style="font-family:Times New Roman Bold"><B>Financial Statements.</B></FONT></P>
<A NAME="_DV_M27"></A><P style="margin:0px" align=center><B><U>THE LGL GROUP, INC. </U></B></P>
<A NAME="_DV_M28"></A><P style="margin-top:0px; margin-bottom:6.667px" align=center><B><U>CONDENSED CONSOLIDATED BALANCE SHEETS &#151; UNAUDITED</U></B></P>
<A NAME="_DV_M29"></A><P style="margin:0px" align=center>(In thousands, except share and per share amounts)</P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=453.133></TD><TD width=96></TD><TD width=90></TD></TR>
<TR><TD valign=bottom width=453.133><P style="margin:0px"><BR></P>
<P style="line-height:11.4pt; margin:0px">&nbsp;</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31, 2009</B></P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px" align=center><B>December 31,</B></P>
<P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008 (A)</B></P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">ASSETS</P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Current Assets:</P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Cash and cash equivalents</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,481</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,325</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Investment - marketable security</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:45.933px">16</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:43.133px">14</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Accounts receivable, less allowances of $128 and $158, respectively</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">4,133</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">6,483</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Inventories</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">5,234</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">5,121</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Prepaid expenses and other current assets</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:39.267px; border-bottom:1px solid #000000">363</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:41.467px; border-bottom:1px solid #000000">400</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:48px; padding-right:6.733px; text-indent:-6.733px">Total Current Assets</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:22.6px; border-bottom:1px solid #000000">15,227</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:25.467px; border-bottom:1px solid #000000">17,343 </P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Property, Plant and Equipment:</P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Land</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:39.267px">693</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:41.467px">693</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Buildings and improvements</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">5,048</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">5,048</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Machinery and equipment</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:24.6px; border-bottom:1px solid #000000">13,030</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:26.8px; border-bottom:1px solid #000000">12,901</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Gross Property, Plant and Equipment</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:22.6px">18,771</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:24.8px">18,642</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Less: Accumulated Depreciation</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:15.667px; border-bottom:1px solid #000000">(14,399)</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:18.867px; border-bottom:1px solid #000000">(14,129)</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Property, Plant and Equipment</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">4,372</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">4,513</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:24px; padding-right:6.733px; text-indent:-12px">Deferred Income Taxes</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:39.267px">111</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:41.467px">111</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:24px; padding-right:6.733px; text-indent:-12px">Other Assets</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:39.267px; border-bottom:1px solid #000000">380</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:41.467px; border-bottom:1px solid #000000">398</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-right:6.733px; text-indent:18px">Total Assets</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; border-bottom:3px double #000000">&nbsp;&nbsp;$ &nbsp;&nbsp;&nbsp;20,090</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;22,365</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>1</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always" align=center><B>THE LGL GROUP, INC. </B></P>
<P style="margin-top:0px; margin-bottom:6.667px" align=center><B><U>CONDENSED CONSOLIDATED BALANCE SHEETS &#151; UNAUDITED, continued</U></B></P>
<P style="margin:0px" align=center>(In thousands, except share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=453.133></TD><TD width=96></TD><TD width=90></TD></TR>
<TR><TD valign=bottom width=453.133><P style="margin:0px"><BR></P>
<P style="line-height:11.4pt; margin:0px">&nbsp;</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31, 2009</B></P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px" align=center><B>December 31,</B></P>
<P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008 (A)</B></P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">LIABILITIES AND STOCKHOLDERS&#146; EQUITY</P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Current Liabilities:</P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Note payable to bank</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,383</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px">&nbsp;&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,749 </P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Accounts payable</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">1,740</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">2,093</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Accrued compensation expense</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">1,483</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">1,323</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Other accrued expenses </P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; text-indent:29.267px">1,381</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">1,098</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Current maturities of long-term debt</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:39.267px; border-bottom:1px solid #000000">382</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:41.467px; border-bottom:1px solid #000000">397</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:42px; padding-right:6.733px; text-indent:-6.733px">Total Current Liabilities</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-right:8.867px; text-indent:38.133px">6,369</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:31.467px">7,660</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Long-term debt</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:29.267px; border-bottom:1px solid #000000">3,592</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:31.467px; border-bottom:1px solid #000000">3,660</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:42px; padding-right:6.733px; text-indent:-6.733px">Total Liabilities</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:8.867px; padding-right:8.867px; padding-bottom:4px; text-indent:29.667px; border-bottom:1px solid #000000">9,961</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:4.8px; border-bottom:1px solid #000000">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,320</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P>&nbsp;</P></TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-right:6.733px">Commitments and Contingencies</P>
</TD><TD valign=bottom width=96><P>&nbsp;</P></TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P>&nbsp;</P></TD><TD valign=bottom width=96><P>&nbsp;</P></TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-right:6.733px">Stockholders&#146; Equity:</P>
</TD><TD valign=bottom width=96><P>&nbsp;</P></TD><TD valign=bottom width=90><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:26.733px; padding-right:6.733px; text-indent:-6.733px">Common stock, $0.01 par value - 10,000,000 shares authorized; 2,194,348 and 2,188,510 shares issued at March 31, 2009 and December 31, 2008, respectively; 2,194,348 and 2,183,236 shares outstanding, respectively &nbsp;</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:48.933px">22</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:45.133px">22</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Additional paid-in capital</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:28.6px">20,647</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:24.8px">20,728</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Accumulated deficit</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:19.667px">(10,323)</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:22.533px">(9,369)</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Accumulated other comprehensive loss</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:36.333px">(217)</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:32.533px">(235)</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:25.733px; padding-right:6.733px; text-indent:-6.733px">Treasury stock, at cost, of 0 and 5,274 shares at March 31, 2009 and December 31, 2008, respectively</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:56.333px; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:32.533px; border-bottom:1px solid #000000">(101)</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:42px; padding-right:6.733px; text-indent:-6.733px">Total Stockholders&#146; Equity</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:28.6px; border-bottom:1px solid #000000">10,129</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; text-indent:14.8px; border-bottom:1px solid #000000">&nbsp;&nbsp;&nbsp;11,045</P>
</TD></TR>
<TR><TD valign=bottom width=453.133><P style="line-height:11.4pt; margin:0px; padding-left:42px; padding-right:6.733px; text-indent:-6.733px">Total Liabilities and Stockholders&#146; Equity</P>
</TD><TD valign=bottom width=96><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">&nbsp;&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;20,090</P>
</TD><TD valign=bottom width=90><P style="line-height:11.4pt; margin:0px; padding-left:2.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">&nbsp;&nbsp;$ &nbsp;&nbsp;&nbsp;22,365</P>
</TD><A NAME="_DV_M35"></A></TR>
</TABLE>
<P style="margin-top:13.333px; margin-bottom:-16px; padding-left:48px; text-indent:-24px">(A)</P>
<P style="margin:0px; padding-left:48px">The Condensed Consolidated Balance Sheet at December 31, 2008 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. <A NAME="_DV_M36"></A>&nbsp;</P>
<P style="margin:0px; padding-left:24px">&nbsp;<A NAME="_DV_M37"></A></P>
<P style="margin:0px" align=center><I>See accompanying Notes to Condensed Consolidated Financial Statements.</I></P>
<A NAME="_DV_M38"></A><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>2</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always"><BR></P>
<A NAME="_DV_M39"></A><A NAME="_DV_M40"></A><P style="margin:0px"><BR></P>
<A NAME="_DV_M41"></A><P style="margin:0px" align=center><B>THE LGL GROUP, INC. </B></P>
<A NAME="_DV_M42"></A><P style="margin-top:0px; margin-bottom:6.667px" align=center><B><U>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS &#151; UNAUDITED</U></B></P>
<A NAME="_DV_M43"></A><P style="margin:0px" align=center>(In thousands, except share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=351.133></TD><TD width=78></TD><TD width=78></TD><TD width=19.867></TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px">&nbsp;</P>
<P style="margin:0px">&nbsp;</P>
</TD><TD valign=bottom width=156 colspan=2><P style="margin:0px; padding-bottom:4px" align=center><B>Three Months </B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>Ended March 31,</B></P>
</TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px">&nbsp;</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-bottom:4px; text-indent:23.6px; border-bottom:1px solid #000000">2009</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-bottom:4px; text-indent:23.6px; border-bottom:1px solid #000000">2008</P>
</TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>REVENUES</B></P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:0.2px; border-bottom:1px solid #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,542</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:0.667px; padding-right:14.267px; padding-bottom:4px; border-bottom:1px solid #000000" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;9,783 </P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Cost and expenses:</P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:13.2px; padding-right:6.733px; text-indent:-6.733px">Manufacturing cost of sales</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; text-indent:23.533px">5,892</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; text-indent:27.667px">7,154</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:13.2px; padding-right:6.733px; text-indent:-6.733px">Engineering, selling and administrative</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:23.533px; border-bottom:1px solid #000000">2,554</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:27.667px; border-bottom:1px solid #000000">3,085</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">OPERATING LOSS</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:24.6px; border-bottom:1px solid #000000">(904)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:28.733px; border-bottom:1px solid #000000">(456)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Other income (expense):</P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:13.2px; padding-right:6.733px; text-indent:-6.733px">Interest expense, net</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; text-indent:31.267px">(89)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; text-indent:35.4px">(63)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:13.2px; padding-right:6.733px; text-indent:-6.733px">Other income (expense) </P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:46.867px; border-bottom:1px solid #000000">9</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:35.4px; border-bottom:1px solid #000000">(22)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px">&nbsp;&nbsp;&nbsp;Total Other Income (Expense)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:31.267px; border-bottom:1px solid #000000">(80)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:35.4px; border-bottom:1px solid #000000">(85)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">LOSS BEFORE INCOME TAXES</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; text-indent:24.6px">(984)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; text-indent:28.733px">(541)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Benefit (Provision) for income taxes</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:40.2px; border-bottom:1px solid #000000">30</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:35.4px; border-bottom:1px solid #000000">(49)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P>&nbsp;</P></TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-right:6.733px"><B>NET LOSS</B></P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-bottom:4px; text-indent:-2.067px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(954)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:1.667px; padding-right:7.267px; padding-bottom:4px; border-bottom:3px double #000000" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;(590)</P>
</TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Weighted average shares outstanding, basic and diluted.</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:0.4px; border-bottom:3px double #000000">2,183,236</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; text-indent:6.333px; border-bottom:3px double #000000">2,167,563</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=351.133><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD><TD valign=bottom width=19.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=351.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">BASIC AND DILUTED NET LOSS PER SHARE</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:8.867px; padding-right:5.067px; padding-bottom:4px; text-indent:3.2px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;(0.44)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.667px; padding-right:7.267px; padding-bottom:4px; border-bottom:3px double #000000" align=right>$ &nbsp;&nbsp;&nbsp;(0.27)</P>
</TD><TD valign=bottom width=19.867><P style="margin:0px"><BR></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M44"></A><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M45"></A><P style="margin:0px" align=center><I>See accompanying Notes to Condensed Consolidated Financial Statements.</I></P>
<A NAME="_DV_M46"></A><P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>3</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always" align=center><B><U>THE LGL GROUP, INC. </U></B></P>
<P style="margin-top:0px; margin-bottom:6.667px" align=center><B><U>CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY &#151; UNAUDITED</U></B></P>
<P style="margin:0px" align=center>(In thousands, except share amounts)</P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=185></TD><TD width=80.533></TD><TD width=66.267></TD><TD width=72.4></TD><TD width=83.533></TD><TD width=96></TD><TD width=67.4></TD><TD width=63.4></TD><TD width=0.867></TD></TR>
<TR><TD valign=bottom width=185><P>&nbsp;</P></TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Shares of <BR>
Common Stock<BR>
Outstanding</B></P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Common<BR>
Stock</B></P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Additional<BR>
Paid-In<BR>
Capital</B></P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Accumulated Deficit</B></P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Accumulated Other Comprehensive Loss</B></P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Treasury Stock</B></P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000" align=center><B>Total</B></P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; font-size:9pt" align=justify>Balance at January 1, 2009</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; text-indent:9.467px; font-size:9pt">2,183,236</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; font-size:9pt">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22</P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; font-size:9pt">$ &nbsp;&nbsp;&nbsp;&nbsp;20,728</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; font-size:9pt">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9,369)</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; font-size:9pt">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(235)</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; font-size:9pt">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(101)</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:1px solid #000000">$ &nbsp;&nbsp;11,045</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; font-size:9pt" align=justify>Comprehensive loss:</P>
</TD><TD valign=bottom width=80.533><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=66.267><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=83.533><P>&nbsp;</P></TD><TD valign=bottom width=96><P>&nbsp;</P></TD><TD valign=bottom width=67.4><P>&nbsp;</P></TD><TD valign=bottom width=64.267 colspan=2><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:24px; text-indent:-12px; font-size:9pt" align=justify>Net loss for period</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; text-indent:49.467px; font-size:9pt">--</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; text-indent:39.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; text-indent:44.8px; font-size:9pt">--</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; text-indent:31.6px; font-size:9pt">(954)</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; text-indent:56.333px; font-size:9pt">--</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; text-indent:38.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; text-indent:19.133px; font-size:9pt">(954)</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:24px; text-indent:-12px; font-size:9pt" align=justify>Other comprehensive income</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; text-indent:49.467px; font-size:9pt">--</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; text-indent:39.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; text-indent:44.8px; font-size:9pt">--</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; text-indent:49.6px; font-size:9pt">--</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; text-indent:52.333px; font-size:9pt">18</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; text-indent:38.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:33.133px; font-size:9pt; border-bottom:1px solid #000000">18</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:48px; text-indent:-12px; font-size:9pt" align=justify>Comprehensive loss</P>
</TD><TD valign=bottom width=80.533><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=66.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=72.4><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=83.533><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=67.4><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:19.133px; font-size:9pt; border-bottom:1px solid #000000">(936)</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:24px; text-indent:-12px; font-size:9pt" align=justify>Stock based compensation</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; text-indent:49.467px; font-size:9pt">--</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; text-indent:39.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; text-indent:40.8px; font-size:9pt">20</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; text-indent:49.6px; font-size:9pt">--</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; text-indent:56.333px; font-size:9pt">--</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; text-indent:38.067px; font-size:9pt">--</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; text-indent:33.133px; font-size:9pt">20</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:24px; text-indent:-12px; font-size:9pt">Issuance of treasury shares for vested restricted stock</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; text-indent:30.467px; font-size:9pt">5,274</P>
</TD><TD valign=bottom width=66.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; text-indent:26.8px; font-size:9pt">(101)</P>
</TD><TD valign=bottom width=83.533><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=96><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; text-indent:28.067px; font-size:9pt">101</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; padding-left:24px; text-indent:-12px; font-size:9pt">Issuance of new shares for vested restricted stock</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:30.467px; font-size:9pt; border-bottom:1px solid #000000">5,838</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:39.067px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:44.8px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:49.6px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:56.333px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:38.067px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:37.133px; font-size:9pt; border-bottom:1px solid #000000">--</P>
</TD></TR>
<TR><TD valign=bottom width=185><P style="line-height:11pt; margin:0px; font-size:9pt" align=justify>Balance at March 31, 2009</P>
</TD><TD valign=bottom width=80.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; text-indent:9.467px; font-size:9pt; border-bottom:3px double #000000">2,194,348</P>
</TD><TD valign=bottom width=66.267><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22 </P>
</TD><TD valign=bottom width=72.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;20,647</P>
</TD><TD valign=bottom width=83.533><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10,323)</P>
</TD><TD valign=bottom width=96><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(217)</P>
</TD><TD valign=bottom width=67.4><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=64.267 colspan=2><P style="line-height:11pt; margin:0px; padding-bottom:4px; font-size:9pt; border-bottom:3px double #000000">$ &nbsp;&nbsp;10,129</P>
</TD></TR>
<TR><TD valign=bottom width=185><P>&nbsp;</P></TD><TD valign=bottom width=80.533><P style="margin:0px" align=justify><BR></P>
</TD><TD valign=bottom width=66.267><P>&nbsp;</P></TD><TD valign=bottom width=72.4><P>&nbsp;</P></TD><TD valign=bottom width=83.533><P>&nbsp;</P></TD><TD valign=bottom width=96><P>&nbsp;</P></TD><TD valign=bottom width=67.4><P>&nbsp;</P></TD><TD valign=bottom width=64.267 colspan=2><P>&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><I>See accompanying Notes to Condensed Consolidated Financial Statements.</I> </P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>4</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always" align=center><BR></P>
<A NAME="_DV_M47"></A><A NAME="_DV_M48"></A><P style="margin:0px"><BR></P>
<A NAME="_DV_M49"></A><P style="margin:0px" align=center><B><U>THE LGL GROUP, INC. </U></B></P>
<A NAME="_DV_M50"></A><P style="margin-top:0px; margin-bottom:6.667px" align=center><B><U>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS &#151; UNAUDITED</U></B></P>
<A NAME="_DV_M51"></A><P style="margin:0px" align=center>(In thousands)</P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=459.133></TD><TD width=84></TD><TD width=78></TD></TR>
<TR><TD valign=top width=459.133><P style="line-height:10pt; margin:0px; font-size:8pt"><B>&nbsp;</B></P>
<P style="line-height:10pt; margin:0px; font-size:8pt"><B>&nbsp;</B></P>
</TD><TD valign=top width=162 colspan=2><P style="margin:0px; padding-bottom:4px" align=center><B>Three Months Ended</B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31,</B></P>
</TD></TR>
<TR><TD valign=top width=459.133><P style="line-height:10pt; margin:0px; font-size:8pt"><B>&nbsp;</B></P>
</TD><TD valign=top width=84><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=top width=78><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008</B></P>
</TD></TR>
<TR><TD valign=top width=459.133><P>&nbsp;</P></TD><TD valign=top width=84><P>&nbsp;</P></TD><TD valign=top width=78><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>OPERATING ACTIVITIES</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Net loss</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:-3.933px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(954)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:3.8px">$ &nbsp;(590)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Adjustments to reconcile net loss to net cash provided by (used in) operating activities:</P>
</TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-right:6.733px">Depreciation</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:38.333px">257</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:26.067px">255</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Stock based compensation</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:2.867px; padding-right:2.867px; text-indent:51px">20</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:32.733px">33</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Amortization of finite-lived intangible assets</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:45px">15</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:32.733px">15</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Changes in operating assets and liabilities:</P>
</TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:13.733px; padding-right:6.733px; text-indent:-6.733px">&nbsp;&nbsp;&nbsp;Accounts receivable</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:28.333px">2,350</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:26.067px">237</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:12.733px; padding-right:6.733px; text-indent:-6.733px">&nbsp;&nbsp;&nbsp;&nbsp;Inventories</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:29.4px">(113)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:23.8px">(79)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:12.733px; padding-right:6.733px; text-indent:-6.733px">&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:38.333px">107</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:23.8px">(23)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:12.733px; padding-right:6.733px; text-indent:-6.733px">&nbsp;&nbsp;&nbsp;&nbsp;Other assets/liabilities</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:45px; border-bottom:1px solid #000000">39</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:23.8px; border-bottom:1px solid #000000">(25)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px"><B>Net cash provided by (used in) operating activities</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:28.333px; border-bottom:1px solid #000000">1,721</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:17.133px; border-bottom:1px solid #000000">(177)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P>&nbsp;</P></TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>INVESTING ACTIVITIES</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Capital expenditures</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:29.4px; border-bottom:1px solid #000000">(116)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:23.8px; border-bottom:1px solid #000000">(35)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>Net cash used in investing activities</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:29.4px; border-bottom:1px solid #000000">(116)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:23.8px; border-bottom:1px solid #000000">(35)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P>&nbsp;</P></TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>FINANCING ACTIVITIES</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Net (repayments) borrowings on note payable to bank</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:19.4px">(1,366)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:26.067px">586</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Repayments of long-term debt</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:36.067px; border-bottom:1px solid #000000">(83)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:23.8px; border-bottom:1px solid #000000">(97)</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>Net cash (used in) provided by financing activities</B></P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:19.4px; border-bottom:1px solid #000000">(1,449)</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:26.067px; border-bottom:1px solid #000000">489</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P>&nbsp;</P></TD><TD valign=bottom width=84><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Increase in cash and cash equivalents</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; text-indent:38.333px">156</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; text-indent:26.067px">277</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Cash and cash equivalents at beginning of period</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:28.333px; border-bottom:1px solid #000000">5,325</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:16.067px; border-bottom:1px solid #000000">5,233</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Cash and cash equivalents at end of period</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; text-indent:1.667px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,481</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;5,510</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P>&nbsp;</P></TD><TD valign=bottom width=84><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>Supplemental Disclosure:</B></P>
</TD><TD valign=bottom width=84><P>&nbsp;</P></TD><TD valign=bottom width=78><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Cash paid for interest</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;93</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; text-indent:-0.6px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;98</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px">Cash paid for income taxes</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:-6.733px"><B>Noncash Financing Transactions:</B></P>
</TD><TD valign=bottom width=84><P>&nbsp;</P></TD><TD valign=bottom width=78><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=459.133><P style="margin:0px; padding-left:6.733px; padding-right:6.733px; text-indent:11.267px">Issuance of treasury shares for vested restricted stock</P>
</TD><TD valign=bottom width=84><P style="margin:0px; padding-left:8.867px; padding-right:2.867px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101</P>
</TD><TD valign=bottom width=78><P style="margin:0px; padding-left:6.733px; padding-right:7.667px; padding-bottom:4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86 </P>
</TD><A NAME="_DV_M52"></A></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><I>See accompanying Notes to Condensed Consolidated Financial Statements.</I></P>
<A NAME="_DV_M55"></A><P style="margin-top:0px; margin-bottom:6.667px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>5</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; page-break-before:always" align=center><B><U>THE LGL GROUP, INC.</U></B></P>
<A NAME="_DV_M56"></A><P style="margin:0px" align=center><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M57"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>A.</B></P>
<P style="margin:0px; padding-left:24px"><B>Subsidiaries of the Registrant </B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M58"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">As of March 31, 2009, the subsidiaries of The LGL Group, Inc. (the &#147;Company&#148;) are as follows: &nbsp;</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=361.733></TD><TD width=105.267></TD></TR>
<TR><TD valign=top width=361.733><P style="margin:0px"><B>&nbsp;</B></P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:6.2px"><B><U>Owned By LGL</U></B></P>
</TD></TR>
<TR><TD valign=top width=361.733><P style="margin:0px">M-tron Industries, Inc.</P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:34.667px">100.0%</P>
</TD></TR>
<TR><TD valign=top width=361.733><P style="margin:0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M-tron Industries, Ltd.</P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:34.667px">100.0%</P>
</TD></TR>
<TR><TD valign=top width=361.733><P style="margin:0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Piezo Technology, Inc.</P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:34.667px">100.0%</P>
</TD></TR>
<TR><TD valign=top width=361.733><P style="margin-top:0px; margin-bottom:-16px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Piezo Technology India Private Ltd. </P>
<P style="margin:0px; text-indent:351.933px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:41.333px">99.9%</P>
</TD></TR>
<TR><TD valign=top width=361.733><P style="margin-top:0px; margin-bottom:-16px">Lynch Systems, Inc. </P>
<P style="margin:0px; text-indent:355.467px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=105.267><P style="margin:0px; text-indent:23.933px">&nbsp;&nbsp;&nbsp;100.0%</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M59"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The Company operates through its principal subsidiary, M-tron Industries, Inc. (&#147;Mtron&#148;), which includes the operations of M-tron Industries, Ltd. and Piezo Technology, Inc. (&#147;PTI&#148;). The combined operations are referred to herein as &#147;MtronPTI.&#148; &nbsp;MtronPTI has operations in Orlando, Florida, Yankton, South Dakota and Noida, India. &nbsp;In addition, MtronPTI has a sales office in Hong Kong. &nbsp;&nbsp;&nbsp;</P>
<A NAME="_DV_M62"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>B.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Basis of Presentation </B></P>
<A NAME="_DV_M63"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2009.</P>
<A NAME="_DV_M64"></A><A NAME="_DV_M65"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">For further information, refer to the consolidated financial statements and footnotes thereto included in the Company&#146;s Annual Report on Form 10-K for the year ended December 31, 2008. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px"><I>Reclassifications</I></P>
<P style="line-height:normal; margin-top:0px; margin-bottom:13.333px; text-indent:24px">Certain prior year amounts in the accompanying condensed consolidated financial statements have been reclassified to conform to the current year presentation. &nbsp;<FONT style="font-size:11pt">We have reclassified $144,000 from liabilities of discontinued operations to other accrued expenses.</FONT></P>
<A NAME="_DV_M66"></A><A NAME="_DV_M67"></A><A NAME="_DV_M68"></A><A NAME="_DV_M69"></A><A NAME="_DV_M74"></A><A NAME="_DV_M76"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>C.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Investment </B></P>
<A NAME="_DV_M77"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">At December 31, 2008, the Company determined that a decline in fair value of a marketable security held was judged to be other than temporary and recorded an impairment charge of $54,000 included in other income (expense) during the three months ended December 31, 2008 to adjust the cost basis down to the fair value at December 31, 2008.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The following is a summary of a marketable security (investment) held by the Company:</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=231.133></TD><TD width=64.467></TD><TD width=84></TD><TD width=67.533></TD></TR>
<TR><TD valign=bottom width=231.133><P>&nbsp;</P></TD><TD valign=bottom width=64.467><P style="line-height:11.4pt; margin:0px; padding-right:4.4px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>Cost</B></P>
</TD><TD valign=bottom width=84><P style="line-height:11.4pt; margin:0px; padding-bottom:4px" align=center><B>Gross</B></P>
<P style="line-height:11.4pt; margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>Unrealized Gain</B></P>
</TD><TD valign=bottom width=67.533><P style="line-height:11.4pt; margin:0px; padding-bottom:4px" align=center><B>Fair</B></P>
<P style="line-height:11.4pt; margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>Value</B></P>
</TD></TR>
<TR><TD valign=bottom width=231.133><P>&nbsp;</P></TD><TD valign=bottom width=216 colspan=3><P style="line-height:11.4pt; margin:0px" align=center>(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=231.133><P style="line-height:11.4pt; margin:0px">March 31, 2009</P>
</TD><TD valign=bottom width=64.467><P style="line-height:11.4pt; margin:0px; text-indent:1.867px" align=justify> $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</P>
</TD><TD valign=bottom width=84><P style="line-height:11.4pt; margin:0px; text-indent:5.133px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</P>
</TD><TD valign=bottom width=67.533><P style="line-height:11.4pt; margin:0px; text-indent:1.8px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>6</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=231.133></TD><TD width=64.467></TD><TD width=84></TD><TD width=67.533></TD></TR>
<TR><TD valign=bottom width=231.133><P style="line-height:11.4pt; margin:0px">December 31, 2008</P>
</TD><TD valign=bottom width=64.467><P style="line-height:11.4pt; margin:0px; text-indent:1.867px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</P>
</TD><TD valign=bottom width=84><P style="line-height:11.4pt; margin:0px; text-indent:2.867px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=67.533><P style="line-height:11.4pt; margin:0px; text-indent:1.8px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:24px">At March 31, 2009 and December 31, 2008, the Company has no margin liability against its investment.</P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M78"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>D.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Inventories </B></P>
<A NAME="_DV_M79"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Inventories are stated at the lower of cost or market value. &nbsp;At MtronPTI, inventories are valued using the first-in first-out (&#147;FIFO&#148;) method for 69.2% and 66.4% of the inventories, as of March 31, 2009 and December 31, 2008, respectively, and the remaining 30.8% and 33.6% as of March 31, 2009 and December 31, 2008, respectively, are valued using last-in first-out (&#147;LIFO&#148;). &nbsp;The Company reduces the value of its inventories to market value when the market value is believed to be less than the cost of the item.</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=256.6></TD><TD width=102></TD><TD width=96></TD></TR>
<TR><TD valign=top width=256.6><P style="line-height:10pt; margin:0px; font-size:8pt"><B>&nbsp;</B></P>
<P style="line-height:10pt; margin:0px; font-size:8pt"><B>&nbsp;</B></P>
</TD><TD valign=top width=102><P style="margin:0px" align=center><B>March 31,</B></P>
<P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=top width=96><P style="margin:0px; text-indent:1.267px"><B>December 31,</B></P>
<P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>&nbsp;2008 </B></P>
</TD></TR>
<TR><TD valign=bottom width=256.6><P>&nbsp;</P></TD><TD valign=bottom width=198 colspan=2><P style="margin:0px" align=center>(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=256.6><P style="margin:0px">Raw materials</P>
</TD><TD valign=bottom width=102><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; text-indent:1.267px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,524</P>
</TD><TD valign=bottom width=96><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; text-indent:9.533px">$ &nbsp;&nbsp;&nbsp;2,576</P>
</TD></TR>
<TR><TD valign=bottom width=256.6><P style="margin:0px">Work in process</P>
</TD><TD valign=bottom width=102><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; text-indent:27.933px">1,514</P>
</TD><TD valign=bottom width=96><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; text-indent:29.533px">1,440</P>
</TD></TR>
<TR><TD valign=bottom width=256.6><P style="margin:0px">Finished goods</P>
</TD><TD valign=bottom width=102><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; text-indent:27.933px; border-bottom:1px solid #000000">1,196</P>
</TD><TD valign=bottom width=96><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; text-indent:29.533px; border-bottom:1px solid #000000">1,105</P>
</TD></TR>
<TR><TD valign=bottom width=256.6><P style="margin:0px; padding-left:14.2px">Total Inventories</P>
</TD><TD valign=bottom width=102><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; text-indent:1.267px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,234</P>
</TD><TD valign=bottom width=96><P style="margin:0px; padding-left:4.8px; padding-right:4.8px; padding-bottom:4px; text-indent:12.867px; border-bottom:3px double #000000">$ &nbsp;&nbsp;5,121</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:24px">Current cost exceeded the LIFO value of inventories by $233,000 and $287,000 at March 31, 2009 and December 31, 2008, respectively.</P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M80"></A><A NAME="_DV_M81"></A><A NAME="_DV_M84"></A><A NAME="_DV_M87"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>E.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Note Payable to Banks and Long-Term Debt</B></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=438.067></TD><TD width=97.533></TD><TD width=100.533></TD></TR>
<TR><TD valign=bottom width=438.067><P>&nbsp;</P></TD><TD valign=bottom width=97.533><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31, 2009</B></P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; padding-bottom:4px" align=center><B>December 31, </B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008</B></P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px" align=justify><B>Note Payable:</B></P>
</TD><TD valign=bottom width=198.067 colspan=2><P style="margin:0px" align=center>(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px">MtronPTI revolving loan (First National Bank of Omaha (&#147;FNBO&#148;)) at 30-day LIBOR plus 2.1%, not to go below 4.00% (4.00% at March 31, 2009), due June 2009 &nbsp;</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; padding-bottom:4px; text-indent:-1.4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,383</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; padding-bottom:4px; text-indent:8.6px; border-bottom:3px double #000000" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,749</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P>&nbsp;</P></TD><TD valign=bottom width=97.533><P>&nbsp;</P></TD><TD valign=bottom width=100.533><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px" align=justify><B>Long-Term Debt:</B></P>
</TD><TD valign=bottom width=97.533><P>&nbsp;</P></TD><TD valign=bottom width=100.533><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px">MtronPTI term loan (RBC Centura Bank (&#147;RBC&#148;)) due October 2010. &nbsp;The note bears interest at LIBOR Base Rate plus 2.75%. &nbsp;Interest rate swap converts loan to a fixed rate, at 7.51% at March 31, 2009 &nbsp;</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; text-indent:-1.4px" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,797</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; text-indent:8.6px" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,817</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px">MtronPTI term loan (FNBO) at 30-day LIBOR plus 2.1%. Interest rate swap converts loan to a fixed rate, at 5.60% at March 31, 2009, due January 2013 &nbsp;</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; text-indent:35.267px" align=justify>1,144</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; text-indent:35.267px" align=justify>1,187</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px">Rice University Promissory Note at a fixed interest rate of 4.5%, due August 2009</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; padding-bottom:4px; text-indent:51.933px; border-bottom:1px solid #000000" align=justify>33</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; padding-bottom:4px; text-indent:51.933px; border-bottom:1px solid #000000" align=justify>53</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P>&nbsp;</P></TD><TD valign=bottom width=97.533><P style="margin:0px; text-indent:35.267px" align=justify>3,974</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; text-indent:35.267px" align=justify>4,057</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px" align=justify>Current maturities</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; padding-bottom:4px; text-indent:45.267px; border-bottom:1px solid #000000" align=justify>382</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; padding-bottom:4px; text-indent:45.267px; border-bottom:1px solid #000000" align=justify>397</P>
</TD></TR>
<TR><TD valign=bottom width=438.067><P style="margin:0px; padding-left:24px; text-indent:-24px" align=justify>Long -Term Debt</P>
</TD><TD valign=bottom width=97.533><P style="margin:0px; padding-bottom:4px; text-indent:-1.4px; border-bottom:3px double #000000" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,592</P>
</TD><TD valign=bottom width=100.533><P style="margin:0px; padding-bottom:4px; text-indent:11.933px; border-bottom:3px double #000000" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;3,660</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M88"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">On October 14, 2004, MtronPTI entered into a loan agreement with FNBO (the &#147;FNBO Loan Agreement&#148;). &nbsp;The FNBO Loan Agreement provides for a short-term credit facility of up to $5,500,000 (the &#147;FNBO Revolving Loan&#148;). &nbsp;The provisions of the FNBO Revolving Loan were subsequently amended, most recently on June 30, 2008. &nbsp;The principal balance of the FNBO Revolving Loan currently bears interest at 30-day LIBOR plus 2.1% (not to go below 4.00%), with interest only payments due monthly and the final payment of principal and interest due on June 30, 2009. &nbsp;At March 31, 2009, the amount outstanding under the revolving credit loan was $1,383,000. &nbsp;The Company had $4,117,000 of unused borrowing capacity under its revolving line of credit at March 31, 2009, compared to $2,751,000 at December 31, 2008.</P>
<P style="margin-top:0px; margin-bottom:13.333px"></P>
<P style="margin:0px; padding-right:24px" align=center>7</P>
<P style="margin:0px" align=justify></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px; page-break-before:always">The FNBO Loan Agreement also provides for a term loan in the original principal amount of $2,000,000 (the &#147;FNBO Term Loan&#148;). &nbsp;The provisions of the FNBO Term Loan were subsequently amended, most recently on June 30, 2008. &nbsp;Under such amendment, the original principal amount of the FNBO Term Loan was approximately $1,410,000, and the principal balance bears interest at 30-day LIBOR plus 2.1%, with principal and interest payments due monthly and the final payment of principal and interest due January 24, 2013.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The FNBO Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to, financial covenants that MtronPTI maintain: (i) tangible net worth of not less than $7.0 million, (ii) a ratio of current assets to current liabilities of not less than 1.5 to 1.0; (iii) a ratio of total liabilities to tangible net worth of not greater than 2.75 to 1.0; and (iv) a fixed charge coverage ratio of not less than 1.2 to 1.0. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">At March 31, 2009, the Company&#146;s subsidiary MtronPTI was not in compliance with the tangible net worth covenant ($6.9 million in tangible net worth vs. the minimum requirement of $7.0 million) and the fixed charge coverage ratio covenant (0.52 to 1.0 fixed charge ratio vs. the minimum requirement of 1.2 to 1.0). &nbsp;FNBO has agreed to waive non-compliance with those covenants for the quarter ended March 31, 2009, provided that (i) the Company making a cash infusion to MtronPTI for the repayment of $1.0 million of the amount outstanding under the FNBO Revolving Loan and (ii) a freeze on all payments from MtronPTI to the Company (including, but not limited to, interest payments and management fees) until MtronPTI is in full compliance with those covenants. &nbsp;FNBO also agreed to amend the FNBO Loan Agreement to (i) allow the $1.0 million cash infusion to be included in the numerator of the fixed charge coverage ratio for future calcu
lations and (ii) provide that if MtronPTI is not in compliance with the covenants at the subsequent quarterly testing dates, MtronPTI will have 45 days from the end of such quarter to cure the default. The Company expects to finalize the amendments with FNBO shortly. The Company expects that, with these amendments and based on its current covenant compliance projections, MtronPTI will be in compliance with the FNBO Loan Agreement covenants at each quarterly testing date through March 31, 2010.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">All outstanding obligations under the FNBO Loan Agreement are guaranteed by the Company.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">In connection with the FNBO Term Loan, MtronPTI entered into a separate interest rate swap agreement with FNBO from which it receives periodic payments at the LIBOR Base Rate and makes periodic payments at a fixed rate of 5.60% through the term of the FNBO Term Loan. &nbsp;The Company has designated this swap as a cash flow hedge in accordance with Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 133 &#147;Accounting for Derivative Instruments and Hedging Activities&#148; (&#147;SFAS 133&#148;). &nbsp;The fair value of the interest rate swap at March 31, 2009 is ($50,000) net of any tax effect, and is included in &#147;other accrued expenses&#148; on the condensed consolidated balance sheets. &nbsp;The change in fair value is reflected in accumulated other comprehensive loss, net of any tax effect.</P>
<P style="margin-top:0px; margin-bottom:13.333px">On September 30, 2005, MtronPTI entered into a loan agreement (the &#147;RBC Loan Agreement&#148;) with RBC, which provides for a loan in the original principal amount of $3,040,000 (the &#147;RBC Term Loan&#148;). &nbsp;The RBC Term Loan bears interest at LIBOR Base Rate plus 2.75% and is being repaid in monthly installments based on a 20 year amortization, with the then remaining principal balance and interest due on the fifth anniversary of the RBC Loan Agreement. &nbsp;The RBC Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to, financial covenants that MtronPTI maintain: (i) a ratio of total liabilities to tangible net worth of not greater than 4.0 to 1.0; (ii) tangible net worth of at least $4.2 million; and (iii) a fixed charge coverage ratio of not less than 1.2 to 1.0. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">At March 31, 2009, the Company&#146;s subsidiary MtronPTI was not in compliance with the fixed charge coverage ratio covenant (0.52 to 1.0 fixed charge coverage ratio vs. the minimum requirement of 1.2 to 1.0). &nbsp;RBC has agreed to waive non-compliance with that covenant for the quarter ended March 31, 2009, contingent upon (i) the repayment by the Company on behalf of MtronPTI of $400,000 of the amount outstanding under the RBC Term Loan on or before May 31, 2009, (ii) a freeze on all payments from MtronPTI to the Company (including, but not limited to, interest payments and management fees) until MtronPTI is in full compliance with that covenant and (iii) &nbsp;RBC&#146;s receipt of an updated appraisal of certain of MtronPTI&#146;s property securing obligations under the RBC Loan Agreement, which appraisal may necessitate an additional repayment under the RBC Term Loan in order to maintain a loan-to-value ratio acceptable to RBC. &nbsp
;RBC also agreed to amend the RBC Loan Agreement to (i) allow the $1,000,000 cash infusion to MtronPTI for the partial repayment under the FNBO Revolving Loan to be included </P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>8</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always">in the numerator of the fixed charge coverage ratio for calculations on each quarterly testing date through March 31, 2010, (ii) increase the amount required under the tangible net worth covenant from $4.2 million to $7.0 million (in line with the tangible net worth covenant under the FNBO Loan Agreement) and (iii) provide that if MtronPTI is not in compliance with the covenants at any quarterly testing date through March 31, 2010, MtronPTI will have 45 days from the end of such quarter to cure the default. &nbsp;The Company expects to finalize the amendments with RBC shortly. &nbsp;The Company expects that, with these amendments and based on its current covenant compliance projections, MtronPTI will be in compliance with the RBC Loan Agreement covenants at each quarterly testing date through March 31, 2010.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">All outstanding obligations under the RBC Loan Agreement are collateralized by security interests in the assets of MtronPTI and guaranteed by the Company.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">In connection with the RBC Term Loan, MtronPTI entered into a five-year interest rate swap from which it receives periodic payments at the LIBOR Base Rate and makes periodic payments at a fixed rate of 7.51% with monthly settlement and rate reset dates. &nbsp;The Company has designated this swap as a cash flow hedge in accordance with SFAS 133. &nbsp;The fair value of the interest rate swap at March 31, 2009 is ($169,000) net of any tax effect, and is included in &#147;other accrued expenses&#148; on the condensed consolidated balance sheets. &nbsp;The change in fair value is reflected in accumulated other comprehensive loss, net of any tax effect.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px" align=justify><B>F.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px" align=justify><B>Stock Based Compensation </B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">On December 17, 2008, the Board of Directors granted restricted shares to eight of its members at 5,555 shares each. &nbsp;No expense was recognized in 2008 for this grant. All of these shares vest ratably during 2009 at the end of each respective quarter. &nbsp;Total stock compensation related expense for all outstanding grants for the three-month period ended March 31, 2009 was $20,000. The unrecognized compensation expense of $60,000 will be recognized over the next nine months.<A NAME="_DV_M99"></A></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>G.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Loss Per Share</B></P>
<P style="margin:0px; text-indent:24px">The Company computes loss per share in accordance with SFAS No. &nbsp;128, &#147;Earnings Per Share.&#148; &nbsp;Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. &nbsp;Diluted earnings per share adjusts basic earnings per share for the effects of stock options, restricted common stock, and other potentially dilutive financial instruments, only in the periods in which the effects are dilutive.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The following securities have been excluded from the diluted loss per share computation because the impact of the assumed exercise of stock options and unvested restricted stock would have been anti-dilutive because the Company has reported net losses:</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=292.6></TD><TD width=86.667></TD><TD width=86.667></TD></TR>
<TR><TD valign=bottom width=292.6><P>&nbsp;</P></TD><TD valign=bottom width=173.333 colspan=2><P style="margin:0px; padding-bottom:4px" align=center><B>Three Months Ended </B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31, </B></P>
</TD></TR>
<TR><TD valign=bottom width=292.6><P>&nbsp;</P></TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008</B></P>
</TD></TR>
<TR><TD valign=bottom width=292.6><P style="margin:0px" align=justify>Options to purchase common stock</P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; text-indent:15.2px">200,000</P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; text-indent:15.333px" align=justify>200,000</P>
</TD></TR>
<TR><TD valign=bottom width=292.6><P style="margin:0px" align=justify>Unvested restricted stock</P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; text-indent:21.867px; border-bottom:1px solid #000000">33,328</P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; text-indent:22px; border-bottom:1px solid #000000" align=justify>12,264</P>
</TD></TR>
<TR><TD valign=bottom width=292.6><P style="margin:0px; padding-left:11.067px" align=justify>Totals </P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; text-indent:15.2px; border-bottom:3px double #000000" align=justify>233,328</P>
</TD><TD valign=bottom width=86.667><P style="margin:0px; padding-bottom:4px; text-indent:15.2px; border-bottom:3px double #000000" align=justify>212,264</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<A NAME="_DV_M103"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>H.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Other Comprehensive Loss</B></P>
<A NAME="_DV_M104"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Other comprehensive loss includes the changes in fair value of investments classified as available-for-sale and the changes in fair values of derivative instruments designated as cash flow hedges.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">For the three months ended March 31, 2009, total comprehensive loss was ($936,000), comprised of net loss of ($954,000) and change in accumulated other comprehensive loss of ($18,000), compared to total comprehensive loss </P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>9</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always">of ($700,000) in the three months ended March 31, 2008, which was comprised of net loss of ($590,000) and change in accumulated other comprehensive loss of ($110,000).</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The change in accumulated other comprehensive loss, net of related taxes, for the three-month periods ended March 31, 2009 and 2008, are as follows: </P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=355.867></TD><TD width=93.133></TD><TD width=93.133></TD></TR>
<TR><TD valign=bottom width=355.867><P>&nbsp;</P></TD><TD valign=bottom width=186.267 colspan=2><P style="margin:0px; padding-bottom:4px" align=center><B>Three Months Ended </B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31,</B></P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P>&nbsp;</P></TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008</B></P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P>&nbsp;</P></TD><TD valign=bottom width=186.267 colspan=2><P style="margin:0px" align=center>(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P style="margin:0px" align=justify>Balance beginning of period </P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; text-indent:1.6px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(235) </P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; text-indent:1.267px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(101)</P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P style="margin:0px" align=justify>Deferred gain (loss) on swap liability on hedge contracts </P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; text-indent:51px">16</P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; text-indent:35.4px">(101)</P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P style="margin:0px" align=justify>Unrealized gain (loss) on available-for-sale securities</P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; text-indent:57.667px; border-bottom:1px solid #000000">2</P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; text-indent:48.733px; border-bottom:1px solid #000000">(9)</P>
</TD></TR>
<TR><TD valign=bottom width=355.867><P style="margin:0px; padding-left:17.4px" align=justify>Balance end of period </P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; text-indent:1.6px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(217)</P>
</TD><TD valign=bottom width=93.133><P style="margin:0px; padding-bottom:4px; text-indent:1.933px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(211)</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px" align=justify>The components of accumulated other comprehensive loss, net of related taxes at March 31, 2009 and December 31, 2008, are as follows:</P>
<P style="margin:0px" align=justify><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=355.933></TD><TD width=101.267></TD><TD width=99.933></TD></TR>
<TR><TD valign=bottom width=355.933><P>&nbsp;</P></TD><TD valign=bottom width=101.267><P style="margin:0px; padding-bottom:4px" align=center><B>March 31, </B></P>
<P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=bottom width=99.933><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>December 31, 2008</B></P>
</TD></TR>
<TR><TD valign=bottom width=355.933><P>&nbsp;</P></TD><TD valign=bottom width=201.2 colspan=2><P style="margin:0px" align=center>(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=355.933><P style="margin:0px" align=justify>Deferred loss on swap liability on hedge contracts </P>
</TD><TD valign=bottom width=101.267><P style="margin:0px; text-indent:1.6px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(219)</P>
</TD><TD valign=bottom width=99.933><P style="margin:0px; text-indent:-1.267px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(235)</P>
</TD></TR>
<TR><TD valign=bottom width=355.933><P style="margin:0px" align=justify>Unrealized gain on available-for-sale securities</P>
</TD><TD valign=bottom width=101.267><P style="margin:0px; padding-bottom:4px; text-indent:57.667px; border-bottom:1px solid #000000">2</P>
</TD><TD valign=bottom width=99.933><P style="margin:0px; padding-bottom:4px; text-indent:55.4px; border-bottom:1px solid #000000">--</P>
</TD></TR>
<TR><TD valign=bottom width=355.933><P style="margin:0px; padding-left:17.4px" align=justify>Accumulated other comprehensive loss </P>
</TD><TD valign=bottom width=101.267><P style="margin:0px; padding-bottom:4px; text-indent:1.6px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(217)</P>
</TD><TD valign=bottom width=99.933><P style="margin:0px; padding-bottom:4px; text-indent:5.4px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(235)</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<A NAME="_DV_M105"></A><A NAME="_DV_M107"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>I.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Fair Value Measurements</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The Company measures financial assets and liabilities at fair value in accordance with SFAS No.&nbsp;157, &#147;Fair Value Measurements.&#148;&nbsp; These measurements involve various valuation techniques and assume that the transactions would occur between market participants in the most advantageous market for the Company.&nbsp; The following is a summary of valuation techniques utilized by the Company for its significant financial assets and liabilities:</P>
<P style="margin-top:0px; margin-bottom:13.333px"><I>Assets</I></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">To estimate the market value of its marketable securities, the Company obtains current market pricing from quoted market sources or uses pricing for identical securities. Assets measured at fair value on a recurring basis are summarized below.</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=158.8></TD><TD width=107.067></TD><TD width=103.333></TD><TD width=107.8></TD><TD width=105></TD></TR>
<TR><TD valign=bottom width=158.8><P>&nbsp;</P></TD><TD valign=bottom width=107.067><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Quoted Prices in Active Markets for Identical Assets (Level 1)</P>
</TD><TD valign=bottom width=103.333><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Significant Other Observable Inputs (Level 2)</P>
</TD><TD valign=bottom width=107.8><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Significant Unobservable Inputs (Level 3)</P>
</TD><TD valign=bottom width=105><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>March 31, 2009</P>
</TD></TR>
<TR><TD valign=bottom width=158.8><P>&nbsp;</P></TD><TD valign=bottom width=423.2 colspan=4><P style="margin:0px" align=center>&nbsp;(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=158.8><P style="margin:0px">Marketable security</P>
</TD><TD valign=bottom width=107.067><P style="margin:0px; text-indent:12px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16 </P>
</TD><TD valign=bottom width=103.333><P style="margin:0px; text-indent:13.067px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=107.8><P style="margin:0px; text-indent:13.067px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=105><P style="margin:0px; text-indent:15.333px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>10</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always"><BR>
<BR>
<BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=158.8></TD><TD width=107.067></TD><TD width=103.333></TD><TD width=107.8></TD><TD width=105></TD></TR>
</TABLE>
<P style="margin-top:13.333px; margin-bottom:13.333px"><I>Liabilities</I></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">To estimate the fair value of the swap liability on hedge contracts as of the measurement date, the Company obtains inputs other than quoted prices that are observable for the liability. Liabilities measured at fair value on a recurring basis are summarized below.</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=158.8></TD><TD width=107.067></TD><TD width=103.333></TD><TD width=107.8></TD><TD width=105></TD></TR>
<TR><TD valign=bottom width=158.8><P>&nbsp;</P></TD><TD valign=bottom width=107.067><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Quoted Prices in Active Markets for Identical Assets (Level 1)</P>
</TD><TD valign=bottom width=103.333><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Significant Other Observable Inputs (Level 2)</P>
</TD><TD valign=bottom width=107.8><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Significant Unobservable Inputs (Level 3)</P>
</TD><TD valign=bottom width=105><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>March 31, 2009</P>
</TD></TR>
<TR><TD valign=bottom width=158.8><P>&nbsp;</P></TD><TD valign=bottom width=423.2 colspan=4><P style="margin:0px" align=center>&nbsp;(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=158.8><P style="margin:0px; padding-left:13.8px; text-indent:-13.8px">Swap liability on hedge contracts</P>
</TD><TD valign=bottom width=107.067><P style="margin:0px; text-indent:16.4px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=103.333><P style="margin:0px; text-indent:5.333px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;219</P>
</TD><TD valign=bottom width=107.8><P style="margin:0px; text-indent:13.067px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;--</P>
</TD><TD valign=bottom width=105><P style="margin:0px; text-indent:18.667px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;219</P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>J.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Foreign Sales<A NAME="_DV_M109"></A></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">For the three months ended March 31, 2009 and 2008, foreign revenues to specific countries were as follows:</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR height=0 style="font-size:0"><TD width=309></TD><TD width=115.2></TD><TD width=115.2></TD></TR>
<TR><TD valign=bottom width=309><P>&nbsp;</P></TD><TD valign=bottom width=230.4 colspan=2><P style="margin:0px; padding-left:13.067px; padding-right:10px; padding-bottom:4px" align=center><B>Three Months Ended </B></P>
<P style="margin:0px; padding-left:13.067px; padding-right:10px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>March 31,</B></P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify><B>Foreign Revenues:</B></P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2009</B></P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; padding-bottom:4px; border-bottom:1px solid #000000" align=center><B>2008</B></P>
</TD></TR>
<TR><TD valign=bottom width=309><P>&nbsp;</P></TD><TD valign=bottom width=230.4 colspan=2><P style="margin:0px; padding-left:11.867px; padding-right:10px" align=center>&nbsp;(in thousands)</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>Malaysia</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:0.2px" align=justify>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;896</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:0.2px">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,587</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>China </P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:46.867px" align=justify>790</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:36.867px">1,106</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>Singapore </P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:46.867px" align=justify>605</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:46.867px">367</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>Mexico</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:46.867px" align=justify>355</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:46.867px">430</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>Thailand</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:46.867px" align=justify>238</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:46.867px">423</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>Canada</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; text-indent:53.533px" align=justify>91</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; text-indent:46.867px">518</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>All other foreign countries</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; padding-bottom:4px; text-indent:46.867px; border-bottom:1px solid #000000" align=justify>723</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; padding-bottom:4px; text-indent:46.867px; border-bottom:1px solid #000000">950</P>
</TD></TR>
<TR><TD valign=bottom width=309><P style="margin:0px" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total foreign revenues</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:13.067px; padding-right:8.8px; padding-bottom:4px; text-indent:0.2px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,698</P>
</TD><TD valign=bottom width=115.2><P style="margin:0px; padding-left:11.867px; padding-right:10px; padding-bottom:4px; text-indent:0.2px; border-bottom:3px double #000000">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,381</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<A NAME="_DV_M110"></A><A NAME="_DV_M113"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>K.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Commitments and Contingencies </B></P>
<A NAME="_DV_M114"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">In the normal course of business, the Company and its subsidiaries may become defendants in certain product liability, worker claims and other litigation. &nbsp;The Company and its subsidiaries have no litigation pending at this time.</P>
<A NAME="_DV_M115"></A><P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>L.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>Income Taxes</B></P>
<A NAME="_DV_M116"></A><P style="margin-top:0px; margin-bottom:14.667px; text-indent:24px">The Company files a consolidated federal income tax returns, which includes all U.S. subsidiaries. &nbsp;The Company had a total net operating loss (&#147;NOL&#148;) carry-forward of $7,366,000 as of December 31, 2008. &nbsp;This NOL expires through 2028 if not utilized prior to that date. &nbsp;The Company had research and development credit carry-forwards of approximately $890,000 at December 31, 2008 that can be used to reduce future income tax liabilities and expire principally between 2020 and 2028. &nbsp;In addition, the Company has foreign tax credit carry-forwards of approximately $230,000 at December 31, 2008 that are available to reduce future U.S. income tax liabilities subject to certain limitations. &nbsp;These foreign tax credit carry-forwards expire at various times through 2018.</P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>11</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px; page-break-before:always">The Company provided a benefit of $30,000 and a provision of $49,000 for foreign income taxes, respectively, in the three months ended March 31, 2009 and 2008 and $0 for state taxes in each of those periods. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Due to the uncertainty surrounding the realization of the favorable U.S. tax attributes in future tax returns, we continue to record a full valuation allowance against our otherwise recognizable U.S. net deferred tax assets as of March 31, 2009 and December 31, 2008, except for the Company&#146;s $111,000 in AMT deferred tax assets which do not expire.<A NAME="_DV_M117"></A><A NAME="_DV_M118"></A></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px" align=justify><B>M.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px" align=justify><B>Related Party Transactions</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">At March 31, 2009, the Company had $5,481,000 of cash and cash equivalents. &nbsp;Of this amount, $3,026,000 is invested in United States Treasury money market funds for which affiliates of the Company serve as the investment manager to the respective fund, compared with $3,123,000 of $5,325,000 at December 31, 2008.<B> &nbsp;</B></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:24px; text-indent:-24px"><B>N.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:24px"><B>New Accounting Pronouncements</B></P>
<P style="margin:0px; text-indent:24px" align=justify>On April&nbsp;9, 2009, the Financial Accounting Standards Board (&#147;FASB&#148;) issued FSP No.&nbsp;FAS 157-4, &#147;Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.&#148; FSP No.&nbsp;FAS 157-4 amends SFAS No.&nbsp;157 and provides additional guidance for estimating fair value in accordance with SFAS No.&nbsp;157 when the volume and level of activity for the asset and liability have significantly decreased, as well as provides guidance on identifying circumstances that indicate a transaction is not orderly. FSP No.&nbsp;FAS 157-4 is effective for interim and annual periods ending after June&nbsp;15, 2009. The adoption of FSP No.&nbsp;FAS 157-4 is not expected to have a material impact on the Company&#146;s consolidated results of operations, cash flows or financial position.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">In February&nbsp;2009, the FASB issued FASB Staff Position No.&nbsp;141(R)-1, &#147;Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies&#148; (&#147;FSP 141(R)-1&#148;). This standard requires an asset or liability arising from a contingency in a business combination to be recognized at fair value if fair value can be reasonably determined. If it cannot be reasonably determined, then the asset or liability will need to be recognized in accordance with FASB Statement No.&nbsp;5, &#147;Accounting for Contingencies,&#148; and FASB Interpretation No.&nbsp;14, &#147;Reasonable Estimation of the Amount of the Loss.&#148; FSP 141(R)-1 is effective for fiscal years beginning after December&nbsp;15, 2008. The adoption of FSP 141(R)-1 is prospective and will impact the financial position and results of operations for acquisitions recorded after the date of adoption.</P>
<A NAME="_DV_M119"></A><P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>12</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always"><B>Item 2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px"><B>Forward Looking Statements</B></P>
<P style="margin:0px; text-indent:24px">Information included or incorporated by reference in this Quarterly Report on Form 10-Q may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different than the future results, performance or achievements expressed or implied by any forward-looking statements. &nbsp;Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words &#147;may,&#148; &#147;should,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;estimate,&#148; &#147;believe,&#148; &#147;intend&#148; or &#147;project&#148; or the negative of these words or other variations on these words or comparable terminology.</P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M120"></A><P style="margin:0px"><B>Results of Operations</B></P>
<A NAME="_DV_M121"></A><P style="margin:0px"><B><I>Three months ended March 31, 2009 compared to three months ended March 31, 2008</I></B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M122"></A><P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px"><B>Consolidated Revenues and Gross Margin </B></P>
<A NAME="_DV_M123"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Consolidated revenues decreased by $2,241,000, or 22.9%, to $7,542,000 for the first quarter 2009 from $9,783,000 for the comparable period in 2008. &nbsp;The decrease is due primarily to a general economic slowdown and a corresponding decrease in demand for the electronic components in which our products are used. &nbsp;This has resulted in a decrease in foreign sales of $1,683,000 and a decrease in domestic sales of $558,000 over the comparable period in 2008. Under the leadership of its new Chief Operating Officer, the Company has recently increased its efforts to grow revenue in additional segments of the timing and frequency equipment market, such as alternative energy management, high-end server/SANs, energy exploration, military personnel protection and homeland security. The Company is expecting to partially weather the recessionary impact on its current customers and revenue base with additional revenues f
rom growth in other industries. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<A NAME="_DV_M124"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Consolidated gross margin as a percentage of revenues for the first quarter 2009 decreased to 21.9% from 26.9% for the comparable period in 2008. &nbsp;This drop in gross margin is partially attributed to the overall slowdown in revenue combined with a minimum fixed cost infrastructure required to run the business at a reduced revenue volume. The Company has also undertaken a comprehensive resizing of its operations to realign its cost structure. This resizing program is expected to result in approximately $3 million of annualized cost savings, once fully implemented, which will partially offset the anticipated reduced revenue levels in all its domestic and foreign markets. At the same time, the resizing has resulted in near term cost increases to realign the manufacturing processes. This resizing is expected to improve the Company&#146;s gross margins beginning in fiscal 2010 despite a reduced level of revenues.</
P>
<A NAME="_DV_M125"></A><P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px"><B>Operating Loss</B></P>
<A NAME="_DV_M126"></A><A NAME="OLE_LINK1"></A><A NAME="OLE_LINK2"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Operating loss of $904,000 for the first quarter 2009 is an increased loss of $448,000 from the $456,000 operating loss for the comparable period in 2008. &nbsp;This increase in operating loss can be primarily attributed to a 5.0% reduction in gross margin. &nbsp;The increase in operating loss was partially offset by a decrease in engineering, selling and administrative expenses of $531,000 in the first quarter of 2009 compared to the same period in 2008. The reduction in engineering, selling and administrative expenses was primarily driven by a decrease in head count, a decrease in professional fees, and a decrease in the cost of continuing to comply with the Sarbanes-Oxley Act of 2002. &nbsp;The Company expects its new sales focus combined with its resizing efforts to result in better operating performance in future quarters.</P>
<A NAME="_DV_M127"></A><P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>13</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px; page-break-before:always"><B>Other Income (Expenses)</B></P>
<A NAME="_DV_M128"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Net interest expense for the first quarter 2009 was $89,000, compared with $63,000 for the comparable period in 2008. &nbsp;The increase in interest expense was primarily due to an increase in the outstanding borrowings under the revolving credit facility during the first quarter of 2009 compared to the comparable period in 2008. &nbsp;In the first quarter of 2009, the Company recognized $9,000 in other income, compared with other expense of $22,000 for the comparable period in 2008. The difference is primarily related to the remeasurement income (expense) the Company has recognized due to the changing exchange rates associated with one of the Company&#146;s foreign subsidiaries.</P>
<A NAME="_DV_M129"></A><P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px"><B>Income Taxes </B></P>
<A NAME="_DV_M130"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">The Company files a consolidated federal income tax return, which includes all subsidiaries. &nbsp;The income tax benefit for the three-month period ended March 31, 2009 included foreign taxes. &nbsp;The provision gives effect to our estimated tax liability at the end of the year. </P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Due to the uncertainty surrounding the realization of favorable U.S. tax attributes in future tax returns, we continue to record a full valuation allowance against our otherwise recognizable U.S. net deferred tax assets as of March 31, 2009 and December 31, 2008, except for the Company&#146;s $111,000 in AMT deferred tax assets, which do not expire.</P>
<A NAME="_DV_M131"></A><A NAME="_DV_M134"></A><A NAME="_DV_M137"></A><P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px"><B>Net Loss</B></P>
<A NAME="_DV_M138"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Net loss for the first quarter 2009 was $954,000 compared to net loss of $590,000 for the comparable period in 2008. &nbsp;This increase in net loss can be primarily attributed to a 5.0% reduction in gross margin. &nbsp;The increase in net loss was partially offset by a decrease in engineering, selling and administrative expenses of $531,000 in the first quarter of 2009 compared to the same period in 2008. &nbsp;The reduction in engineering, selling and administrative expenses was primarily driven by a decrease in head count, a decrease in professional fees, and a decrease in the cost of continuing to comply with the Sarbanes-Oxley Act of 2002. &nbsp;The Company expects its new revenues focus combined with its resizing efforts to result in improved operating results in future quarters.</P>
<A NAME="_DV_M139"></A><A NAME="_DV_M148"></A><A NAME="_DV_M159"></A><A NAME="_DV_M161"></A><P style="margin-top:0px; margin-bottom:13.333px; padding-left:17.267px; text-indent:-17.267px"><B>Liquidity and Capital Resources </B></P>
<A NAME="_DV_M162"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">The Company&#146;s cash and cash equivalents and the investment in marketable security at March 31, 2009 was $5,497,000 as compared to $5,339,000 at December 31, 2008. MtronPTI had unused borrowing capacity of $4,117,000 under MtronPTI&#146;s revolving line of credit at March 31, 2009, as compared to $2,751,000 at December 31, 2008. At March 31, 2009, MtronPTI had $1,383,000 outstanding under its revolving loan, compared with $2,749,000 at December 31, 2008.</P>
<A NAME="_DV_M163"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">At March 31, 2009, the Company&#146;s net working capital was $8,858,000 as compared to $9,683,000 at December 31, 2008. At March 31, 2009, the Company had current assets of $15,227,000 and current liabilities of $6,369,000. The ratio of current assets to current liabilities was 2.39 to 1.00 at March 31, 2009, compared to 2.26 to 1.00 at December 31, 2008. The decrease in net working capital is primarily due to the decrease in the Company&#146;s accounts receivable balance and a decrease in the outstanding balance under the revolving credit facility.</P>
<A NAME="_DV_M164"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Cash provided by operating activities was $1,721,000 for the three months ended March 31, 2009, compared to cash used in operating activities from operations of $177,000 for the three months ended March 31, 2008. The increase in cash provided by operating activities is due to the net decrease in the accounts receivable balance representing a net change in the outstanding accounts receivable balance for the three months ended March 31, 2009 from the collection of accounts receivable of $2,350,000, compared to a net collection of accounts receivable of $237,000 during the comparable period in 2008.</P>
<A NAME="_DV_M165"></A><P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>14</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px; page-break-before:always">Cash used in investing activities from operations was $116,000 for the three months ended March 31, 2009, compared to $35,000 for the three months ended March 31, 2008, as the Company continues to invest in new equipment. &nbsp;&nbsp;</P>
<A NAME="_DV_M166"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Cash used in financing activities from operations was $1,449,000 for the three months ended March 31, 2009, compared with cash provided by financing activities of $489,000 for the three months ended March 31, 2008. &nbsp;The increase in cash used in financing activities is due primarily to an increase in net repayments on the Company&#146;s note payable for the three months ended March 31, 2009 of $1,366,000 compared to a net borrowing of $586,000 during the comparable period in 2008.</P>
<A NAME="_DV_M167"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">At March 31, 2009, total liabilities of $9,961,000 was $1,359,000 less than the total liabilities at December 31, 2008 of $11,320,000. The debt decreased due to the decrease in MtronPTI&#146;s borrowing on its revolving loan, which was in addition to a decrease in term loans outstanding due to scheduled repayments. &nbsp;At March 31, 2009, the Company had $382,000 in current maturities of long-term debt compared with $397,000 at December 31, 2008. &nbsp;The decrease in consolidated current maturities of long-term debt was in addition to an increase in cash and cash equivalents of $156,000.</P>
<A NAME="_DV_M168"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">The Company believes that existing cash and cash equivalents, cash generated from operations and available borrowings on its revolver, will be sufficient to meet its ongoing working capital and capital expenditure requirements for the next twelve months. &nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">Our credit facilities include a revolving credit facility that currently terminates on June 30, 2009 and a term loan with an October 1, 2010 maturity date. &nbsp;At May 19, 2009, there was $1,902,000 of indebtedness outstanding under the revolving credit facility and $2,790,000 principal amount of indebtedness under the term loan. &nbsp;We will need to renew or replace such credit facilities as they expire or if they otherwise become unavailable, and we may require additional financing in order to fund our operations. &nbsp;We may be unable to renew our existing credit facilities, find replacement facilities, or obtain additional financing on acceptable terms, or at all, which may result in delays in payments to our vendors and in our ordinary measures to repair, replace or improve upon existing infrastructure, and may cause our customers to lose confidence in our ability to supply high-quality products in a timely manner.</P>
<A NAME="_DV_M169"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">On October 14, 2004, MtronPTI, entered into the FNBO Loan Agreement. &nbsp;The FNBO Loan Agreement provides for a short-term credit facility of up to $5,500,000, the FNBO Revolving Loan. &nbsp;The provisions of the FNBO Revolving Loan were subsequently amended, most recently on June 30, 2008. &nbsp;The principal balance of the FNBO Revolving Loan currently bears interest at 30-day LIBOR plus 2.1% (not to go below 4.00%), with interest only payments due monthly and the final payment of principal and interest due on June 30, 2009. &nbsp;At March 31, 2009, the amount outstanding under the revolving credit loan was $1,383,000. &nbsp;The Company had $4,117,000 of unused borrowing capacity under its revolving line of credit at March 31, 2009, compared to $2,751,000 at December 31, 2008.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">The FNBO Loan Agreement also provides for a term loan in the original principal amount of $2,000,000, the FNBO Term Loan. &nbsp;The provisions of the FNBO Term Loan were subsequently amended, most recently on June 30, 2008. &nbsp;Under such amendment, the original principal amount of the FNBO Term Loan was approximately $1,410,000, and the principal balance bears interest at 30-day LIBOR plus 2.1%, with principal and interest payments due monthly and the final payment of principal and interest due January 24, 2013.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">The FNBO Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to, financial covenants that MtronPTI maintain: (i) tangible net worth of not less than $7.0 million, (ii) a ratio of current assets to current liabilities of not less than 1.5 to 1.0; (iii) a ratio of total liabilities to tangible net worth of not greater than 2.75 to 1.0; and (iv) a fixed charge coverage ratio of not less than 1.2 to 1.0. </P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">At March 31, 2009, the Company&#146;s subsidiary MtronPTI was not in compliance with the tangible net worth covenant ($6.9 million in tangible net worth vs. the minimum requirement of $7.0 million) and the fixed charge coverage ratio covenant (0.52 to 1.0 fixed charge ratio vs. the minimum requirement of 1.2 to 1.0). &nbsp;FNBO has agreed to waive non-compliance with those covenants for the quarter ended March 31, 2009, provided that (i) the Company making a cash infusion to MtronPTI for the repayment of $1.0 million of the amount outstanding under </P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>15</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always">the FNBO Revolving Loan and (ii) a freeze on all payments from MtronPTI to the Company (including, but not limited to, interest payments and management fees) until MtronPTI is in full compliance with those covenants. FNBO also agreed to amend the FNBO Loan Agreement to (i) allow the $1.0 million cash infusion to be included in the numerator of the fixed charge coverage ratio for future calculations and (ii) provide that if MtronPTI is not in compliance with the covenants at the subsequent quarterly testing dates, MtronPTI will have 45 days from the end of such quarter to cure the default. The Company expects to finalize the amendments with FNBO shortly. &nbsp;The Company expects that, with these amendments and based on its current covenant compliance projections, MtronPTI will be in compliance with the FNBO Loan Agreement covenants at each quarterly testing date through March 31, 2010. </P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">All outstanding obligations under the FNBO Loan Agreement are guaranteed by the Company.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">In connection with the FNBO Term Loan, MtronPTI entered into a separate interest rate swap agreement with FNBO from which it receives periodic payments at the LIBOR Base Rate and makes periodic payments at a fixed rate of 5.60% through the term of the FNBO Term Loan. The Company has designated this swap as a cash flow hedge in accordance with SFAS 133. &nbsp;The fair value of the interest rate swap at March 31, 2009 is ($50,000) net of any tax effect, and is included in &#147;other accrued expenses&#148; on the condensed consolidated balance sheets. &nbsp;The change in fair value is reflected in accumulated other comprehensive loss, net of any tax effect.</P>
<P style="margin-top:0px; margin-bottom:13.333px">On September 30, 2005, MtronPTI entered into a loan agreement (the &#147;RBC Loan Agreement&#148;) with RBC, which provides for a loan in the original principal amount of $3,040,000 (the &#147;RBC Term Loan&#148;). &nbsp;The RBC Term Loan bears interest at LIBOR Base Rate plus 2.75% and is being repaid in monthly installments based on a 20 year amortization, with the then remaining principal balance and interest due on the fifth anniversary of the RBC Loan Agreement. The RBC Loan Agreement contains a variety of affirmative and negative covenants, including, but not limited to, financial covenants that MtronPTI maintain: (i) a ratio of total liabilities to tangible net worth of not greater than 4.0 to 1.0; (ii) tangible net worth of at least $4.2 million; and (iii) a fixed charge coverage ratio of not less than 1.2 to 1.0. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">At March 31, 2009, the Company&#146;s subsidiary MtronPTI was not in compliance with the fixed charge coverage ratio covenant (0.52 to 1.0 fixed charge coverage ratio vs. the minimum requirement of 1.2 to 1.0). &nbsp;RBC has agreed to waive non-compliance with that covenant for the quarter ended March 31, 2009, contingent upon (i) the repayment by the Company on behalf of MtronPTI of $400,000 of the amount outstanding under the RBC Term Loan on or before May 31, 2009, (ii) a freeze on all payments from MtronPTI to the Company (including, but not limited to, interest payments and management fees) until MtronPTI is in full compliance with that covenant and (iii) &nbsp;RBC&#146;s receipt of an updated appraisal of certain of MtronPTI&#146;s property securing obligations under the RBC Loan Agreement, which appraisal may necessitate an additional repayment under the RBC Term Loan in order to maintain a loan-to-value ratio acceptable to RBC. R
BC also agreed to amend the RBC Loan Agreement to (i) allow the $1,000,000 cash infusion to MtronPTI for the partial repayment under the FNBO Revolving Loan to be included in the numerator of the fixed charge coverage ratio for calculations on each quarterly testing date through March 31, 2010, (ii) increase the amount required under the tangible net worth covenant from $4.2 million to $7.0 million (in line with the tangible net worth covenant under the FNBO Loan Agreement) and (iii) provide that if MtronPTI is not in compliance with the covenants at any quarterly testing date through March 31, 2010, MtronPTI will have 45 days from the end of such quarter to cure the default. The Company expects to finalize the amendments with RBC shortly. The Company expects that, with these amendments and based on its current covenant compliance projections, MtronPTI will be in compliance with the RBC Loan Agreement covenants at each quarterly testing date through March 31, 2010.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">All outstanding obligations under the RBC Loan Agreement are collateralized by security interests in the assets of MtronPTI and guaranteed by the Company.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:17.267px">In connection with the RBC Term Loan, MtronPTI entered into a five-year interest rate swap from which it receives periodic payments at the LIBOR Base Rate and makes periodic payments at a fixed rate of 7.51% with monthly settlement and rate reset dates. &nbsp;The Company has designated this swap as a cash flow hedge in accordance with SFAS 133. &nbsp;The fair value of the interest rate swap at March 31, 2009 is ($169,000) net of any tax effect, and is </P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>16</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always">included in &#147;other accrued expenses&#148; on the condensed consolidated balance sheets. &nbsp;The change in fair value is reflected in accumulated other comprehensive loss, net of any tax effect.</P>
<A NAME="_DV_M175"></A><A NAME="_DV_M176"></A><A NAME="_DV_M177"></A><A NAME="_DV_M182"></A><A NAME="_DV_M183"></A><P style="margin:0px"><B>Off-Balance Sheet Arrangements</B> </P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M184"></A><P style="line-height:normal; margin-top:0px; margin-bottom:13.333px; text-indent:24px; font-size:11pt">The Company does not have any off-balance sheet arrangements.<A NAME="_DV_M185"></A><A NAME="_DV_M186"></A><FONT style="font-size:10pt"> </FONT></P>
<A NAME="_DV_M187"></A><A NAME="_DV_M188"></A><A NAME="_DV_M189"></A><A NAME="_DV_M190"></A><A NAME="_DV_M191"></A><A NAME="_DV_M192"></A><A NAME="_DV_M193"></A><A NAME="_DV_M194"></A><A NAME="_DV_M195"></A><A NAME="_DV_M196"></A><A NAME="_DV_M197"></A><P style="margin-top:0px; margin-bottom:-16px"><B>Item 3. &nbsp;</B></P>
<P style="margin:0px; text-indent:48px"><B>Quantitative and Qualitative Disclosures About Market Risk.</B> </P>
<A NAME="_DV_M198"></A><P style="margin-top:13.333px; margin-bottom:13.333px; text-indent:24px">Not applicable.</P>
<A NAME="_DV_M200"></A><P style="margin-top:0px; margin-bottom:-16px"><B>Item 4. &nbsp;</B></P>
<P style="margin:0px; text-indent:48px"><B>Controls and Procedures.</B> </P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M201"></A><P style="margin:0px" align=justify><I>Disclosure Controls and Procedures</I></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px">Disclosure controls and procedures (as defined in Rule 13(a) -15(e)) are controls and other procedures that are designed to ensure that information required to be disclosed by a public company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;) is recorded, processed, summarized and reported within the time periods specified in the SEC&#146;s rules and forms. &nbsp;Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a public company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company&#146;s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures include many aspects of inte
rnal control over financial reporting.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px">Based on their evaluation, the Company&#146;s Chief Executive Officer and Chief Financial Officer have concluded that the Company&#146;s disclosure controls and procedures were not effective at March 31, 2009. &nbsp;The Company did not maintain effective internal control over financial reporting related to information technology applications and infrastructure. &nbsp;Specifically, the Company lacked effective controls in the following areas:</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:72px; text-indent:-24px; font-family:Symbol">&#183;</P>
<P style="margin:0px; padding-left:72px">System and Program Change Management &#150; The Company did not maintain effectively designed controls to ensure that all information technology program and data changes were authorized, developer access to the production environment was limited, and that all program and data changes were adequately tested for accuracy and appropriate implementation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:72px; text-indent:-24px; font-family:Symbol">&#183;</P>
<P style="margin:0px; padding-left:72px">Logical Access to Programs and Data &#150; The Company did not maintain effectively designed controls to prevent unauthorized access to certain programs and data, and allow for periodic review and monitoring of access including reviews of security logs and analysis of segregation of duties conflicts.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><I>Management&#146;s Plans for Remediation of Remaining Material Weakness</I></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px">Management has made significant progress in the implementation of a remediation plan to address the material weaknesses identified as of December 31, 2007. &nbsp;The Company implemented controls and procedures that addressed and corrected the previously reported control deficiencies related to material weaknesses in internal control over financial reporting with respect to inadequate entity-level controls, enterprise-wide risk oversight, financial statement close and reporting process and inventory controls. &nbsp;The primary changes made by the Company were (i) hiring a new Chief Financial Officer and a new Corporate Controller with accounting, internal control and financial reporting expertise, (ii) engaging external consultants to assist in reviewing and assessing our internal controls with regards to their effectiveness with the intent of improving the design and operating effectiveness of the controls and processes in place, (iii) improving the documentation of im
plemented controls and procedures and their respective reviews and approvals, and (iv) regularly identifying and communicating in a timely manner to the responsible personnel across the Company changes to its compliance program and actively following up on their appropriate implementation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>17</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px; page-break-before:always">Since March 31, 2009, the Company has continued to implement process changes to address the remaining material weakness described above. &nbsp;Among other things, the Company has upgraded its servers and other hardware, upgraded its software systems to minimize exposure to unauthorized code changes, and upgraded software regarding security access and protection.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:24px">As of May 12, 2009, the Company has implemented controls and procedures that management believes are sufficient to remediate the remaining material weaknesses identified above. &nbsp;Additionally, the Company is planning to develop and implement a new enterprise resource planning (&#147;ERP&#148;) system solution to further improve its information technology internal controls. &nbsp;The new ERP system will assist management in accumulating, extracting and analyzing data in a more timely and cost-effective manner in making operating decisions.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><I>Changes in Internal Control Over Financial Reporting</I></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Other than the change described above, there were no changes in the Company&#146;s internal controls or in other factors that could significantly affect these controls, during the Company&#146;s first quarter ended March 31, 2009, that have materially affected, or are reasonably likely to materially affect, the Company&#146;s internal control over financial reporting.</P>
<A NAME="_DV_M207"></A><P style="margin-top:0px; margin-bottom:14.667px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>18</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; font-size:11pt; page-break-before:always" align=center><B>PART II</B></P>
<P style="line-height:13pt; margin-top:0px; margin-bottom:14.667px; font-size:11pt" align=center><B>OTHER INFORMATION</B></P>
<A NAME="_DV_M208"></A><P style="margin-top:0px; margin-bottom:-16px"><B>Item 1. &nbsp;</B></P>
<P style="margin:0px; text-indent:96px"><B>Legal Proceedings.</B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M209"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">None</P>
<P style="margin-top:0px; margin-bottom:-16px"><B>Item 1A.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px"><B>Risk Factors.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px"><B><I>The current severe worldwide economic slowdown may negatively affect our sales and the business of our suppliers, which would materially adversely affect our profitability and revenue growth.</I></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Our revenue and profitability depend significantly on general economic conditions and the demand for the electronic components in which our products are used. &nbsp;Economic weakness and constrained spending in the electronics industry may result in severe business downturns or interruptions for our customers. &nbsp;As a result, we may experience decreased revenue and extraordinary price pressure from our customers, negatively affecting our margins and profitability.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Our revenue and profitability also depend on the business of our suppliers. &nbsp;Economic weakness affecting our suppliers may make them unable or unwilling to continue supplying us with components and materials at reasonable prices or at all, requiring us to use additional resources to find alternative sources of components and materials. &nbsp;As a result, we may experience increased expenses, negatively affecting our margins and profitability.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><B><I>We will need to renew or replace our existing credit facilities and may need to raise additional capital in order to fund our operations, which may be especially difficult in the current economic environment.</I></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Our credit facilities include a revolving credit facility that currently terminates on June 30, 2009 and a term loan with an October 1, 2010 maturity date. &nbsp;At May 19, 2009, there was $1,902,000 of indebtedness outstanding under the revolving credit facility and $2,790,000 principal amount of indebtedness under the term loan. &nbsp;We will need to renew or replace such credit facilities as they expire or if they otherwise become unavailable, and we may require additional financing in order to fund our operations. &nbsp;We may be unable to renew our existing credit facilities, find replacement facilities, or obtain additional financing on acceptable terms, or at all, which may result in delays in payments to our vendors and in our ordinary measures to repair, replace or improve upon existing infrastructure, and may cause our customers to lose confidence in our ability to supply high-quality products in a timely manner. </P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Recently, the capital and credit markets have become increasingly tight as a result of adverse economic conditions. &nbsp;If such conditions persist and funds are not readily available, it is likely that our ability to access capital and credit markets will remain limited. &nbsp;In addition, if current global economic conditions persist for an extended period of time or worsen substantially, our business may suffer in a manner that could cause us to fail to satisfy the financial and other restrictive covenants to which we are subject under our existing credit facilities.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">Under certain of our existing credit facilities, we are required to obtain the lenders&#146; consent for most additional debt financing, potentially making it more difficult for us to obtain such financing.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><B><I>We will need to obtain additional waivers under and/or amend the terms of certain of our existing credit facilities in order to permit continuing compliance with the terms of such credit facilities.</I></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">As of March 31, 2009, MtronPTI was not in compliance with certain financial covenants under the FNBO Loan Agreement and the RBC Loan Agreement. &nbsp;We have received waivers from FNBO and RBC with respect to such financial covenants through June 30, 2009. &nbsp;We will need to obtain additional waivers under and/or enter into amendments to the FNBO Loan Agreement and the RBC Loan Agreement in order to permit continuing compliance with the terms of such agreements.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>19</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always"><B><I>We found material weaknesses in our internal control over financial reporting and concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective as of December 31, 2008 and March 31, 2009.</I></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">As disclosed in Part II, Item 9A(T), &#147;Controls and Procedures,&#148; of our Annual Report on Form 10-K for the year ended December 31, 2008, and updated herein in Part I, Item 4, &#147;Controls and Procedures,&#148; of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective as of December 31, 2008 and not effective as of March 31, 2009. &nbsp;Our failure to successfully implement our plans to remediate the material weaknesses discovered could cause us to fail to meet our reporting obligations, to produce timely and reliable financial information, and to effectively prevent fraud. &nbsp;Additionally, such failures could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial co
ndition and stock price. &nbsp;</P>
<A NAME="_DV_M210"></A><P style="margin-top:0px; margin-bottom:-16px"><B>Item 6. &nbsp;&nbsp;&nbsp;</B></P>
<P style="margin:0px; text-indent:96px"><B>Exhibits.</B></P>
<P style="margin:0px" align=justify><BR></P>
<A NAME="_DV_M211"></A><P style="margin:0px"><B>EXHIBIT INDEX</B></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=53.733></TD><TD width=567.4></TD></TR>
<TR><TD valign=bottom width=53.733><P style="line-height:11.4pt; margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Exhibit No.</P>
</TD><TD valign=bottom width=567.4><P style="margin:0px; padding-bottom:4px" align=center><BR></P>
<P style="line-height:11.4pt; margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=center>Description</P>
</TD></TR>
<TR><TD valign=bottom width=53.733><P>&nbsp;</P></TD><TD valign=bottom width=567.4><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=53.733><P style="line-height:11.4pt; margin:0px">31(a)*</P>
</TD><TD valign=bottom width=567.4><P style="line-height:11.4pt; margin:0px">Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
<TR><TD valign=bottom width=53.733><P style="line-height:11.4pt; margin:0px">31(b)*</P>
</TD><TD valign=bottom width=567.4><P style="line-height:11.4pt; margin:0px">Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
<TR><TD valign=bottom width=53.733><P style="line-height:11.4pt; margin:0px">32(a)*</P>
</TD><TD valign=bottom width=567.4><P style="line-height:11.4pt; margin:0px">Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
<TR><TD valign=bottom width=53.733><P style="line-height:11.4pt; margin:0px">32(b)*</P>
</TD><TD valign=bottom width=567.4><P style="line-height:11.4pt; margin:0px">Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=justify><BR></P>
<A NAME="_DV_M212"></A><P style="margin:0px">* filed herewith</P>
<A NAME="_DV_M213"></A><P style="margin:0px">&nbsp;</P>
<A NAME="_DV_M214"></A><P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px">The exhibits listed above have been filed separately with the Securities and Exchange Commission in conjunction with this Quarterly Report on Form 10-Q or have been incorporated by reference into this Quarterly Report on Form 10-Q. Upon request, the Company will furnish to each of its stockholders a copy of any such exhibit. Requests should be addressed to the Office of the Secretary, The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804.</P>
<A NAME="_DV_M215"></A><P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>20</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; page-break-before:always" align=center><B>SIGNATURES</B></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M216"></A><P style="margin:0px; text-indent:24px">Pursuant to the requirements of the Securities<A NAME="_DV_M217"></A> Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=212.8></TD><TD width=106.867></TD><TD width=40.8></TD><TD width=278.867></TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=319.667 colspan=2><P style="margin:0px; padding-left:-7px; text-indent:7px" align=justify>THE LGL GROUP, INC.</P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=319.667 colspan=2><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=319.667 colspan=2><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=212.8><P style="margin:0px" align=justify>Date: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;May 20, 2009</P>
</TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P style="margin:0px" align=justify>BY:</P>
</TD><TD valign=bottom width=278.867><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=justify>/s/ Robert Zylstra</P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P style="margin:0px" align=justify>Robert Zylstra</P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P style="margin:0px" align=justify>President and Chief Executive Officer</P>
<P style="margin:0px" align=justify>(Principal Executive Officer) </P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P>&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=212.8><P style="margin:0px" align=justify>Date: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;May 20, 2009</P>
</TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P style="margin:0px" align=justify>BY:</P>
</TD><TD valign=bottom width=278.867><P style="margin:0px; padding-bottom:4px; border-bottom:1px solid #000000" align=justify>/s/ Harold D. Castle</P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P style="margin:0px" align=justify>Harold D. Castle</P>
</TD></TR>
<TR><TD valign=bottom width=212.8><P>&nbsp;</P></TD><TD valign=bottom width=106.867><P>&nbsp;</P></TD><TD valign=bottom width=40.8><P>&nbsp;</P></TD><TD valign=bottom width=278.867><P style="margin:0px" align=justify>Chief Financial Officer</P>
<P style="margin:0px" align=justify>(Principal Financial Officer) </P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<A NAME="_DV_M218"></A><A NAME="_DV_M228"></A><P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px; padding-right:24px" align=center>21</P>
<P style="margin:0px" align=justify><BR></P>
</DIV></BODY>
<!-- EDGAR Validation Code: 0F1DB78E -->
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>q12009exhibit32b.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 32(b)</TITLE>
<META NAME="author" CONTENT="Neal Renuart">
<META NAME="date" CONTENT="04/21/2009">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<DIV style="width:576px"><P style="line-height:11pt; margin:0px; font-size:9pt" align=right>EXHIBIT 32(b)</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER</P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; text-indent:61.067px; font-size:9pt">In connection with the quarterly report of The LGL Group, Inc., (the &#147;Company&#148;) on Form 10-Q for the quarterly period ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Harold D. Castle, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:48px; text-indent:-24px; font-size:9pt">1.</P>
<P style="line-height:11pt; margin:0px; padding-left:48px; font-size:9pt">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:48px; text-indent:-24px; font-size:9pt">2.</P>
<P style="line-height:11pt; margin:0px; padding-left:48px; font-size:9pt">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=319.2></TD><TD width=18.467></TD><TD width=60></TD><TD width=240.733></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:11pt; margin:0px; font-size:9pt">May 20, 2009</P>
</TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=300.733 colspan=2><P style="line-height:11pt; margin:0px; font-size:9pt">/s/ Harold D. Castle</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Name:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Harold D. Castle</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Title:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Chief Financial Officer</P>
<P style="line-height:11pt; margin:0px; font-size:9pt">(Principal Financial Officer)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
</DIV></BODY>
<!-- EDGAR Validation Code: 4C44DC99 -->
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>q12009exhibit31a.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 31(a)</TITLE>
<META NAME="author" CONTENT="Neal Renuart">
<META NAME="date" CONTENT="04/21/2009">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<DIV style="width:576px"><P style="line-height:11pt; margin:0px; font-size:9pt" align=right>EXHIBIT 31(a)</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER </P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt">I, Robert Zylstra, certify that:</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">1.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended March 31, 2009;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">2.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">3.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">4.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(a)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(b)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(c)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(d)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; text-indent:-4px; font-size:9pt">&nbsp;Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">5.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(a)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(b)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=319.2></TD><TD width=18.467></TD><TD width=60></TD><TD width=240.733></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:11pt; margin:0px; font-size:9pt">May 20, 2009</P>
</TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=300.733 colspan=2><P style="line-height:11pt; margin:0px; font-size:9pt">/s/ Robert Zylstra</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Name:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Robert Zylstra</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Title:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">President and Chief Executive Officer</P>
<P style="line-height:11pt; margin:0px; font-size:9pt">(Principal Executive Officer)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
</DIV></BODY>
<!-- EDGAR Validation Code: 41988A5A -->
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>q12009exhibit31b.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 31(b)</TITLE>
<META NAME="author" CONTENT="Neal Renuart">
<META NAME="date" CONTENT="04/21/2009">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<DIV style="width:576px"><P style="line-height:11pt; margin:0px; font-size:9pt" align=right>EXHIBIT 31(b)</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER </P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt">I, Harold D. Castle, certify that:</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">1.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">I have reviewed this quarterly report on Form 10-Q of The LGL Group, Inc. for the quarterly period ended March 31, 2009;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">2.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">3.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">4.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(a)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(b)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(c)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(d)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; text-indent:-4px; font-size:9pt">&nbsp;Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:34px; text-indent:-24px; font-size:9pt">5.</P>
<P style="line-height:11pt; margin:0px; padding-left:34px; font-size:9pt">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(a)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:82px; text-indent:-24px; font-size:9pt">(b)</P>
<P style="line-height:11pt; margin:0px; padding-left:82px; font-size:9pt">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=319.2></TD><TD width=18.467></TD><TD width=60></TD><TD width=240.733></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:11pt; margin:0px; font-size:9pt">May 20, 2009</P>
</TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=300.733 colspan=2><P style="line-height:11pt; margin:0px; font-size:9pt">/s/ Harold D. Castle</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Name:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Harold D. Castle</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Title:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Chief Financial Officer</P>
<P style="line-height:11pt; margin:0px; font-size:9pt">(Principal Financial Officer)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
</DIV></BODY>
<!-- EDGAR Validation Code: 3BEAAE52 -->
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>q12009exhibit32a.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 32(a)</TITLE>
<META NAME="author" CONTENT="Neal Renuart">
<META NAME="date" CONTENT="04/21/2009">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<DIV style="width:576px"><P style="line-height:11pt; margin:0px; font-size:9pt" align=right>EXHIBIT 32(a)</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER</P>
<P style="line-height:11pt; margin:0px; font-size:9pt" align=center>PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</P>
<P style="margin:0px"><BR></P>
<P style="line-height:11pt; margin:0px; text-indent:61.067px; font-size:9pt">In connection with the quarterly report of The LGL Group, Inc., (the &#147;Company&#148;) on Form 10-Q for the quarterly period ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, Robert Zylstra, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:48px; text-indent:-24px; font-size:9pt">1.</P>
<P style="line-height:11pt; margin:0px; padding-left:48px; font-size:9pt">The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:11pt; margin-top:0px; margin-bottom:-14.667px; padding-left:48px; text-indent:-24px; font-size:9pt">2.</P>
<P style="line-height:11pt; margin:0px; padding-left:48px; font-size:9pt">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR height=0 style="font-size:0"><TD width=319.2></TD><TD width=18.467></TD><TD width=60></TD><TD width=240.733></TD></TR>
<TR><TD valign=top width=319.2><P style="line-height:11pt; margin:0px; font-size:9pt">May 20, 2009</P>
</TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=300.733 colspan=2><P style="line-height:11pt; margin:0px; font-size:9pt">/s/ Robert Zylstra</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Name:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">Robert Zylstra</P>
</TD></TR>
<TR><TD valign=top width=319.2><P>&nbsp;</P></TD><TD valign=top width=18.467><P>&nbsp;</P></TD><TD valign=top width=60><P style="line-height:11pt; margin:0px; font-size:9pt">Title:</P>
</TD><TD valign=top width=240.733><P style="line-height:11pt; margin:0px; font-size:9pt">President and Chief Executive Officer</P>
<P style="line-height:11pt; margin:0px; font-size:9pt">(Principal Executive Officer)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
</DIV></BODY>
<!-- EDGAR Validation Code: 51F2B8A1 -->
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
