10-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

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Form 10-K

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þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934 

For the fiscal year ended March 31, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934 

For the transition period ___________ to ___________

Commission file number 0-13763

TECHNOLOGY RESEARCH CORPORATION

(Exact name of Registrant as specified in its charter)

FLORIDA	59-2095002
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5250-140th Avenue North 

Clearwater, Florida 33760

(Address of principal executive offices)

(727) 535-0572

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, Par Value $.51 Per Share

(Title of Class) 

 Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:  Yes o  No þ

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

 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 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ   No o

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

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

 Large accelerated filer o  Accelerated filer o  Non-accelerated filer o Smaller reporting company filer þ

    Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 or the Act).  Yes o  No þ

    The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, as of September 28, 2007, was $20,191,983 based upon the $3.74 closing sale price for the Registrant's Common Stock as reported on the NASDAQ Stock Market System on such date.  We have excluded shares of voting and non-voting stock held by executive officers, directors and holders of more than 5% of our common stock from this calculation because such persons or institutions may be deemed affiliates.  This determination of affiliate status is not necessarily a conclusive determination of such status for other purposes.

    As of May 30, 2008, there were 5,890,828 shares of the Registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the Registrant's definitive proxy statement related to its 2008 Annual Meeting of Stockholders to be held on August 27, 2008  are incorporated by reference into Part III of this Form 10-K.

TECHNOLOGY RESEARCH CORPORATION 

FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS 

PART I
	Item 1.     Business
	Item 1A.  Risk Factors
	Item 1B.  Unresolved Staff Comments
	Item 2.     Properties
	Item 3.     Legal Proceedings
	Item 4.     Submission of Matters to a Vote of Security Holders
	Item 4A.   Executive Officers of Registrant
PART II
	Item 5.     Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
	Item 6.     Selected Financial Data
	Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
	Item 8.     Financial Statements and Supplementary Data
	Item 9.     Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
	Item 9A.  Controls and Procedures
	Item 9B.  Other Information
PART III
	Item 10.   Directors, Executive Officers, and Corporate Governance
	Item 11.   Executive Compensation
	Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13.   Certain Relationships, Related Transactions, and Director Independence
	Item 14.   Principal Accounting Fees and Services
PART IV
	Item 15.   Exhibits, Financial Statement Schedules
SIGNATURES
Exhibit 21— Subsidiaries of Technology Research Corporation
Exhibit 23 — Consent of Independent Registered Public Accounting Firm
Exhibit 31.1 — Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 — Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 — Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 — Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002

 As used in this Annual Report on Form 10-K, “we”, “our”, “us”, the “Company” and “TRC” all refer to Technology Research Corporation and its subsidiary unless the context otherwise requires.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934, and any forward looking statements made herein are based on our current expectations, involve a number of risks and uncertainties and should not be considered as guarantees of future performance.  Such statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “scheduled,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “potential,” or “continue,” or the negative of such terms, or other comparable terminology.  These statements are only predictions, and actual events as well as results may differ materially.  

 In evaluating these statements, you should specifically consider the information described in the “Risk Factors” and other documents we file from time to time with the Securities and Exchange Commission such as our quarterly reports on Form 10-Q and our current reports on Form 8-K. Other key factors include, but are not limited to, the acceptance of any new products, such as Fire Shield®, the effective utilization of our Honduran manufacturing facility and Far East contract manufacturers, changes in manufacturing efficiencies, the impact of competitive products and pricing and interruptions of or cancellation of existing orders or contracts.  We cannot provide any assurance that predicted future results, levels of activity, performance or goals will be achieved, and we disclaim any obligation to revise any forward-looking statements subsequent to events or circumstances or the occurrence of unanticipated events.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and of information currently and reasonably known.  All references to fiscal years apply to our fiscal years, which ended March 31, 2008, March 31, 2007 and March 31, 2006.

PART I

ITEM 1.  BUSINESS

OVERVIEW

    Technology Research Corporation is an internationally recognized leader in the design, manufacture and marketing of electrical safety products that save lives, protect people against serious injury from electrical shock and/or prevent electrical fires in the home and workplace.  Based on our core technology in ground fault sensing and leakage current detection, our products are designed to meet the needs of the consumer, commercial and industrial markets worldwide.  TRC also designs and supplies power monitoring and control equipment to the United States military and its prime contractors for its tactical vehicles, naval vessels and mobile electric generators.

    TRC was incorporated in Florida in 1981.  Our principal offices are located at 5250-140th Avenue North, Clearwater, Florida 33760, our telephone number is (727) 535-0572 and our website can be accessed at www.trci.net.  Information contained or referenced on our website is not incorporated by reference into, and does not form a part of, this Annual Report on Form 10-K.

 Our operating strategy is to grow revenue and improve gross margin in our military, recreational vehicle, industrial and consumer markets as well as closely aligned markets if they share similar products or have other synergies.  We plan to achieve these growth goals through internal development of new products, acquisitions, strategic partnerships and licensing.  We have undertaken a number of initiatives to lower cost, improve asset turnover and reduce our risk.  These initiatives include, but are not limited to, product line simplification, establishing product platforms in design, greater utilization of our operations in Honduras, utilizing new designs and operations software to improve quality, accelerate product development and reduce the cost of redesigned products.

 We plan to pursue our operating strategy; however, actual results could differ materially from those projected or assumed in any of our forward-looking statements within this report.  Our future financial condition and results of operations, as well as our operational and financial expectations, are subject to inherent risks and uncertainties.  Some, but not all, of the factors impacting these risks and uncertainties are set forth below in the section entitled “Risk Factors.”

    We file reports with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.  Copies of our reports filed with the SEC may be obtained by the public at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330.  The information provided on our website is not part of this report, and is therefore not incorporated by reference unless such information is otherwise specifically referenced elsewhere in this report.

GENERAL

 We make available free of charge through our website at www.trci.net, via a link to the SEC’s website at www.sec.gov, our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC. You may also obtain free copies of these materials by contacting our Chief Financial Officer, Barry H. Black, at our mailing address of 5250 - 140th Avenue North, Clearwater, Florida 33760, telephone (727) 535-0572.

 Revenues (in thousands) contributed by commercial and military products and royalties from license agreements are as follows:

Year ended March 31,		Commercial	%		Military	%		Royalties	%		Total
2008	$	22,680	61.0	$	14,152	38.1	$	328	0.9	$	37,160
2007		26,471	69.7		11,521	30.3		-	0.0		37,992
2006		32,250	70.7		13,370	29.3		-	0.0		45,620
2005		27,022	68.5		12,269	31.1		142	0.4		39,433
2004		11,942	49.1		12,304	50.6		91	0.3		24,337

 Our backlog of unshipped orders as of March 31, 2008 was approximately $8.6 million, as compared to approximately $9.4 million as of March 31, 2007.  This backlog consists of approximately 43% of commercial product orders and approximately 57% of military product orders, all of which are expected to ship within the year ended March 31, 2009.  Our unshipped backlog orders include orders for products where written customer requests have been accepted and the delivery of products is anticipated within the next 12 months.  Our policy is to make adjustments to our backlog to reflect, among other things, customer delivery date changes as well as order cancellations.  We schedule production based upon purchase orders in backlog and our customer’s delivery requirements.  Generally, our orders may be changed, rescheduled or cancelled with limited penalties prior to shipment.  For these reasons, our backlog at any particular date is not necessarily indicative of future sales for any succeeding period.

Commercial Products and Markets

 Core Commercial Products.  Our core commercial business was developed out of the demand for the following Underwriters Laboratories (“UL”) classifications of ground fault protective devices:  Ground Fault Circuit Interrupters (“GFCI”); Equipment Leakage Current Interrupters (“ELCI”); Portable Residual Current Devices (“PRCD”); and Leakage Current Detection Interrupters (“LCDI”). 

 Ground fault protective devices help protect against the hazards of fire and electrical shock that result when water comes in contact with electrically “live” conductors or when faulty electrical grounding is found in old or damaged extension cords, appliance cords, house wiring and electrical equipment.  The demand for our commercial products has resulted from the National Electrical Code (“NEC”) requirements, UL product standards and voluntary efforts by industry to improve the electrical safety of commercial products.

 Electrical safety is compromised when a ground fault occurs, which is a condition where electric current finds an abnormal path to ground, such as when a power tool comes in contact with water while plugged into a live outlet or when it is damaged in such a way as to cause internal wiring to come in contact with exposed metal parts allowing electricity to pass through the user of that power tool.  Upon such occurrence, the entire device can become as electrically alive as the power line to which it is attached.  If a person is touching such a live device while grounded (by being in contact with the ground or, for example, a metal pipe, gas pipe, drain or any attached metal device), that person can be seriously or fatally injured by electric shock.  Fuses or circuit breakers do not provide adequate protection against such shock, because the amount of current necessary to injure or kill a human or animal is far below the level of current required for a fuse to blow or a circuit breaker to trip.

 Our GFCI, ELCI and PRCD are all ground fault devices providing protection from dangerous electrical shock by sensing leakage of electricity and cutting off power.  Ground fault devices are currently available in three types: circuit breaker, receptacle and portable.  We specialize in the portable types of these products.  Ground fault devices constantly monitor electric current, and as long as the amount of current returning from the device is equal to the amount that is directed to the device, the GFCI performs no activities.  Conversely, if there is less current coming back than there is flowing into the device, some portion must be taking a path through a foreign body, thereby creating a hazard.  Upon recognizing that condition, the ground fault device terminates the flow of electricity instantaneously.  Ground fault devices range in rating from 120V/15A to 600V/80A (the largest are from our unique HD-PRO family of products).  These devices have various consumer, commercial and military applications.

 Our LCDI devices are intended to reduce the risk of electrical fires by disconnecting power when sensing current leakage between conductors of power cords.  Our Fire Shield® product lines are approved in the UL classification of LCDIs.  Several years ago, both government and industry research into the major causes of fire led to a search for new, cost-effective methods to prevent electrical fires.  In response to this need, we developed and patented Fire Shield®, a product designed to prevent fires caused by damaged or aging appliance power supply cords and extension cords, which have been identified as a leading cause of electrical fires.

 Recent statistics compiled by the Consumer Products Safety Commission (“CPSC”) indicate that extension cords, power strips, toaster/toaster ovens, power cords on appliances and household wiring are responsible for over $450 million in residential fire damage, 180 lives lost and 950 injuries.  We believe that our Fire Shield® technology will continue to advance as a valued technology for electrical safety and fire protection in the OEM and consumer marketplaces.   

 Our Fire Shield® technology currently addresses four distinct market applications: (i) the Fire Shield® Power Surge Strip - a consumer product; (ii) the Fire Shield® Safety Circuit - an OEM product; (iii) the Fire Shield® Power Cord - an OEM product; and (iv) the Fire Shield® Safety Extension Cord - a consumer product.

 We will continue to sell the finished good products to the consumer and institutional markets.  Total sales for the Room Air Conditioner market were lower in fiscal 2008 as a result of shifting our focus to a limited number of customers and exploring opportunities for licensing our intellectual property to service the market.  For fiscal 2009, we expect to see further declines in our Room Air Conditioner market as we continue our efforts to focus on a limited number of customers.

 Our line of Surge Guard™ and Surge Guard Plus™ products are designed to meet the rigorous requirements of the recreational vehicle (“RV”) market.  These products provide power protection and have both OEM and after-market applications.  In addition, we developed the Surge Guard Automatic Transfer Switch, which incorporates a transfer switch into the functionality of the Surge Guard products, thus eliminating the need for two separate products. 

 In April 2006, we announced the consummation of an asset purchase agreement with Automated Engineering Corporation (AEC), a manufacturer of electrical safety and communications equipment for the RV market.  The acquisition complemented our existing RV business by allowing us to offer electrical safety solutions to a broader range of RV manufacturers.  

Cable Protection and Management Products

 Our line of Cable Protection and Management products, including Yellow Jacket and Black Jacket Cable Protectors, Electriduct Cable Protectors, Erig Cable Management and Drag Strip Connector Protectors are designed to meet the rigorous requirements of commercial/industrial and institutional markets.  These products provide protection for electrical, fluid and telecommunication cables.

Research, Development and Engineering

 We place substantial emphasis on new product development and believe that continued investment in product development is required to maintain and improve our competitive position.  Our product development activities emphasize new proprietary products, enhancement of existing products and process technologies.  Our research and development and product development activities occur in Clearwater, Florida.  Our Engineering Department is engaged in designing and developing new commercial and military products and improving existing products to meet the needs of our customers.

    In connection with our efforts to develop new products, we have directed our focus on “Engineer to Engineer” type solutions.  What this means is that we are working on long term type contracts where we supply our technology to other OEMs for the equipment they manufacture.  The OEM equipment can be for commercial or industrial situations, but is application specific in nature.  In addition to these applications, we are enhancing our line of Recreational Vehicle (RV) type products to include more sophisticated devices through new and existing channels.

    We spent $1.9 million in fiscal 2008 and $2.0 million in each of fiscal 2007 and 2006 on research, development and engineering activities, and we anticipate spending levels at approximately 6% of revenues in fiscal 2009.  All engineering activities are expensed as incurred.

Marketing, Sales and Distribution

 Our products are sold throughout the world, primarily through an in-house sales force, through product licensing agreements and sales and marketing agreements.  We will continue to market existing and new products through these channels.  In addition, we are looking for other viable channels through which to market our products.  We rely heavily upon the marketing skills and experience, as well as the business experience, of our management personnel in marketing our products.

 We complement our sales and marketing activities through the use of additional distributors and sales representative organizations.   Our sales efforts in the industrial/construction market is supported by utilizing approximately 30 independent sales representatives who sell to over 1,500 electrical, industrial and safety distributors.  The majority of our sales, however, are made through our in-house sales force.  We exhibit our products at numerous trade shows, which have resulted in new commercial markets including the recreational vehicle industry and the appliance industry.

 We also market through OEMs, both domestically and internationally, that sell our products as a component of an end user product or under their own brand names (“private label”).  We continue to implement a “value add” upgrade strategy, which provides a finished product to those who private label our products and who are currently only receiving subassembly modules.  Our plastic and receptacle molding capabilities are a key factor in providing “value add” upgrades to our customers.

 Commercial/Industrial Markets.  We market and sell our GFCI, ELCI (including the heavy duty HD-PRO products), LCDI and our cable protection and management products to the commercial/industrial market.  This market is served through over 1,500 electrical and safety distributors and a number of catalogers. We also private label products for a number of industry leaders to help penetrate this market.

 Consumer/Retail Markets. We currently market and sell various portable GFCI, LCDI and other specialty products to the consumer market.  We have placed some products with major retailers, primarily Wal-Mart, Home Depot, Meijers, Fry’s Electronics and Ace Hardware, as well as with many independent retailers.  Our products are also being offered through magazines, catalogs and E-commerce retailers such as Amazon.com.  We continue to have success selling our aftermarket RV Surge Guard products through retailers such as Camping World and distributors.

 In fiscal 2008, we continued our growth and marketing in niche markets such as in the college and university segment of the consumer market with our Fire Shield® LCDI products.  A number of colleges and universities are either mandating, or strongly suggesting the use of LCDI protected extension cords and surge strips on campus.

 Original Equipment Manufacturers (OEMs).  We also sell products to OEMs, both domestically and internationally, that sell our products as a component of an end user product. We primarily sell GFCI, ELCI, LCDI and RV Surge Guard and Surge Guard Plus products to this market. The OEM market can also be significantly impacted by new and revised product standards as outlined below:

 Impact of New and Revised Product Standards.  The NEC requires ground fault protection on many applications, which are enforced by OSHA and local government building codes and adhered to by most manufacturers.  We presently focus our marketing efforts in certain spot markets, which have developed in response to NEC imposed requirements.  The NEC requirements are often incorporated into UL product standards.

 In July 2001, a requirement was added to the NEC for cord fire prevention on room air conditioners.  Because of this change in the NEC, UL Standard 484 for room air conditioners was revised to reflect this change and became effective in August 2005.  This requires that room air conditioners be provided with either LDCI or Arc Fault Circuit Interrupter (“AFCI”) protected cord sets by their manufacturers.  We believe that our Fire Shield® cord set will provide manufacturers of room air conditioners with the best solution for this requirement.

 In addition, Article 625 of the NEC requires electric vehicle (“EV”) charging systems to include a system that will protect people against serious electric shock in the event of a ground fault.  We have shipped product to the majority of the major automobile manufacturers in support of their small EV production builds, and we are actively involved with various standards and safety bodies, relating to the electric vehicle, on a worldwide basis.  Sales for our EV safety products remain relatively low due to the small number of electric vehicles produced.  Improvements in battery technology along with mandates from individual states for zero emission vehicles, will determine whether this will be a viable market in the future.

 A requirement was added to the NEC to take effect on January 1, 2005 for GFCI protection on all electrically operated vending machines.  In response to the change in the code, UL has changed their standards to require GFCI protection on all electrically operated vending machines.  The effective date was April 1, 2007.  We have received orders and have begun delivery for the vending machine market.

 License Agreements.  From time to time, we enter into license and sales and marketing agreements concerning our portable GFCI, ELCI and LCDIs products.  These agreements are intended to assist our market penetration into those areas where it would be difficult for us to compete on a direct basis.

Military Products and Markets

 We design and manufacture products for sale to the military engine generator set controls market.  Our expertise in this area is well known, and our performance in product quality and delivery to the United States military and its prime contractors have resulted in our being recognized as a leader in this industry.  The Defense Logistics Agency established a program rating system for its suppliers in 1995 for product quality, packaging and on-time deliveries, and since its inception and for the thirteenth straight year, we have been honored as a Best Value Medalist for the highest rating Gold Category, which signifies our commitment to military contract performance.

 We are currently a supplier of control equipment used in engine generator systems purchased by the United States military and its prime contractors.  The term “control equipment” refers to the electrical controls used to control the electrical power output of the generating systems.  In general, the controls monitor and regulate the operation of engine generator mobile electric generating system sets.  Electric generating systems are basic to all branches of the military, and demand is generally less volatile than products utilized in armaments and missiles.  Sales are made either directly to the government for support parts or to prime contractors for new production electric generator sets which incorporate our products.  We are a qualified supplier for more than 50 control equipment products as required by the Department of Defense and serve as a supplier of the following types of control equipment, among others: protective relays and relay assemblies, instrumentation transducer controls, fault locating panel indicators, current and power transformer assemblies for current sensing control and instrumentation, motor operated circuit breaker assemblies and electrical load board and voltage change board assemblies.  These products are also furnished for spare parts support for existent systems in the military inventory.

 In 1989, we completed the redesign of the control equipment related to the 5/10/15/30/60KW Tactical Quiet Generator (“TQG”) Systems programs.  We are actively supplying these parts to DRS Technologies, Inc. (“DRS”) and L-3 Communications Inc., who are the prime contractors.  In addition, we are also supplying to DRS control equipment related to the 3KW and the 100-200KW TQG systems program which first began in November 1998.  Sales to DRS were $7.0 million in both fiscal 2008 and fiscal 2007 and $6.4 million in fiscal 2006.  We also supply products for maintenance and spare parts support directly to the U.S. military.  Direct U.S. military sales, which include these products and those mentioned below increased from $3.6 million in fiscal 2007 to $6.4 million in fiscal 2008, an increase of 78%, while they declined from $6.1 million in fiscal 2006 to $3.6 million in fiscal 2007, a decrease of 41%.  Military revenues, other than to DRS and direct sales to the U.S. military, were $.8 million in fiscal 2008, down from $.9 million in fiscal 2007, a decrease of 11%, while they were unchanged at $.8 million between fiscal 2006 and fiscal 2007.

 We furnish various types of A.C. power voltage and frequency monitors to the military for its U.S. Navy vessels.  These monitors provide system protection for the 400 Hz. electrical distribution systems that are used on all classes of U.S. Navy surface vessels, such as minesweepers, destroyers, guided missile cruisers and aircraft carriers in addition to other types of naval vessels.  The monitors meet the environmental and stringent U.S. Navy high shock, vibration and endurance testing requirements, and they are furnished for new vessel production, retrofit upgrades and existing vessel replacement parts support.

 In addition, we provide both A.C. and D.C. power monitoring systems, which include voltage regulators, power transformers, A.C. over current and short circuit protection monitor assemblies and current sensing transformers for the military's armored-tracked vehicles.  These products must pass highly accelerated stress screening and vehicle road testing at the Aberdeen Proving Grounds of the United States Department of Defense.

 Our panel mount GFCI is the only GFCI device that is approved and qualified by the Department of Defense for use on its mobile-tactical generating systems.

 Our contracts with the U.S. Government are on a fixed-price bid basis.  As with all fixed-price contracts, whether government or commercial, we may not be able to negotiate higher prices to cover losses should unexpected manufacturing costs be incurred.

 All government contracts contain a provision that allows for cancellation by the government “for convenience.”  However, the government must pay for costs incurred and a percentage of profits expected if a contract is canceled. 

Testing and Qualification

 A number of our commercial products must be tested and approved by UL or an approved testing laboratory.  UL publishes certain “Standards of Safety” which various types of products must meet and requires that specific tests be undertaken to ascertain whether the products meet the prescribed standards.  If a product passes these tests, it receives UL approval.  Once our products have been initially tested and qualified by UL, they are subject to regular field checks and quarterly reviews and evaluations.  UL may withdraw its approval for such products if they fail to pass these tests and if prompt corrective action is not taken.  Our portable electrical safety products have received UL approval.  In addition, certain of our portable GFCI and ELCI products have successfully undergone similar testing procedures conducted by comparable governmental testing facilities in Europe, Canada and Japan.

 Our military products are subject to testing and qualification standards imposed by the U. S. Government.  We have established a quality control system, which has been qualified by the United States Department of Defense to operate under the requirements of a particular specification (MIL-I-45208).  To the extent we design a product that we believe meets those specifications, we submit the product to the responsible government-testing laboratory.  Upon issue of the qualification approval and source listing, the product is rarely subject to re-qualification; however, the U. S. Government may disqualify a product if it is subject to frequent or excessive operational failures.  In addition, our governmental contracts provide that the current specifications and requirements could be changed at any time, which could require us to redesign our existing products or to develop new products which would have to be submitted for testing and qualification prior to their approval for purchase by the military or its prime contractors.  Certain contracts also require witness testing and acceptance by government inspectors prior to shipment of the product.

 Our wholly-owned foreign subsidiary, TRC/Honduras S.A. de C.V., is an ISO 9000:2000 certified manufacturing facility and an approved supplier to several major corporations, and holds UL, Canadian Standards Association (“CSA”) and the German standards association, Verband Deutsher Elektrotechniker (“VDE”), approvals.

Environmental Regulations

 Our operations involve the use of hazardous and toxic materials and are subject to federal, state and local laws governing the use, storage and handling of such materials.  We fall under the Conditionally Exempt Small Quantity Generators Rule as defined by the Environmental Protection Agency (“EPA”) due to the small amounts of hazardous waste that we generate each year, and the cost of disposing such materials is not material to our financial condition, results of operations or cash flows.  We believe that we are in general compliance with these regulations and that we have obtained all necessary permits to operate our business.

Design and Manufacturing

 We currently design almost all of the products that we produce and generally will not undertake special design work for customers unless we receive a contract or purchase order to produce the resulting products.  A significant number of our commercial and military electronic products are specialized in that they combine both electronic and magnetic features in design and production.

 The business of an electronics manufacturer primarily involves assembly of component parts.   We mold most of our own plastic parts for our commercial product lines at our manufacturing facility in Honduras.  The remainder of the products that we manufacture is assembled from component parts that are produced or distributed by other companies.

 Our wholly-owned subsidiary, TRC/Honduras, S.A. de C.V., manufactures most of our high-volume products sold in the U.S.  TRC/Honduras, S.A. de C.V. leases 47,000 square feet of property which is located in ZIP San Jose, a free trade zone and industrial park, located in San Pedro Sula, Honduras.  The benefits of being located in a free trade zone include no Honduran duties on imported raw materials or equipment, no sales or export tax on exported finished product, no federal income tax for any profits generated by the subsidiary, and various other benefits.

 We utilize our Honduran subsidiary and Asian contract manufacturers to provide quality products to customers at our most competitive prices.

 We continue to manufacture our military products and distribute certain of our commercial products, which are manufactured off-shore, through our 43,000 square foot facility in Clearwater, Florida.

Patents and Trademarks

 Our policy is to seek patents on inventions relating to new or enhanced products and processes developed as part of our ongoing research, engineering, manufacturing and support activities.  We seek to protect our products and technologies primarily through patents, trade secrecy measures, copyrights, trademark registrations, licensing restrictions, confidentiality agreements and other contractual arrangements that are designed to protect our proprietary information.  No assurances can be given that others will not independently develop competitive technology that is not covered by our intellectual property rights or that any measures that we take to protect our proprietary products will be effective. We currently own and hold patents in the U.S. and in several other countries throughout the world related to our Fire Shield® technologies.  We have also filed other patent applications and are awaiting action on those applications.  Our U.S. patents are valid for either 20 years from filing or 17 years from date of issue in the United States.  The term of our patents in all other countries vary from 15 to 20 years.  There can be no assurance that pending patent applications or other application that may be filed will result in issued patents, or that any issued patents will survive challenges to their validity.

 The lives of certain patents, related to our GFCI devices, have expired, and others will expire within the next few years which could   affect our business in certain markets.  We believe that the success of our business depends on our technical and engineering expertise, and marketing and service abilities of our employees.  We vigorously protect our patents, but there can be no assurance that others will not independently develop similar products, duplicate our products or design around the patents issued to us or that foreign intellectual property laws will protect our intellectual property rights in any foreign country. 

 We have registered our TRC® trademark with the U.S. Patent and Trademark Office.  Our Shock Shield®, Electra Shield® and Fire Shield® brand names are also our registered trademarks.

 Patent and other proprietary rights infringement claims are common in our industry.  Our industry is commonly exposed to claims and litigation involving patent and other intellectual property rights, including claims for indemnification arising out of contractual arrangements with customers.  Litigation is often necessary to enforce patent rights or other intellectual property rights.

 On January 3, 2007, we announced that Technology Research Corporation and Tower Manufacturing Corporation had settled, on mutually agreeable terms, their civil actions, filed in the United States District Court for the Middle District of Florida and the United States District Court for the District of Rhode Island, respectively.  Under the terms of the settlement, both cases were dismissed and royalty-bearing cross licensing arrangements have been entered into under Tower’s 5,943,199 patent and TRC’s 6,292,337 patent, with the net effect for each party’s past sales resulting in TRC receiving $3.2 million paid over a two year period. 

 On April 11, 2007, we announced that we had asserted a counterclaim in the U.S. District Court for the Central District of California against Shanghai ELE Manufacturing Corporation ("Shanghai ELE") for infringement of our U.S. Patent No. 6,292,337 ("the '337 patent").  The '337 patent underlies our Fire Shield® technology for cord fire prevention.  The counterclaim asserts that Shanghai ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe the '337 patent and seeks monetary damages against Shanghai ELE for past infringement of the '337 patent.  The counterclaim also asks the Court to permanently enjoin Shanghai ELE from future infringement of the '337 patent.  On February 16, 2007, Shanghai ELE Manufacturing Corporation ("ELE") filed a lawsuit against TRC in the Central District of California alleging that TRC's United States Patent No. 6,292,337 is invalid and not infringed by ELE. TRC filed a counterclaim alleging that the patent is valid and is infringed by ELE. The '337 patent covers TRC's FireShield technology for the prevention of power cord fires.  In addition, TRC filed a motion to transfer the action to the United States District Court for the Middle District of Florida, where TRC is headquartered.  On May 18, 2007, Judge R. Gary Klausner granted TRC's motion and transferred the action to the Middle District of Florida.  TRC intends to vigorously pursue its claim of patent infringement against ELE in this new venue.

 We had previously written a letter to Shanghai ELE requesting that they cease all infringing activity relating to the '337 patent.  In response, Shanghai ELE filed a declaratory judgment action against us in the U.S. District Court for the Central District of California, seeking a declaration that it does not infringe and that the patent is invalid.  We filed our Answer and Counterclaim in the action, stating that the '337 patent is valid and asserting our infringement counterclaim against Shanghai ELE.

Major Customers and Exports

 Significant customers who accounted for 10% or more of our revenues, and aggregate exports were:

		Years ended March 31,
		(In thousands)
Customer		2008	2007	2006
U.S. Military (direct sales)	$	6,400	3,623	6,110
DRS Technologies, Inc., a U.S. Government Prime Contractor		6,986	7,000	6,425
Total revenues for major customers	$	13,386	10,623	12,535
Exports:
Africa	$	1	2	-
Australia		1	9	1
Canada		62	243	24
Europe		1,921	2,866	2,080
Far East		2,189	5,146	10,598
Mexico		526	639	556
Middle East		17	29	3
South America		13	22	583
Total exports	$	4,730	8,956	13,845

 Our military product sales are primarily to military procurement logistic agencies for field service support on previously shipped military equipment and to OEM prime contractors of electric generators.  In fiscal 2008, military revenues were approximately 38% of total revenues, compared to approximately 30% in fiscal 2007 and 29% in fiscal 2006.  In fiscal 2008 year to year direct sales to the U.S. military increased approximately 77%, sales to DRS were approximately the same in fiscal 2008 as fiscal 2007, and overall, military revenues increased approximately 23% from fiscal 2007 to fiscal 2008.  When comparing fiscal 2007 with fiscal 2006, direct sales to the U.S. military were down approximately 41%, sales to DRS were up approximately 9%, and overall, military revenues were down approximately 15%.  Direct U.S. military revenues accounted for approximately 17% of our total revenues while DRS accounted for approximately 19% of our total revenues for fiscal 2008, as compared to approximately 10% and 18%, respectively, for fiscal 2007, and approximately 13% and 14%, respectively, for fiscal 2006.

 Our exports were down 47% in fiscal 2008, as compared to the prior year, primarily due to lower RAC product shipments to customers located in the Far East.

 We offer our customers no specific product liability protection except with regard to those customers that are specifically named as “Broad Form Vendors” under our product liability coverage.  We do extend protection to purchasers in the event there is a claimed patent infringement that pertains to our portion of the final product that is purchased.  We also carry product and general liability insurance for protection in such cases.

Competition

 Our commercial and military business is highly competitive.

 In the commercial market, we have significant competition.  As a result, we may not be able to maintain current profit margins due to price erosion.  We believe, however, that product knowledge, patented technology, ability to respond quickly to customer requirements, positive customer relations, technical background, industry experience and implementation of our global manufacturing strategy and cost reduction efforts are major operational areas where we are able to effectively compete. 

 In the military market, we must compete with other companies, some being larger and some smaller than we are and acting as suppliers of similar products to prime government contractors.  We believe that knowledge of the procurement process, engineering and technical support, price and delivery are major competitive factors in the military market.  We believe that we have competitive strengths in all of these areas due to senior management's involvement in the government procurement process and experience in the design engineering requirements for military equipment.  A substantial portion of spare parts procurement is set aside for small business concerns, which are defined in general as entities that do not exceed 750 employees.  Because we are classified as a small business concern, we qualify for such set aside procurements for which larger competitors are not qualified.  The entry barriers to the military market are significant because of the need, in most cases, for products to pass stringent government tests and qualifications.

Employees

 As of March 31, 2008, we employed 91 persons on a full time basis at our headquarters in Clearwater, Florida and 344 persons at our Honduran subsidiary.  Due to the seasonality of portions of our business and the production requirements placed on our Honduran facility, the number of personnel may vary significantly from the first half of the fiscal year compared to the second half of the fiscal year. 

 None of our employees are represented by a collective bargaining unit, and we consider our relations with our employees to be stable.  While we believe we have established good relations with the local labor force in both the United States and Honduras, our reliance upon a foreign manufacturing facility subjects us to risks inherent in international operations.  Competition for management, technical, manufacturing, sales and support personnel is intense, and there can be no assurance that we will be successful in attracting or retaining such personnel.

 ITEM 1A.  RISK FACTORS 

 Stockholders and investors should carefully consider the risk factors described below, together with the other information contained in this Annual Report, before making any investment decision with respect to our securities.  The risks and uncertainties described below are not the only ones we face.  If any of the following risks occur, our business, financial condition, or results of operation could be significantly impacted and the trading price of our common stock could decline: 

 Failure to achieve our operating strategy.  Our operating strategy is to grow revenue and improve gross margin in our military, recreational vehicle, industrial and consumer markets as well as closely aligned markets if they share similar products or have other synergies.  We plan achieve these growth goals through internal development of new products, acquisitions, strategic partnerships and licensing.  We have undertaken a number of initiatives to lower costs, improve asset turnover and reduce our risk.  These initiatives include, but are not limited to, product line simplification, establishing product platforms in design, greater utilization of our operations in Honduras, utilizing new designs and operations software to improve quality, accelerate product development and reduce the cost of redesigned products.

 Any or all of these objectives may not be realized or, if realized, may not result in increased revenue, profitability or market presence.  Executing our strategy may also place a strain on our production, information technology systems and other resources. 

 Inability to finance our growth and meet our capital requirements.  Our ability to continue the growth of our business requires a large amount of working capital.  If we are unable to fund this growth, we may not be able to compete effectively.  Our requirement for capital depends on the market’s acceptance of our products, the growth of our marketing effort, our ability to expand our customer base, our need for additional capital equipment to adopt new manufacturing methods and new products and for future acquisitions.  We cannot be sure that additional financing, if needed, will be available or if such financing will be on favorable terms.  Without access to these additional funds, we may not be able to remain competitive.

 Unavailability and cost increases in raw materials and components.  Raw materials and components constitute a significant portion of our cost of goods.  Factors that are largely beyond our control, such as movements in commodity prices for the specific materials required, may affect the future cost of raw materials and components.  As an example, our products require a substantial amount of plastic. Because the primary resource used in manufactured plastics is petroleum, the cost and availability of plastic varies to a great extent with the price of petroleum.  We have experienced increases in prices of plastic, as well as steel, aluminum and especially copper, which could continue in fiscal 2009.

 In addition, the inability of our suppliers to timely deliver raw materials or components could be disruptive and costly.  If we are unable to obtain raw materials on a timely basis at an affordable cost or if we experience any significant delays or interruptions of supply, our financial results could be significantly impacted.

 Dependence upon a limited number of key suppliers.  We purchase a significant volume of products from contract manufacturers in China.  In fiscal 2008, for example, our purchases from Chinese vendors were more than $6 million.  The purchase price for these products is set in U.S. dollars.  If the exchange rate between the U.S. dollar and Chinese yuan changes so that the yuan appreciates significantly against the dollar, the cost of building our products could increase significantly.  We anticipate that outsource providers will play key roles in our manufacturing operations.  Although we aim at selecting reputable providers, it is possible that one or more of these providers could fail to perform as we expect and such failure could have an adverse impact on our business.  Because of this expanded role of our outsource providers, we will need to monitor the performance of these suppliers and adopt new procedures to deal with and manage the performance of these outsource providers.  Any delay or failure in the implementation of our operational changes and monitoring of these relationships could adversely affect our customer relationships and/or have a negative effect on our operating results.

 The loss of or significant decrease in sales to large customers.  We must receive a continuous flow of new orders from our large customers.  Failure to obtain anticipated orders or delays or cancellations of orders or significant pressure to reduce prices from key customers could have a material adverse effect on us.  In addition, as a result of the desire to more closely manage inventory levels, there is a growing trend in business, especially in our commercial markets, to make purchases on a “just-in-time” basis.  This requires us to shorten our lead time for production in certain cases and more closely anticipate demand, which could in the future require the carrying of additional inventories or require additional expenses to expedite delivery.

 Long-term contracts may not be renewed.  We currently have contracts with the U.S. military to provide control equipment used in engine generator systems. These contracts currently run through 2012.  We also are a key supplier of control equipment to DRS, a prime contractor with the U.S. military.  As a result of the war in Iraq, demand for these military products has remained strong.  If the war ends or significantly winds down or if our contracts with the military expire and are not renewed, demand for these products could be greatly reduced.

 We may face cancellations, reductions or delays in our product orders that could adversely affect our operating results.  From time to time we receive commercial orders from customers that require us to manufacture products on short notice and have such products available for shipment, even though the order may be reduced, cancelled or delayed.  Some orders may be designed to meet the unique needs of a particular customer.  As a result, changes, delays or cancellations of orders could result in an inventory of unsaleable products and possible inventory write-downs that could adversely affect our operating results.

 Adverse changes in the operations of global manufacturing facilities.  We manufacture a significant number of products in Honduras and obtain a significant proportion of the raw materials and sub-assembly components used in the manufacturing of our products outside the United States.  International operations are subject to risks including, among others:

·labor unrest;

·political instability;

·lack of developed infrastructure;

·longer payment cycles and greater difficulty in collecting accounts;

·import and export duties and quotas;

·changes in domestic and international customs and tariffs;

·unexpected changes in regulatory environments;

·difficulty in complying with a variety of foreign laws;

·difficulty in obtaining distribution and support;

·potentially adverse tax consequences; and

·changes in exchange rates between the U.S. dollar and the foreign currency.

 Labor in Honduras has historically been readily available and at lower cost than available in many other nations; however, we cannot be assured that labor will continue to be available in Honduras at costs consistent with historical levels.  A substantial increase in labor costs could have a material adverse effect on our results of operation.

 Interruptions in manufacturing operations.  Approximately 60% of our revenues are derived from products manufactured or assembled at our manufacturing facility in Honduras and by contract manufacturers located in China.  These manufacturing operations, as well as our manufacturing plant in Clearwater, Florida, are subject to hazards that could result in material damage to any such facilities.  Such damage to or prolonged interruption in the operations of such facilities for repairs, labor disruption, hurricanes, typhoons or other reasons, could have a material adverse effect on us.  In addition, our contract manufacturing agreements can be terminated on short notice.  If our contract manufacturers located in China are unable or unwilling to manufacture and deliver products to enable us to meet the delivery schedules and quality that we require, we could be forced to seek additional suppliers, thereby resulting in further delays and additional expenses in shipping products to our customers.

 Infringement or loss of proprietary rights.  We believe that our rights in owned and licensed names are of increasing importance to our business success and that our ability to create demand for our products is dependent to a large extent on our ability to exploit these trademarks, such as our SurgeGuard and Fire Shield® brand name.  There can be no assurance as to the breadth or degree of protection that these trademarks may afford us, or that we will be able to successfully leverage our trademarks in the future.  The costs associated with protecting our intellectual property rights, including litigation costs, may be material.  We also cannot be sure that we will be able to successfully assert our intellectual property rights or that these rights will not be invalidated, circumvented or challenged.  Any inability to do so, particularly with respect to names in which we have made significant capital investments, or a successful intellectual property challenge or infringement proceeding against us, could have a material adverse effect on us.

 Our success also depends in part on our proprietary technology and patent rights.  If we fail to adequately protect this technology and our patent rights, we may lose our competitive position or face significant expense to protect or enforce our intellectual property rights.  We intend to continue to protect our proprietary technology through patents, copyrights and trade secrets.  Despite this intention, we may not be successful in achieving adequate protection.  Claims allowed on any of our patents may not be sufficiently broad to protect our technology and any patents issued to us also may be challenged, invalidated or circumvented.  With respect to our pending applications for patents, there can be no assurance that we will be successful in obtaining patents from these applications.

 Our industry is characterized by frequent claims regarding patents and intellectual property rights and resulting litigation arising from disputes over the scope of these rights.  On February 16, 2007, Shanghai ELE Manufacturing Corporation (“ELE”) filed a declaratory judgment action against us in the Central District of California alleging that our United States Patent No. 6,292,337 (“the 337 patent”) is invalid and not infringed by ELE. We had previously written a letter to ELE requesting that they cease all infringing activity relating to the '337 patent.  On April 11, 2007, we filed a counterclaim against ELE  asserting that the patent is valid, that ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe the '337 patent.  We are also seeking monetary damages against ELE for past infringement of the '337 patent. The '337 patent underlies our Fire Shield® technology for cord fire prevention. We filed a motion to transfer the ELE action to the United States District Court for the Middle District of Florida, where we are headquartered.  On May 18, 2007, Judge R. Gary Klausner granted our motion and transferred the action to the Middle District of Florida.  We are vigorously pursuing our patent infringement claims but there can be no assurance that we will be able to resolve this dispute under terms and conditions that would not have an adverse affect on our business or our financial results.

 Loss of patent protection could impact our operating results.We currently hold patents on several products, the main patent being the ‘337 patent underlying our Fire Shield ® technology for cord fire prevention.  This patent provides legal protection against competitors who could unlawfully copy our technology.  Once these patents expire, competitors will be able to legally utilize our technology and competition could increase, resulting in lower prices in the marketplace.  If we are unable to develop new patented technologies we may be unable to maintain our profit margins and we could lose our technological advantage in the marketplace.

 Inability to effectively compete due to competitors’ patents.Competitors may register new patents on products that make it very difficult for us to effectively compete in certain markets. As a result, our current products could become obsolete or uneconomical. For example, our products could become difficult to market as a result of a competitor’s patented products that provides equal or superior performance at a lower cost. If we are not able to meet these competitive challenges, we could lose revenue or be forced to write down the value of our inventory.

 Seasonality.  Our business can vary significantly from quarter to quarter.  This seasonality may also result in cash outlays or additional interest expense due to an increased need to borrow funds to maintain sufficient working capital to support such increased demand.

 Competition from companies that produce similar products.  The markets for our products are highly competitive.  We believe that competition is based upon several factors, including price, quality, access to retail shelf space, product features and enhancements, brand names, new product introductions, marketing support and distribution systems.  We compete with established companies, a number of which have substantially greater facilities, personnel, financial and other resources.  Some competitors may be willing to reduce prices and accept lower profit margins to compete with us.  As a result of this competition, we could lose market share and sales, or be forced to reduce our prices to meet competition.  In such cases, we could be required to write down our inventory to market value.

 Additionally, our current products could become obsolete as a result of new customer demands or competitors’ new products.  For example, our products could become unmarketable as a result of a new product that provides superior performance at a lower cost.  If we cannot adapt to these competitive challenges, we may not be able to effectively compete.

 Our design and manufacture of products for sale to the United States military, combined with our international supply chain,  subjects us to certain governmental regulations, such as the International Traffic in Arms Regulations ("ITAR").  Certain of our products that we sell to the United States military are subject to ITAR, which is administered by the U.S. Department of State. ITAR regulates the export of related technical data and defense services as well as foreign production.  Given the current global political climate, there is increased focus by regulators and companies such as ours on ITAR and the actions that it regulates.  We are currently enhancing our ITAR controls and implementing improvements in our internal compliance program.  As we implement these enhancements and improvements, we may address certain of our business practices, which could lead to an increase in our costs.  Also, if we discover issues that are sufficiently material, the U.S. Department of State could impose fines on us, investigate our business practices or impose other remedies upon us which could have a material adverse effect on our business.  Furthermore, the conduct and resolution of any such issues that are sufficiently material could be time consuming, expensive and distracting from the conduct of our business.  In addition, if our ITAR-related enhancements and improvements were to fail or be ineffective for a prolonged period of time, it could have a materially adverse effect on our operating results.

 Newly acquired businesses or product lines.  We may acquire partial or full ownership in businesses or may acquire rights to market and distribute particular products or lines of products.  The acquisition of a business or of the rights to market specific products or use specific product names may involve a financial commitment, either in the form of cash or stock consideration.  There is no guarantee that the acquired businesses or product lines will contribute positively to earnings.  The anticipated synergies may not materialize, cost savings may be less than expected, sales of products may not meet expectations, and acquired businesses may carry unexpected liabilities.  Because we have a small management team, we may not be able to effectively assimilate the operations, technologies, personnel and products from the acquired company or our management team may be diverted from our other business concerns.

 Dependence on new products that are technical in nature. Our products are technical in nature and require significant engineering in order to develop.Rapid technological changes in our industry subject us to increased pressure to develop technological advances in our products. We believe that our future success depends in part upon our ability to develop and offer new products with improved capabilities and add additional features and adaptations of our existing products for new uses. If we are unable to develop sufficient new products to remain competitive, or if our products experience reliability problems, our business could be impacted.  Although products are tested prior to being sold, unanticipated or latent performance issues could be experienced subsequent to release. If new products have reliability or quality problems, our performance may be impacted by reduced orders, higher manufacturing costs, additional service and warranty expenses.  Additionally, if we incur significant numbers of quality issues, we could initiate a formal product recall which could result in significant additional costs. Our failure to complete commercialization of these products in a timely manner could result in unanticipated costs and inventory obsolescence, which would adversely affect our financial results.

 Volatility of our stock price.  In recent years, the price of our common stock has fluctuated greatly.  The price of our common stock could continue to be volatile and fluctuate in response to a variety of factors including, but not limited to, the following:

·general and global economic fluctuation;

·quarter-to-quarter variations in our operating results;

·material differences in revenue or earnings from levels expected by investors;

·announcements of restructurings, technological innovations, reductions in force, departure of key employees,

   consolidations of operations or introduction of new products;

·development in, or claims relating to, patent or other proprietary rights;

·success or failure of our new and existing products;

·disruptions with key customers or suppliers; or

·political, economic or environmental events occurring globally.

 Government regulations could adversely impact our operations.  Throughout the world, most federal, state, provincial and local authorities require Underwriters Laboratory, Inc. or other safety regulation certification prior to marketing electrical products in those jurisdictions.  Most of our products have such certifications; however, there can be no assurance that our products will continue to meet such specifications.  Many foreign, federal, state and local governments also have enacted laws and regulations that govern the labeling and packaging of products and limit the sale of product containing certain materials deemed to be environmentally sensitive.  A determination that our products are not in compliance with such rules and regulations could result in the imposition of fines or an award of damages to private litigants.

 Our business and results of operations could be impacted by the implementation of Sarbanes Oxley.  Under current rules, we were required to complete our initial assessment of the adequacy of internal control over financial reporting under Section 404 of the Sarbanes Oxley Act of 2002 as of March 31, 2008. We also must include in our assessment, a report detailing management’s assessment of the design effectiveness of our internal control over financial reporting as well as the operating effectiveness of our internal control over financial reporting.  Although we will devote significant resources into developing and updating the required documentation and perform the required testing, there can be no assurance that we will be able to comply with all of Section 404’s requirements.

 Additionally, our independent registered public accounting firm must audit the operating effectiveness of our internal control over financial reporting as of March 31, 2010.  If our internal control over financial reporting is not designed or operating effectively, our independent registered public accounting firm may either disclaim an opinion or may issue a qualified opinion as to the effectiveness of our internal control over financial reporting.  If this should occur, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which in turn, could cause a decline in the market price of our common stock.

 The risks listed above are not the only risks that we face.  Additional risks that are not yet known or that we believe to be immaterial may also impair business operations.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

 Not applicable.

ITEM 2.  PROPERTIES

 Our executive offices and U.S. manufacturing facility are located on 4.7 acres of leased land in the St. Petersburg-Clearwater Airport Industrial Park.  The lease, with options, extends until 2021 and is subject to certain price escalation provisions every five years.  This leased land is adequate to enable us to expand this facility to 60,000 square feet.  The present facility provides a total of 43,000 square feet, including 10,000 square feet of offices and engineering areas, as well as 23,000 square feet of production area and 10,000 square feet of warehouse space.

 Our wholly-owned subsidiary in Honduras, TRC Honduras S.A. de C.V., leases 47,000 square feet of building space from ZIP San Jose, an industrial park located in San Pedro Sula, Honduras.  These facilities include 3,000 square feet of office area, as well as 39,000 square feet of production area and 5,000 square feet of warehouse space.  TRC Honduras S.A. de C.V. produces the majority of our commercial products.

ITEM 3.  LEGAL PROCEEDINGS

 On December 29, 2006, we entered into a Settlement Agreement with Tower Manufacturing Corporation.  Under the Settlement Agreement, the civil actions filed by both us and Tower, including Fedders Corporation, were dismissed.  Under the terms of the settlement agreement, Tower agreed to pay $3.2 million over a two year period.  We and Tower have also entered into a cross licensing agreement of the patents that were the subject of the lawsuits for the period they remain valid and enforceable.

 On February 16, 2007, Shanghai ELE Manufacturing Corporation (“ELE”) filed a declaratory judgment action against us in the Central District of California alleging that our United States Patent No. 6,292,337 (“the 337 patent”) is invalid and not infringed by ELE. We had previously written a letter to ELE requesting that they cease all infringing activity relating to the '337 patent.  In April we filed a counterclaim against ELE  asserting that the patent is valid, that ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe the '337 patent.  We are also seeking monetary damages against ELE for past infringement of the '337 patent. The '337 patent underlies our Fire Shield® technology for cord fire prevention.   We filed a motion to transfer the ELE action to the United States District Court for the Middle District of Florida, where we are headquartered.  On May 18, 2007, Judge R. Gary Klausner granted our motion and transferred the action to the Middle District of Florida.  We are vigorously pursuing our claim of patent infringement against ELE in this new venue. 

 We are involved in various claims and legal actions arising in the ordinary course of business.  In our opinion, the ultimate disposition of these matters will not have a material adverse effect on our financial condition, result of operations or cash flows.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended March 31, 2008.

ITEM 4a.  EXECUTIVE OFFICERS OF REGISTRANT

Executive Officers

 Set forth below is information related to our executive officers and their ages as of June 15, 2008.

Name	Age	Position
Owen Farren	57	Chairman of the Board, President and Chief Executive Officer
Raymond B. Wood	73	Director, Senior Vice President and Director of Government Operations and Marketing
Barry H. Black	61	Vice President of Finance, Chief Financial Officer and Secretary

 Owen Farren has been Chairman of the Board of  Directors since November 2007, a Director of the Company since February 2007, and President & CEO since January 2007.  Prior to joining the Company he was the President of StratEx an interim management and turnaround firm from 2002 to December 2006.  From 1990 to 2002 he worked at SL Industries (AMEX:SLI) a power electronics and motion control company where he served as Chairman, President & CEO.  From 1983 until 1990, he worked for Simco Company, a static control company and a unit of Illinois Tool Works Inc. (NYSE:ITW), where he served as President.  Mr. Farren has an MBA in Finance and a BS in Marketing both from Indiana University.

 Raymond B. Wood, a founder of the Company, has been a Director of the Company and Senior Vice President and Director of Government Operations and Marketing of the Company since its inception in 1981.  From 1974 to 1981, he was Manager of Engine Generator Component Marketing for Square D Company.  He was employed by Electromagnetic Industries, Inc. for 17 years prior to its acquisition by Square D Company. During this time, he held the position of General Manager of Electromagnetic Industries of Georgia Inc., the systems manufacturing plant for military products such as diesel generating systems, generators, controls, semi-trailers, etc. Previous assignments included service as Project and Design Engineer for military products produced by Electromagnetic Industries Inc.  Mr. Wood is a charter member of the industries association, Electrical Generating Systems Association (“EGSA”), has served on its Board of Directors and has been the Chairman of the Government Liaison Committee for over 30 years.  Mr. Wood is also a member of the U.S. Naval Institute and the National Defense Industrial Association.  For over 45 years, he has been involved in design, manufacture and qualification conformance evaluation for listing by the Department of Defense, marketing and product application concerning control and measurement of electric power for Mobile Ground Power Military Engine Generator Systems, and electrical power controls for Naval Shipboard and Military Armored Tracked Vehicle application.  During such period, Mr. Wood has had extensive experience with the military procurement, contract administration, engineering and test qualifying locations, as well as with the government prime contractors to the Department of Defense.  Mr. Wood has served on numerous ad hoc committees for military engine generator specification review requirements and is frequently consulted for solutions to problems encountered with military engine generator systems by both the military and prime contractors to the Department of Defense.

 Barry H. Black has been Vice President of Finance and Chief Financial Officer of the Company since January 2006 and was appointed as Secretary in March 2007.  From 1997 to 2006 he was Vice President and Corporate Controller of Paradyne Networks, Inc.  From 1981 through 1997, Mr. Black held various senior financial management positions with Paradyne Corporation and AT&T Paradyne.  Mr. Black has a Bachelor of Arts in Economics from Bowdoin College, a Masters of Science in Accounting from Northeastern University and a Masters of Science in Taxation from Bentley College.

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our common stock is registered under Section 12(g) of the Securities Exchange Act of 1934 and quoted on the NASDAQ stock market system, to which we gained admittance in December 1984, under the symbol “TRCI”.  In November 1995, NASDAQ approved our application for listing on the National Market System.  The following tables set forth a range of high and low market prices for our common stock for the fiscal years ended March 31, 2008 and 2007, as reported on the NASDAQ Stock Market, and the dividends declared with respect to each quarter ended within such years.

Fiscal Year Ended		High	Low		Cash Dividends
March 31, 2008:
First quarter	$	5.65	4.01	$	0.020
Second quarter		4.95	3.08		0.020
Third quarter		3.92	3.13		0.020
Fourth quarter		3.67	2.62		0.020
				$	0.080
March 31, 2007:
First quarter	$	7.57	4.65	$	0.015
Second quarter		5.49	3.94		0.020
Third quarter		5.43	3.80		0.020
Fourth quarter		5.35	4.18		0.020
				$	0.075

 As of May 30, 2008, the approximate number of stockholders of record was 279.  This number does not include any adjustment for stockholders beneficially owning common stock held of record by any institutional fiduciary, which we believe to represent approximately an additional 2872 stockholders.

 Our authorized capital stock, as of May 30, 2008, consisted of 10,000,000 shares of common stock, par value $.51, of which 5,890,828 shares were outstanding.

Dividends

 The payment of dividends on our common stock is within the discretion of our Board of Directors.  In fiscal year 2008, we paid a quarterly cash dividend of $.02 per share.   Dividends of $.08 per share were paid by us in fiscal 2008 and $.075 per share for fiscal 2007.

Securities Authorized for Issuance Under Equity Compensation Plans

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

Stock Repurchase Program

 We did not repurchase any equity securities during the years ended March 31, 2008 or 2007.  On June 28, 2006, the Board of Directors terminated the Stock Repurchase Program.

ITEM 6.  SELECTED FINANCIAL DATA

 The following selected consolidated balance sheet data as of March 31, 2008 and 2007 and operating results for the years ended March 31, 2008, 2007, and 2006 are derived from our consolidated financial statements which are included elsewhere in this Form 10-K.  The selected consolidated balance sheet data as of March 31, 2006, 2005 and 2004 and operating results for the years ended March 31, 2005 and 2004 are derived from audited consolidated financial statements which are not included in this Form 10-K.  You should read the selected financial data in conjunction with “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data.”

		Years ended March 31,
		2008		2007		2006		2005		2004
						(In thousands)
Revenues	$	37,160		37,992		45,620		39,433		24,337
Cost of sales		27,900		29,368		34,978		29,618		14,831
Gross profit		9,260		8,624		10,642		9,815		9,506
Operating expenses		9,123		10,000		7,922		7,172		5,684
Income (loss) from operations		137		(1,376	)	2,720		2,643		3,822
Interest expense		(75	)	(182	)	(255	)	(48	)	-
Other income		182		3,264		32		29		15
		107		3,082		(223	)	(19	)	15
Income before income taxes		244		1,706		2,497		2,624		3,837
Income tax expense		(112	)	244		746		1,378		1,161
Net income	$	356		1,462		1,751		1,246		2,676
Earnings per share:
Basic	$	0.06		0.25		0.30		0.22		0.48
Diluted	$	0.06		0.25		0.30		0.21		0.46
Shares outstanding:
Basic		5,889		5,884		5,786		5,755		5,589
Diluted		5,958		5,907		5,834		5,954		5,828
Consolidated Balance Sheet Data:
Cash and cash equivalents and short-term  investments	$	3,627		3,969		3,107		1,302		5,968
Working capital		15,734		16,032		15,393		13,602		12,611
Total assets		24,950		28,279		29,144		32,177		18,572
Long-term debt		-		2,000		2,000		2,350		-
Total debt		-		3,000		3,000		5,350		-
Total stockholders' equity		19,889		19,725		18,158		16,440		15,452
Cash dividends paid		0.080		0.075		0.06		0.06		0.06

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The following management’s discussion and analysis describes the principal factors affecting the results of our operations, liquidity and capital resources, as well as our critical accounting policies. This discussion should be read in conjunction with the accompanying audited consolidated financial statements, which include additional information about our significant accounting policies, practices and the transactions that underlie our financial results, and the risk factors described in “ITEM 1A — RISK FACTORS” of this Annual Report on Form 10-K. Since TRC qualifies as a smaller reporting company, the tabular disclosure of contractual obligations contemplated by Item 303(a)(5) of SEC Regulation S-K has been omitted as permitted by Item 303(d) of SEC Regulation S-K.

Executive Summary

 In fiscal 2008, our revenues decreased $0.8 million or 2.2 % compared with fiscal 2007.  Our commercial business declined during fiscal 2008 due to a sharp drop in our RAC business while our military business increased $2.6 million or 22.8% from the prior year.  Although we incurred a $2.0 million write down in inventory and loss on purchase commitments in fiscal 2008, our gross profit increased $0.6 million from the prior year.  The increase in gross profit was due largely to a more favorable mix of sales of higher margin products and $.3 million of royalty income, a $.3 million increase over the prior year.  Operating expenses decreased $0.9 million from fiscal 2007 levels, largely due to lower professional fees (mostly due to lower legal fees following the December 2006 settlement of the patent infringement lawsuit and related counterclaim with Tower Manufacturing Corporation and Fedders Corporation).  Other income (expense), net, decreased $3.0 million from income of $3.1 million to income of $0.1 million.  The prior year $3.2 million settlement of the lawsuit with Tower Manufacturing Corporation was the reason for this significant decrease in other income.  In fiscal 2008 debt declined $3 million.

Overview

 We are an internationally recognized leader in the design, manufacture and sale of electrical safety products.  We market and sell our products through several channels of distribution including our in-house sales force, retail, distribution, domestic and international OEMs and third party sales representation organizations.

 We recognize revenues from equipment sales when evidence of a sales arrangement exists, pricing is fixed or determinable, delivery, including title passage has taken place, and collectability from the customer is reasonably assured.  Amounts billed to customers in sales transactions related to shipping and handling are classified as product revenues.  Royalty revenues are recognized when we have delivered technical specifications and performed required services under the related agreement.  In fiscal 2007, we began to see a decline in our sales of RAC products due to increased competition, a trend which continued throughout fiscal 2008.  Our military revenues rebounded in fiscal 2008 from the prior year after funding in the U.S. budget again became available.

 Our gross margins are affected by many different factors including competitive price pressures, product mix, differences in manufacturing volumes, changes in the cost of raw materials, charges for excess or obsolete inventory, and costs of warranty repairs.  We generally provide a one-year warranty on product sales.  We believe that our accrued warranty is adequate to cover the cost of future warranty work on products we have sold.  During fiscal 2008, we wrote down the carrying value of our inventory to market value by $2.0 million which significantly impacted our gross margins.  These adjustments to write inventory down to market value mainly resulted from reduced demand for our RAC products, which was due to increasing competition from off-shore, low-cost manufacturers.

 Selling and marketing expenses include salaries, bonuses, commissions and related employee expenses for sales personnel, advertising, promotional and trade show expenses, travel, consulting fees, and facilities expense.

 General and administrative expenses consist of salaries, bonuses and related employee expenses, travel, consulting fees, facilities expense, legal and audit, charge offs of bad debts and board of director fees.

 Research and development expenses principally include salaries for engineers and technical support staff, consulting, outside testing service fees, maintenance contracts on software, and depreciation of engineering equipment.

 Our operating expenses decreased from the past year due primarily to reduction of litigation and professional fees in connection with our lawsuit against Tower Manufacturing Corporation that was initiated in the fiscal 2006 year. 

Results of Operations

 The following table summarizes our operating results as a percentage of revenues for each of the periods shown:

	2008	2007	2006	2005	2004
Revenues:
Commercial	61.0%	69.7%	70.7%	68.5%	49.1%
Military	38.1%	30.3%	29.3%	31.1%	50.6%
Royalties	0.9%	-	-	0.4%	0.3%
Total revenues	100.0%	100.0%	100.0%	100.0%	100.0%
Cost of sales	75.1%	77.3%	76.7%	75.1%	60.9%
Gross profit	24.9%	22.7%	23.3%	24.9%	39.1%
Operating expenses:
Selling and marketing	7.4%	7.6%	5.8%	6.5%	9.8%
General and administrative	12.0%	12.8%	7.3%	6.5%	7.9%
Research and development	5.1%	5.3%	4.3%	5.2%	5.7%
Business restructuring charges	-	0.4%	-	-	-
Other	-	0.2%	-	-	-
Total operating expenses	24.6%	26.3%	17.4%	18.2%	23.4%
Income (loss) from operations	.4%	(3.6)%	5.9%	6.7%	15.7%
Interest expense	(0.2)%	(0.5)%	(0.6)%	(0.1)%	-
Other income	0.5%	8.6%	0.1%	0.1%	-
	0.3%	8.1%	(0.5)%	0.0%	-
Income before income taxes	.7%	4.5%	5.5%	6.7%	15.7%
Income tax expense	(0.3)%	0.6%	1.6%	3.5%	4.7%
Net income	1.0%	3.9%	3.8%	3.2%	11.0%

Fiscal 2008 and 2007 Comparison

 Revenues for fiscal 2008 decreased $.8 million, or 2.1% to $37.2 million from $38.0 million for the prior fiscal year.  Commercial revenues decreased $3.8 million due to a sharp decrease in RAC revenues.  Military revenues increased $2.6 million or 22.8% to $14.2 million from $11.5 million in fiscal 2007.  The decline in commercial revenue was principally a result of declining RAC revenues due to competition from off-shore, low-cost manufacturers.  The increase in military revenues was attributable to increased demand after government funding became available near the end of the prior fiscal year.  In fiscal 2009, we expect continued pressure on prices in the RAC Market to result in continued reduction of RAC revenue.

 Gross profit increased $.6 million to $9.3 million for fiscal 2008 from $8.6 million for fiscal 2007.  The higher fiscal 2008 gross profit was primarily due to the sale of products with higher gross profit margins (product mix).  The fiscal 2008 write-down of inventory to lower of cost or market and the increased loss on purchase commitments in total amounting to $2.0 million as compared to $1.4 million in fiscal 2007 was due to the steep decline in demand for RAC products.  The $.6 million increase in inventory write-down and loss on purchase commitments negatively impacted fiscal 2008’s gross profit versus the prior year.    Gross profit as a percentage of revenues increased 2.2% from 22.7% in fiscal 2007 to 24.9% in fiscal 2008.  This increase in gross profit as a percent of revenues is also primarily due to the change in sales mix.

 Selling and marketingexpense of $2.8 million, or 7.4% of revenues, decreased $.1 million in fiscal 2008 from $2.9 million, or 7.6% of revenues in fiscal 2007.  The $.1 million decrease from the prior year was primarily due to a decrease in compensation expense.  Selling and marketing expense as a percent of revenues decreased .2% principally due to the $.1 million decrease in selling and marketing expenses.  We expect selling and marketing expense to remain at approximately the same levels in fiscal 2009. 

 General and administrative expense declined $.4 million or 7.9% of revenues to $4.5 million or 12.0% of revenues for fiscal 2008  The decrease from the prior year was principally due to $.6 million in lower professional fees and $.2 million in lower write offs of bad debts partially offset by $.2 million in higher compensation related expenses, and $.1 in higher employee related expenses.  The reduction in professional fees is due to the settlement of our patent infringement lawsuit with the Tower Manufacturing Corporation in December 2006.  General and administrative expense as a percent of revenues decreased .8% from 12.8% in fiscal 2007 to 12.0% in fiscal 2008 primarily due to the decrease in general and administrative expenses discussed above.

 Research and development expense of $1.9 million or 5.1% of revenues in fiscal 2008 declined $.1 million from $2.0 million, or 5.3% of revenues in fiscal 2007.  We expect research and development expense to remain at approximately the same expense level in fiscal 2009 as compared with fiscal 2008.

 Restructuring charges were $.0 million in fiscal 2008 versus $.1 in fiscal 2007.  In March 2007, we reduced our U.S. workforce by approximately 12% in order to adjust our cost structure to be more competitive due to the loss of RAC revenues.  There were no comparable restructuring charges in fiscal 2008.

 Other operating expenses consisted of $.0 million in fiscal 2008 compared with $.1 in fiscal 2007. Other operating expense in fiscal 2007 consisted of a write-down of assets to fair value.

 Other income (expense), net was $.1 million of income in fiscal 2008 versus $3.1 million of income in fiscal 2007, a decrease in income of $3.0 million.  The decrease in other income was primarily attributable to the patent infringement lawsuit settlement of $3.2 million that was recorded in the third quarter of fiscal 2007.  In addition, interest expense declined from the prior year due to the repayment of all borrowings in fiscal 2008.

 Income tax expense decreased $.4 million to $.1 million of benefit in fiscal 2008.  The decrease was due to lower income in fiscal 2008 as well as the jurisdictional source where the income was earned.  Our U.S. income was eliminated due to the large write down in inventory to market value and the increased loss on purchase commitments resulting in the only income we earned in fiscal 2008 being earned in Honduras where there is no income tax.  Income tax expense as a percent of income before income taxes was (45.9%) in fiscal 2008, compared with 14.3% in fiscal 2007. 

 Historically, our effective tax rate has varied based on the mix of income before income taxes derived from our Honduran subsidiary, which had not been subject to income taxes, and the balance of income before income taxes derived in the United States, which is subject to income taxes.  Our Honduran subsidiary is profitable which decreases our effective tax rate.  At each reporting period, we make our best estimate of the effective tax rate expected for the full fiscal year and apply that rate to the current year-to-date income before income taxes.  Any difference between the current and preceding estimated effective tax rate expected for the full fiscal year is reflected as an adjustment in the current quarter's income tax expense.  In accordance with SFAS 109, Accounting for Income Taxes, we do not record deferred income taxes on the foreign undistributed earnings of an investment in a foreign subsidiary that are essentially permanent in duration.   We expect our effective income tax rate to be between 27% to 32% in fiscal 2009.

 Net income was $.4 million for fiscal 2008, compared with $1.5 million reported in fiscal 2007, a decrease of $1.1 million.  Although gross profit in fiscal 2008 was $.6 million higher than fiscal 2007 and operating expenses were $.9 million lower resulting in $1.5 million higher operating income in fiscal 2008, we had $3.1 million lower other income in fiscal 2008, because there was no comparable $3.2 million settlement in connection with a patent infringement lawsuit as had occurred in fiscal 2007.

Fiscal 2007 and 2006 Comparison

 Revenues for fiscal 2007 decreased $7.6 million, or 16.7% to $38.0 million from $45.6 million for the prior fiscal year.  Commercial revenues decreased $5.8 million largely due to a sharp decrease in RAC revenues.  Military revenues declined $1.8 million or 13.8% to $11.5 million from $13.4 million in fiscal 2006.  The decline in commercial revenue was principally a result of declining RAC revenues due to competition from off-shore, low cost manufacturers.  The decrease in military revenues was largely attributable to the lack of available funding late in the government’s fiscal year.

 Gross profit decreased $2.0 million to $8.6 million for fiscal 2007 from $10.6 million for fiscal 2006.  The lower fiscal 2007 gross profit was primarily due to the $7.6 million decrease in revenues and to $1.4 million in write-downs of inventory principally due to a decline in demand and selling price for RAC products due to competition from off-shore, low cost manufacturers.  Gross profit as a percentage of revenues declined .6% from 23.3% for the fiscal 2006 year to 22.7% in fiscal 2007.  This decline in gross profit as a percent of revenues was primarily due to the write downs of RAC inventory as discussed above.  Without this write-down in inventory, gross profit would have increased approximately 3.7% largely due to a sales mix of higher margin products.

 Selling and marketingexpense of $2.9 million, or 7.6% of revenues, increased $.3 million for fiscal 2007 from $2.6 million, or 5.8% of revenues in fiscal 2006.  The $.3 million increase over the prior year was primarily due to increases in compensation expense  of $.1 million, professional fees of $.1 million and travel of $.1 million.  Selling and marketing expense as a percent of revenues increased 1.8% principally due to the $7.6 million decrease in revenues in fiscal 2007 as well as the $.3 million increase in selling and marketing expenses.

 General and administrative expense was $4.8 million, or 12.8% of revenues, for fiscal 2007, compared with $3.3 million, or 7.3% of revenues, for fiscal 2006, an increase of $1.5 million, or 45.7%.  The increase over the prior year was principally due to $.9 million in higher professional fees mostly due to the lawsuit with Tower Manufacturing Corporation, $.4 million in higher compensation related expenses, $.2 million in higher write offs of bad debts, and $.1 million in higher amortization of intangible expenses.  General and administrative expense as a percent of revenues increased 5.5% from 7.3% in fiscal 2006 to 12.8% in fiscal 2007.  This increase is primarily due to the higher legal, compensation, bad debts, and amortization of intangibles expense as well as the $7.6 million decrease in revenues in fiscal 2007.

 Research and development expense was $2.0 million of expense in both fiscal 2007 and fiscal 2006.  Research and development expense was 5.3% as a percent of revenues for fiscal 2007 compared with 4.3% for fiscal 2006.  The 1.0% increase is due to the $7.6 million decrease in revenues in fiscal 2007.

 Restructuring charges were $.1 million in expense in fiscal 2007 versus $0 for fiscal 2006.  In March 2007, we reduced our U.S. workforce by approximately 12% in order to adjust our cost structure to be more competitive due to the loss of RAC revenues.  There were no comparable restructuring charges in fiscal 2006.

 Other operating expenses consisted of $.1 million or .2% of revenues in fiscal 2007 compared with $0 in fiscal 2006. Other operating expense consisted of a write-down of assets to fair market value.

 Other income (expense), net was $3.1 million in income in fiscal 2007 versus $.2 million in expense in fiscal 2006, an increase in income of $3.3 million.  The increase in other income was primarily attributable to the patent infringement lawsuit settlement agreement payment of $3.2 million that was recorded in the third quarter of fiscal 2007.  In addition, interest expense declined from the prior year due to lower loan balances outstanding.

 Income tax expense decreased $.5 million to $.2 million of expense in fiscal 2007 from $.7 million in fiscal 2006.  The decrease was principally due to higher income tax expense in fiscal 2006 resulting from a deemed dividend from our Honduran subsidiary to the U.S. parent company under Sections 951 and 956 of the Internal Revenue Code that resulted from borrowings under our joint line of credit with our Honduran subsidiary. Fiscal 2006 income taxes were reduced by the reversal of a tax accrual in the amount of $.1 million in the fourth quarter of fiscal 2006 as a result of concluding an audit by the Internal Revenue Service for the fiscal 2004 year.  Income tax expense as a percent of income before income taxes was 14.3% in fiscal 2007, compared with 29.9% in fiscal 2006.

 Historically, our effective tax rate has varied based on the mix of income before income taxes derived from our Honduran subsidiary, which had not been subject to income taxes, and the balance of income before income taxes derived in the United States, which is subject to income taxes.  Our Honduran subsidiary is profitable which decreases our effective tax rate.  In fiscal 2005 and 2006, the earnings from foreign operations were taxable as deemed dividends to the parent company due to borrowings under our revolving credit agreement that were secured by the assets of the Honduran subsidiary.  At each reporting period, we make our best estimate of the effective tax rate expected for the full fiscal year and apply that rate to the current year-to-date income before income taxes.  Any difference between the current and preceding estimated effective tax rate expected for the full fiscal year is reflected as an adjustment in the current quarter's income tax expense.  In accordance with SFAS 109, Accounting for Income Taxes, prior to fiscal 2005 we did not record deferred income taxes on the foreign undistributed earnings of an investment in a foreign subsidiary that are essentially permanent in duration.

 Net income was $1.5 million for fiscal 2007, compared with $1.8 million reported in fiscal 2006, a decrease of $.3 million.  Lower fiscal 2007 revenues and gross profit and higher fiscal 2007 operating expenses were largely offset by the $3.2 million settlement of the patent infringement lawsuit and the lower income tax provision when compared with fiscal 2006.

Critical Accounting Policies

 The preparation of financial statements and related disclosures, in conformity with United States generally accepted accounting principles, requires management to make judgments, assumptions and estimates that affect the amounts reported.  Certain of these significant accounting policies are considered to be critical accounting policies, as defined below. 

 A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations.  Specifically, critical accounting estimates have the following attributes:  (i) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and (ii) different estimates that we could reasonably have used, or changes in the estimates actually used resulting from events that could be reasonably foreseen as likely to have a material effect on our financial condition or results of operations.

 Estimates and assumptions about future events and their effects cannot be determined with certainty.  We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances.  These estimates may change as new events occur, as additional information is obtained and as our operating environment changes.  These changes have historically been minor and have been included in the consolidated financial statements once known.  In addition, we are periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time.  These uncertainties are discussed in the section above entitled Disclosure Regarding Forward-Looking Statements and in section Item 1A above, entitled Risk Factors.  Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our consolidated financial statements are fairly stated in accordance with United States generally accepted accounting principles and present a meaningful presentation of our financial condition and results of operations. 

 We believe that the following are critical accounting policies:

 Revenue Recognition/Allowance for Doubtful Accounts.  We recognize revenue from commercial customers when an order has been received and accepted, pricing is fixed, delivery has occurred and title to the product has passed and collectability is reasonably assured.  Title generally passes upon shipment to the customer; however, in a limited number of cases, title passes upon receipt of shipment by the customer.  We have no installation obligation subsequent to product shipment.  Similarly, revenues from sales to distributors are recognized as title passes to them without additional involvement or obligation.  Collection of receivables related to distributor sales is not contingent upon subsequent sales to third parties.  Royalty revenues are recognized as reported by licensees.

 We may enter into government contracts that fall within the scope of Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1) (“non-standard” products) or fall outside the scope of SOP 81-1 (“standard” products).  For government contracts within the scope of SOP 81-1, we record revenue under a units of delivery model with revenues and costs equal to the average unit value times the number of units delivered.  Any estimated loss on an overall contract would be recognized in the period determined in accordance with SOP 81-1.  For government contracts outside the scope of SOP 81-1, we record revenue the same as for commercial customers discussed above and would record a loss in the event the costs to fulfill a government contract are in excess of the associated revenues.  We have not experienced past losses on government contracts, and currently, we do not have any transactions being accounted for within the scope of SOP 81-1.

 We record an allowance for estimated losses resulting from the inability of customers to make timely payments of amounts due on account of product purchases.  We assess the credit worthiness of our customers based on multiple sources of information, including publicly available credit data, subscription based credit reports, trade association data, and analyzes factors such as historical bad debt experience, changes in customer payment terms or payment patterns, credit risk related to industry and geographical location and economic trends.  This assessment requires significant judgment.  If the financial condition of our customers were to worsen, additional write-offs could be required, resulting in write-offs not included in our current allowance for doubtful accounts.

 Inventories.  Because of the lead times required to obtain certain raw materials, we must maintain sufficient quantities on hand to meet expected product demand for each of our many products.  If actual demand is much lower than forecasted, we may not be able to dispose of our inventory at or above our cost.  We write down our inventory for estimated excess and obsolete amounts to the lower of cost or market.  We review the reasonableness of our estimates each quarter (or more frequently).  An allowance is established for inventory that has had no activity for long periods of time or for which management believes is no longer salable.  This allowance is reviewed and approved by the senior management team.  In the future, based on our quarterly analysis, if we estimate that any remaining allowance for obsolescence is either inadequate or in excess of the inventory allowance required, we may need to adjust it.  At present, based on our analysis, we believe the allowance is properly valued for the inventory held by us.

 Income Taxes.  Significant management judgment is required in developing our provision for income taxes, including the determination of any accrual for tax contingencies, any foreign withholding taxes or any United States income taxes on undistributed earnings of the foreign subsidiary, deferred tax assets and liabilities and any valuation allowances that might be required to be applied against the deferred tax assets.  It had been management’s intention to reinvest undistributed earnings of our foreign subsidiary and thereby indefinitely postpone their repatriation.  Accordingly, prior to fiscal 2005 no provision had been made for foreign withholding taxes or United States income taxes which would become payable if undistributed earnings of our foreign subsidiary are paid to us as dividends.  In fiscal 2005 and fiscal 2006, pursuant to Sections 951 and 956 of the Internal Revenue Code, approximately $3.3 million of current year and prior undistributed earnings of our Honduran subsidiary were deemed dividends to the parent company and subject to U.S. income tax.  Accordingly a provision was recorded for all of the taxes attributable to these deemed dividends in fiscal 2005 and fiscal 2006. The circumstances that triggered the taxation of our foreign earnings no longer exist and it is our intention to reinvest future undistributed earnings of our foreign subsidiary and thereby indefinitely postpone their repatriation.

 We apply the Comparable Profits Method for transfer pricing to determine the amounts our subsidiary charges to the parent.

 Warranty.  We generally provide a one year warranty period for our products.  We also provide coverage on certain of our surge products for “downstream” damage of products not manufactured by us.  Our warranty provision represents our estimate of probable liabilities, calculated as a function of sales volume and historical repair experience for each product under warranty.  Our warranty accrual represents our estimate of our liability for warranty repairs that we will incur over the warranty period.

 Impairment of Long-Lived Assets.  We review long-lived assets for possible impairment of carrying value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Statement of Financial Accounting Standards No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.  In evaluating the fair value and future benefit of our assets, management performs an analysis of the anticipated undiscounted future net cash flows to be derived from the use of individual assets over their remaining amortization period.  If the carrying amount of an asset exceeds its anticipated undiscounted cash flows, we recognize an impairment loss equal to the difference between its carrying value and its fair value.

 Stock-Based Compensation.  We account for stock-based compensation in accordance with the provisions of SFAS No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123(R)”).  Under the fair value recognition provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period of the award.  Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires judgment, including estimating stock price volatility and expected option life.  If actual forfeitures differ significantly from our estimates, adjustments to compensation cost may be required in future periods.

 The discussion below contains forward-looking statements about our expectations of what could happen in the future.  Forward-looking statements involve uncertainties and risk and our actual results could differ materially from the results anticipated by our forward-looking statements due to many known and unknown factors, including but not limited to those previously discussed in “Risk Factors” and elsewhere in this report.  See also the cautionary notice regarding forward-looking statements at the beginning of this Form 10-K under the heading “Disclosures Regarding Forward-Looking Statements.”

 You should read the following discussion and analysis in conjunction with “Item 6. Selected Financial Data” and “Item 8. Financial Statements and Supplementary Data” of this Form 10-K.

Liquidity and Capital Resources

 As of March 31, 2008, our cash and cash equivalents decreased $1.3 million to $2.1 million from the March 31, 2007 balance of $3.5 million.  The three components of this decrease were cash provided by operating activities of $2.7 million, cash used in investing activities of $.6 million and cash used in financing activities of $3.5 million.

 Cash provided by operating activities primarily resulted from net income of $.4 million, depreciation of $1.2 million, a decrease in inventory of $1.5 million, a decrease in trade and other accounts receivable of $.5 million, an increase in accrued expenses of $.4 million and stock compensation expense of $.3 million, partially offset by a decrease in income taxes of $1.0 million, and an increase in net deferred tax assets of $.5 million. The decrease in inventories is largely due to the write downs of inventory.  The decrease in accounts receivable was primarily due to improved collections.  The increase in accrued expenses is primarily due to the increased loss on purchase commitments.  The increase in stock compensation expense reflects an increase in the number of options vesting during the period.  The decrease in income tax payable primarily reflects the payment of federal income taxes due to filing amended income tax returns for fiscal 2005 and fiscal 2006 and paying the additional income tax resulting from deemed dividends from our Honduran subsidiary.  The increase in net deferred tax assets reflects the increase in temporary differences between book and tax deductible items.

 Cash used in investing activities was due to cash of $1.0 million used to acquire short term investments along with cash of $.4 million paid for purchases of property, plant and equipment less cash received of $.9 million upon collection of a note receivable.

 Cash used in financing activities was due to $3.0 million used to pay off the line of credit and dividends paid of $.5 million.

 The maturity date of the revolving credit agreement with our institutional lender is September 30, 2009.  The agreement provides for borrowings up to $6.0 million.  We have the option of borrowing at the lender's prime rate of interest minus 100 basis points or the 30-day London Interbank Offering Rate (“LIBOR”) plus 160 basis points.   The loan is collateralized with a perfected first security interest which attaches to most of our key assets including accounts and notes receivable, inventory, investments, demand deposit accounts maintained with our lender, and 65% of the voting stock of our Honduran subsidiary, and requires us to maintain certain financial ratios.  Our Honduran subsidiary is no longer a borrower under the loan agreement.  As of March 31, 2008, we were in compliance with the covenants under our revolving credit agreement.  As of March 31, 2007, we had $3.0 million in outstanding borrowings, of which $1.0 million was recorded as current portion of long-term debt based upon our intent to repay that amount in the next year and $2.0 million was recorded as long-term debt, less current portion.  As of March 31, 2008, we had no outstanding borrowings.

 We have no off-balance sheet arrangements and no debt relationships other than noted above.

 We believe cash flow from operations, the available bank borrowings and current short-term investments and cash and cash equivalents will be sufficient to meet our working capital requirements for the next 12 months.

New Accounting Standards

In September 2006, the Financial Accounting Standards Board (“the FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS No. 157”).  SFAS No. 157 establishes a single definition of fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.  The Company is currently evaluating whether SFAS No. 157 will result in a change to its fair value measurements.  The measurement and disclosure requirements are effective for the Company beginning in the first quarter of fiscal 2009.

 In June 2006, the FASB ratified the Emerging Issues Task Force (“EITF”) consensus on Issue No. 06-03, “How Taxes Collected from Customers and Remitted to Government Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)” (“EITF No. 06-03”).  The Company is required to adopt the provisions of EITF No. 06-03 with the fiscal year beginning April 1, 2007.  The implementation of EITF No. 06-03 did not have an impact on the Company’s fiscal 2008 consolidated financial statements.

 In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Liabilities” (“SFAS No. 159”).  SFAS 159 allows companies to make an election to carry certain eligible financial assets and liabilities at fair value, even if fair value measurement has not historically been required for such assets and liabilities under U.S. GAAP.  The provisions of SFAS No. 159 are effective for the Company’s fiscal year beginning April 1, 2008.  The Company is currently assessing the impact SFAS No. 159 may have on its consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 141R, Business Combinations (“SFAS 141R”). SFAS 141R requires that business combinations will result in assets and liabilities of an acquired business being recorded at their fair values as of the acquisition date, with limited exceptions. Certain forms of contingent consideration and certain acquired contingencies will be recorded at fair value at the acquisition date. SFAS 141R also states acquisition costs will generally be expensed as incurred and restructuring costs will be expensed separately from the business combination in periods after the acquisition date. This statement is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company is currently reviewing SFAS I41R’s requirements and is assessing the impact SFAS 141R may have on its consolidated financial statements.

 In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No. 51"(SFAS No. 160).  SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as non-controlling interests and classified as a component of equity.  SFAS No. 160 is effective for us on a prospective basis for business combinations with an acquisition date beginning in the first quarter of fiscal year 2010.  As of March 31, 2008, we did not have any minority interests.  The adaption of SFAS No. 160 will not impact our consolidated financial statements. 

 In March 2008, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. The Company will be required to provide enhanced disclosures about (a) how and why derivative instruments are used, (b) how derivative instruments and related hedged items are accounted for under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Certain Hedging Activities (“SFAS 133”), and its related interpretations, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the requirements of SFAS 161 and has not yet determined the impact of adoption, if any, on its financial position, results of operations or cash flows.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We do not engage in investing or trading market risk sensitive instruments.  We also do not purchase, for investing, hedging, or for purposes “other than trading,” instruments that are likely to expose us to market risk, whether interest rate, foreign currency exchange, commodity price or equity price risk, except as noted in the following paragraph.  We have not entered into any forward or futures contracts, purchased any options or entered into any interest rate swaps.  Additionally, we do not currently engage in foreign currency hedging transactions to manage exposure for transactions denominated in currencies other than U.S. dollars.

 As of March 31, 2008, we have no long-term debt.  If we borrow, our loans are subject to changes in interest rates.   Additionally, the rate of interest is based on either the lender’s prime rate or on the 30-day London Interbank Offering Rate at our option.  We have exposure to changes in interest rates from investments in held-to-maturity securities.  With our current level and term of investments, a 1% change in the market rate of interest would result in a change in interest income of approximately $15 thousand on an annual basis. 

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The Consolidated Financial Statements and Schedule required by this Item are set forth on the pages indicated at Item 15(a).

Consolidated Financial Statements
	Page
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements	F-1
Consolidated Balance Sheets as of March 31, 2008 and 2007	F-2
Consolidated Statements of Operations for the years ended March 31, 2008, 2007 and 2006	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2008, 2007 and 2006	F-5
Notes to Consolidated Financial Statements	F-6 thru F-18
Consolidated Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts	F-19

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

ITEM 9A.  CONTROLS AND PROCEDURES

 As of the end of the period covered by this Annual Report, we carried out, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (“the Certifying Officers”), an evaluation of the effectiveness of our “disclosure controls and procedures” (as the term is defined under Rules 13a–15(e) and 15d–15(e) promulgated under the Securities Exchange Act of 1934 as amended).  Based on this evaluation, the Certifying Officers have concluded that our disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Reporting

 Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  Management conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2008.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework”.  Based on this assessment, management concluded that, as of March 31, 2008, our internal control over financial reporting was effective.

 Further, there were no changes in our internal control over financial reporting during our fourth fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

 This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide management’s report in this Annual Report..

ITEM 9B.  OTHER INFORMATION

 None.

PART III

 Certain information required by Part III is incorporated by reference from our definitive proxy statement (the “Proxy Statement”) for the 2008 annual meeting of stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, which we will file no later than 120 days after the end of the fiscal year covered by this Report.  With the exception of the information expressly incorporated by reference from the Proxy Statement, the Proxy Statement is not to be deemed filed as a part of this Report.

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

ITEM 11.  EXECUTIVE COMPENSATION

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

ITEM 13.  CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

 Information with respect to this item may be found in our definitive proxy statement to be delivered to stockholders in connection with our 2008 Annual General Meeting of Stockholders.  Such information is incorporated by reference.

PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 (a) List of documents filed as part of this Report.

  (1) All financial statements.

Index to Financial Statements	Page
Consolidated Financial Statements	F-1
Consolidated Balance Sheets as of March 31, 2008 and 2007	F-2
Consolidated Statements of Operations for the years ended March 31, 2008, 2007 and 2006	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2008, 2007 and 2006	F-5
Notes to Consolidated Financial Statements	F-6 thru F-18

  (2) Financial Statement Schedules.

Schedule II - Valuation and Qualifying Accounts   F-19

 All other schedules have been omitted because the required information is included in the Consolidated Financial Statements or the notes thereto, or is not applicable or required.

  (3) Exhibits.

Exhibit No.	Description
3.1	Articles of Incorporation and By-Laws. (1)
3.2	Amended Articles of Incorporation dated September 24, 1990. (2)
3.3	Amended Articles of Incorporation dated September 24, 1996.  Filed Herewith.
3.4	Amended Articles of Incorporation dated August 21, 2003.  Filed Herewith.
3.5	Amended and Restated By-Laws, effective May 15, 2008.  Incorporated by reference to TRC's Form 8-K files March 21, 2008.
10.1	$3,000,000 Revolving Loan Note, dated December 14, 1999, between the Company and SouthTrust Bank.  Incorporated by reference to TRC's Annual Report on Form 10-KSB for the quarter ended December 31, 1999, filed February 15, 2000.
10.2	The 2000 Long Term Incentive Plan effective August 24, 2000.  Incorporated by reference to TRC's  Form DEF 14-A filed July 13, 2000.(3)
10.3	Amendment to 2000 Long Term Incentive Plan to increase the number of shares from 300,000 to 600,000 effective August 21, 2003.  Incorporated by reference to TRC's S-8 filed November 26, 2003.(3)
10.4	Amendment to 2000 Long Term Incentive Plan to increase the number of shares from 600,000 to 1,100,000 effective August 24, 2004.  Filed Herewith.(3)
10.5	License Agreement, dated March 24, 2002, between the Company and Tecumseh Products Company granting use of the Company's Fire Shield® technology to be integrated into a protective product for Refrigeration and Air Conditioning Systems against electric faults.  Incorporated by reference to TRC's Annual Report on Form 10-KSB  for the year ended March 31, 2002.
10.6	Whirlpool Servicing Agreement dated August 9, 2004.  Incorporated by reference to TRC's 10-QSB for the quarter ended September 30, 2004, filed November 15, 2004.
10.7	Amended Revolving Credit Agreement, dated December 20, 2004, between the Company and its subsidiary and SouthTrust Bank, increasing the amount available to borrow from $3,000,000 to $6,000,000 and extending the maturity date to December 14, 2006.  Incorporated by reference to TRC's Form 8-K filed December 21, 2004
10.8	Amended and Restated Loan Agreement, dated December 27, 2007, between the Company and Wachovia Bank, National Association, extending the maturity date to September 30, 2009, and eliminating the Company’s wholly-owned subsidiary, Technoloty Research Corporation Honduras/S.A. de C.V. as a co-borrower.  Incorporated by reference to TRC’s Form 8-K filed January 30, 2008
10.9	Promissory Note, dated December 27, 2007, payable by the Company to Wachovia Bank, N.A.   Incorporated by reference to TRC’s Form 8-K filed January 30, 2008.
10.10	Security Agreement, dated Decemember 27, 2007, between the Company and Wachovia Bank, N.A.  Incorporated by reference to TRC’s Form 8-K filed January 30, 2008.
10.11	Change of Control Agreement between the Company and its Chief Financial Officer, Barry H. Black, dated January, 2006, filed with and as part of the Registrant's Form 10-Q for the period ended December 31, 2005, filed February 14, 2006. (3)
10.12	Patent Infringement Lawsuit Settlement Agreement, dated December 29, 2006, by and between the Company and Tower  Manufacturing Corporation.  Incorporated by Reference to TRC’s Form 10-Q for the period ended December 31, 2006, filed June 20, 2007.
10.13	Form of Individual Director Indemnification Agreement.  Incorporated by reference to TRC’s Form 10-K for the year ended March 31, 2007, filed June 29, 2007. (3)
10.14	Form of Non-Qualified Stock Option Grant under the Company's 2000 Long Term Incentive Plan.  Incorporated by reference to TRC’s Form 10-K for the year ended March 31, 2007, filed June 29, 2007. (3)
10.15	Form of Qualified Stock Option Grant under the Company's 2000 Long Term Incentive Plan. (3)
14.1	Code of Conduct.  Filed Herewith.
14.2	Code of Ethics for Principal Executive, Financial and Accounting Officers.  Filed Herewith.
21	Subsidiaries of the Registrant.  Filed herewith.
23	Consent of Independent Registered Public Accounting Firm.  Filed herewith.
31.1	Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.  Filed herewith.
31.2	Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.  Filed herewith.
32.1	Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.  Filed herewith.
32.2	Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.  Filed herewith.

______________________

(1)  Previously filed with and as part of the Registrant's Registration Statement on Form S-1 (No. 33-24647).

(2)  Previously filed with and as part of the Registrant's Annual Report on Form 10-KSB for the year ended March 31, 1991.

(3)  Management contracts and compensatory plans or arrangements required to be filed as an Exhibit pursuant to Item 15(b) of Form 10-K.

SIGNATURES

 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TECHNOLOGY RESEARCH CORPORATION

By:       /s/ Owen Farren                               

                  Owen Farren

                  President and Chief Executive Officer

                 (Principal Executive Officer)

Date:     June 27, 2008

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

Signature	Title	Date
/s/  Owen Farren	Chairman of the Board of Directors, President and Chief Executive Officer	June 27, 2008
Owen Farren	(Principal Executive Officer)
/s/  Barry H. Black	Vice President of Finance, Chief Financial Officer and Secretary	June 27, 2008
Barry H. Black	(Principal Financial and Accounting Officer)
/s/  Raymond B. Wood	Director and Senior Vice President of Government Operations	June 27, 2008
Raymond B. Wood
/s/  Gerry Chastelet	Director	June 27, 2008
Gerry Chastelet
/s/  Raymond V. Malpocher	Director	June 27, 2008
Raymond V. Malpocher
/s/  Patrick M. Murphy	Director	June 27, 2008
Patrick M. Murphy
_________________	Director
Edmund F. Murphy, Jr.
/s/  N. John Simmons, Jr.	Director	June 27, 2008
N. John Simmons, Jr.
/s/  David F. Walker	Director	June 27, 2008
David F. Walker

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Consolidated Financial Statements

 Index

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Financial Statements:
Consolidated Balance Sheets as of March 31, 2008 and 2007	F-2
Consolidated Statements of Operations for the years ended March 31, 2008, 2007 and 2006	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2008, 2007, and 2006	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2008, 2007 and 2006	F-5
Notes to Consolidated Financial Statements	F-6
Consolidated Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts	F-19

Report of Independent Registered Public Accounting Firm

The Board of Directors

Technology Research Corporation:

 We have audited the consolidated financial statements of Technology Research Corporation and subsidiary as listed in the accompanying index.  In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index.  These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Technology Research Corporation and subsidiary as of March 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 2008, in conformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

 As discussed in Note 1(l) to the consolidated financial statements, the Company changed its method of accounting for stock-based compensation upon adoption of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment,” applying the modified prospective method.

/s/  KPMG LLP

June 27, 2008

Tampa, Florida

Certified Public Accountants

F-1

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

  Consolidated Balance Sheets

March 31, 2008 and 2007

(In thousands, except share data)

ASSETS		2008	2007
Current assets:
Cash and cash equivalents (note 5)	$	2,132	3,471
Short-term investments (note 5)		1,495	498
Trade and other accounts receivable, net of allowance for
doubtful accounts of $123 in 2008 and $273 in 2007 (note 5)		6,573	6,950
Other receivable - current portion		869	884
Income taxes receivable		197	-
Inventories, net (notes 2 and 5)		7,788	9,294
Deferred income taxes (note 6)		1,446	999
Prepaid expenses and other current assets		258	351
Total current assets		20,758	22,447
Property, plant and equipment, net of accumulated depreciation of
$11,604 in 2008 and $10,472 in 2007 (note 3)		3,684	4,412
Other receivables - less current portion		-	850
Intangible assets net of accumulated amortization of $119 in 2008 and $59 in 2007		463	523
Other assets		45	47
Total assets	$	24,950	28,279

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (note 5)	$	-		1,000
Trade accounts payable		3,111		3,027
Accrued expenses		1,781		1,409
Accrued dividends		132		133
Income taxes payable		0		846
Total current liabilities		5,024		6,415
Long-term debt, less current portion (note 5)		0		2,000
Deferred income taxes (note 6)		37		139
Total liabilities		5,061		8554
Stockholders' equity (note 7):
Common stock $0.51 par value; 10,000,000 shares authorized,
5,912,328 shares and 5,910,328  shares issued, and
5,890,828 shares and 5,888,828 shares outstanding		3,015		3,014
Additional paid-in capital		9,568		9,287
Retained earnings		7,346		7,464
Common stock held in treasury, 21,500 shares at cost		(40	)	(40	)
Total stockholders' equity		19,889		19,725
Total liabilities and stockholders' equity	$	24,950		28,279

The accompanying notes are an integral part of the consolidated financial statements.

F-2

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

  Consolidated Statements of Operations

Years ended March 31, 2008, 2007 and 2006

(In thousands, except share data)

		2008		2007		2006
Revenues (note 9):
Commercial	$	22,680		26,471		32,250
Military		14,152		11,521		13,370
Royalties		328		-		-
Total revenues		37,160		37,992		45,620
Cost of sales		27,900		29,368		34,978
Gross profit		9,260		8,624		10,642
Operating expenses:
Selling and marketing		2,756		2,906		2,640
General and administrative		4,463		4,847		3,327
Research and development		1,904		2,026		1,955
Business restructuring charges		-		138		-
Other		-		83		-
Total operating expenses		9,123		10,000		7,922
Income (loss) from operations		137		(1,376	)	2,720
Interest expense		(75	)	(182	)	(255	)
Other income		182		3,264		32
		107		3,082		(223	)
Income before income taxes		244		1,706		2,497
Income tax (benefit) expense (note 6)		(112	)	244		746
Net income	$	356		1,462		1,751
Earnings per share - basic	$	0.06		0.25		0.30
Earnings per share - diluted	$	0.06		0.25		0.30
Shares outstanding - basic		5,889,136		5,884,083		5,786,129
Shares outstanding - diluted		5,958,336		5,906,563		5,833,947

The accompanying notes are an integral part of the consolidated financial statements.

F-3

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Consolidated Statements of Stockholders' Equity

Years ended March 31, 2008, 2007 and 2006

(In thousands, except share data)

					Additional								Total
	Common stock				paid-in		Retained			Treasury			stockholders'
	Shares		Amount		capital		earnings			stock			equity
Balances as of March 31, 2005:		5,773,875	$	2,955		8,483		5,042			(40	)		16,440
Dividends - $0.06 per share		-		-		-		(348	)		-			(348	)
Net income		-		-		-		1,751			-			1,751
Stock compensation expense		-		-		38		-			-			38
Tax benefit related to exercise
of stock options		-		-		51		-			-			51
Exercise of stock options		53,274		28		198		-			-			226
Balances as of March 31, 2006:		5,827,149		2,983		8,770		6,445			(40	)		18,158
Dividends - $0.075 per share		-		-		-		(443	)		-			(443	)
Net income		-		-		-		1,462			-			1,462
Stock compensation expense		-		-		144		-			-			144
Tax benefit related to exercise
of stock options		-		-		5		-			-			5
Exercise of stock options		10,000		5		47		-			-			52
Issuance of shares in connection
with acquisition (note 14)		51,679		26		321		-			-			347
Balances as of March 31, 2007:		5,888,828	$	3,014		9,287		7,464			(40	)		19,725
Dividends - $0.08 per share		-		-		-		(474	)		-			(474	)
Net income		-		-		-		356			-			356
Stock compensation expense		-		-		278		-			-			278
Tax benefit related to exercise
of stock options		-		-		1		-			-			1
Exercise of stock options		2,000		1		2								3
Balances as of March 31, 2008		5,890,828	$	3,015		9,568		7,346			(40	)		19,889

The accompanying notes are an integral part of the consolidated financial statements.

F-4

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

  Consolidated Statements of Cash Flows

Years ended March 31, 2008, 2007 and 2006

(In thousands)

	2008			2007			2006
Cash flows from operating activities:
Net income	$	356			1,462			1,751
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion on short-term investments		(17	)		(17	)		(13	)
Change in allowance for doubtful accounts		(150	)		195			(94	)
Note receivable received as partial settlement of lawsuit		-			(1,700	)		-
Accretion of interest on note receivable		(127	)		(34	)		-
Collection of interest on note receivable		142			-			-
Depreciation		1,157			1,126			1,255
In-process research and development		-			17			-
Amortization of intangible assets		60			59			-
Stock compensation expense		278			144			38
Deferred income taxes		(549	)		(649	)		(371	)
Loss on disposal of assets		-			83			-
Changes in operating assets and liabilities, net of effects of acquisition:
Trade and other accounts receivable		527			3,585			2,479
Inventories, net		1,506			418			1,828
Prepaid expenses and other current assets		93			(141	)		305
Other assets		2			23			26
Trade accounts payable		84			(1,823	)		(3,121	)
Accrued expenses		372			86			(5	)
Income taxes		(1,043	)		(622	)		859
Net cash provided by (used in) operating activities		2,691			2,212			4,937
Cash flows from investing activities:
Maturities of short-term investments		2,000			1,309			-
Purchases of short-term investments		(2,980	)		(1,290	)		-
Acquisition of business		-			(331	)		-
Capital expenditures		(429	)		(682	)		(725	)
Proceeds from collection of notes receivable		850			-			-
Net cash used in investing activities		(559	)		(994	)		(725	)
Cash flows from financing activities:
Borrowing of short-term debt		-			3,000			10
Repayments of short and long-term debt		(3,000	)		(3,000	)		(2,360	)
Proceeds from the exercise of stock options		3			52			226
Tax benefit related to exercise of stock options		1			5			51
Cash dividend paid		(475	)		(411	)		(347	)
Net cash used in financing activities		(3,471	)		(354	)		(2,420	)
Net (decrease) increase in cash and cash equivalents		(1,339	)		864			1,792
Cash and cash equivalents at beginning of year		3,471			2,607			815
Cash and cash equivalents at end of year	$	2,132			3,471			2,607
Supplemental cash flow information:
Cash paid for interest	$	76			124			228
Cash paid for income taxes	$	1,480			1,514			207
Supplemental schedule of noncash investment activities:
The Company purchased a Recreational Vehicle product line business from Automated Engineering Corporation.  In conjuction with the acquisition, cash and non cash consideration was provided as follows:
Cash paid to seller		-			279			-
Cash paid for acquisition costs		-			52			-
Common stock issued to seller, 51,679 shares		-			347			-
Assets acquired		-			678			-

The accompanying notes are an integral part of the consolidated financial statements.

F-5

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(1)  Summary of Significant Accounting Policies

(a)  Description of Business

Technology Research Corporation and subsidiary (the “Company”) is an internationally recognized leader in the design, manufacture and marketing of electrical safety products that save lives, protect people against serious injury from electrical shock and/or prevent electrical fires in the home and workplace.  Based on its core technology in ground fault sensing, the Company's products are designed to meet the needs of the consumer, commercial and industrial markets worldwide.  The Company also supplies power monitors and control equipment to the United States military and its prime contractors, primarily for use on mobile electric generators.  The Company's corporate headquarters are located in Clearwater, Florida.  The Company incorporated TRC Honduras, S.A. de C.V., a wholly owned subsidiary, for the purpose of manufacturing the Company's high volume products in Honduras.  The Company primarily sells its products direct to the customer, through retail stores, to original equipment manufacturers and through electrical distributors involved in a variety of industries and to governmental entities. The Company performs credit evaluations of all new customers and generally does not require collateral.  The Company's customers are located throughout the world.  See note 9 for further information on major customers.  The Company also licenses its technology for use by others in exchange for a royalty or product purchases.

(b)  Use of Estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(c)  Principles of Consolidation

The consolidated financial statements include the financial statements of Technology Research Corporation and its wholly owned subsidiary, TRC Honduras, S.A. de C.V. All significant intercompany balances and transactions have been eliminated in consolidation.

(d)  Cash Equivalents

Cash equivalents amounted to $53 and $2,065 as of March 31, 2008 and 2007, respectively, and consisted of money market accounts.  For purposes of the consolidated statements of cash flows, the Company considers all short-term investments with original maturities of three months or less to be cash equivalents.

(e)  Short-term Investments

The value of the short-term investment totaled $1,495 as of March 31, 2008, consisting of corporate securities in the amount of $3 and original cost plus accrued interest on U.S. Treasury Bills in the amount of $1,492.  The Company considers all of its short-term investments to be held-to-maturity, and therefore, are recorded at amortized cost.

(f) Revenue Recognition/Allowance for Doubtful Accounts

The Company recognizes revenue from commercial customers when an order has been received and accepted, pricing is fixed, delivery has occurred and title to the product has passed and collectability is reasonably assured.  Title generally passes upon shipment to the customer; however, in a limited number of cases, title passes upon receipt of shipment by the customer.  We have no installation obligation subsequent to product shipment.  Similarly, revenue from sales to distributors is recognized as title passes to them without additional involvement or obligation.  Collection of receivables related to distributor sales is not contingent upon subsequent sales to third parties.  Royalty revenues are recognized as reported by licensees.

The Company may enter into government contracts that fall within the scope of Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1) (“non-standard” products) or fall outside the scope of SOP 81-1 (“standard” products).  For government contracts within the scope of SOP 81-1, the Company records revenue under a units of delivery model with revenues and costs equal to the average unit value times the number of units delivered.  Any estimated loss on an overall contract would be recognized in the period determined in accordance with SOP 81-1.  For government contracts outside the scope of SOP 81-1, the Company records revenue the same as for commercial customers discussed above and would record a loss in the event the costs to fulfill a government contract are in excess of the associated revenues.  The Company has not experienced past losses on government contracts, and in fiscal 2008, the Company does not have any transactions being accounted for within the scope of SOP 81-1.

F-6

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

The Company records an allowance for estimated losses resulting from the inability of customers to make timely payments of amounts due on account of product purchases.  The Company assesses the credit worthiness of its customers based on multiple sources of information, including publicly available credit data, subscription based credit reports, trade association data, and analyzes factors such as historical bad debt experience, changes in customer payment terms or payment patterns, credit risk related to industry and geographical location and economic trends.  This assessment requires significant judgment.  If the financial condition of its customers were to worsen, additional write-offs could be required, resulting in write-offs not included in the Company's current allowance for doubtful accounts.

(g)  Concentration of Credit Risk

The Company maintains most of its short-term investments in U.S. Treasury Bills.

The Company sells products to customers throughout the world and in many markets including retail, distribution, OEM, and directly to consumers.  Customers are reviewed for creditworthiness, and the Company maintains an allowance for anticipated losses.  The Company had one customer with an accounts receivable balance equal to more than 10% of total accounts receivable at the end of the Company's fiscal 2008 year. 

One Far East contract manufacturer supplied the Company with 15% of our total inventory purchases in fiscal 2008.  In fiscal 2007, one Far East contract manufacturer supplied the Company with 19% of our total inventory purchases.

(h)  Inventories

Inventories are stated at the lower of cost or market.  Market represents net realizable value.  Cost is determined using the first-in, first-out method. 

(i) Property, Plant, and Equipment

Property, plant, and equipment are stated at cost.  Depreciation is calculated on the straight-line half-year method over the estimated useful lives of the assets.

(j)  Impairment or Disposal of Long-Lived Assets

The Company reviews long-lived assets for possible impairment of carrying value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Statement of Financial Accounting Standards No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.  In evaluating the fair value and future benefit of the Company's assets, management performs an analysis of the anticipated undiscounted future net cash flows to be derived from the use of individual assets over their remaining amortization period.  If the carrying amount of an asset exceeds its anticipated undiscounted cash flows, the Company recognizes an impairment loss equal to the difference between its carrying value and its fair value.

(k)  Income Taxes

Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(l)  Stock-Based Compensation 

As of April 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123R, Share-Based Payment, (“SFAS 123R”) for its share-based compensation plans.  Previously, the Company accounted for these plans under the principles of Accounting Principles Board Opinion No. 25, Accounting for Stock issued to Employees (“APB 25”) and related interpretations and disclosure requirements set by Statement of Financial Accounting Standard No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure.

Prior to the fiscal year ended March 31, 2007 following the principles of APB 25, no compensation expense was recognized in earnings for the Company’s stock options, except for the acceleration of vesting of options for a former officer of the Company in September 2005 and reflected in the financial results for the fiscal year ended March 31, 2006.  The pro forma effects on net income and earnings per share resulting from the stock options were disclosed in a footnote to the financial statements.  Under SFAS 123R, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense in earnings over the requisite service period.

F-7

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

The Company adopted SFAS 123R using the modified prospective transition method.  Under this method, prior periods are not restated to reflect the impact of SFAS 123R.  Under SFAS 123R, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option pricing model.  The Company adopted the Black Scholes model to estimate the fair value of options.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statements of Operations.

The following table illustrates the impact on net income and earnings per share as if the Company had followed SFAS 123 and utilized its fair-value recognition provisions for all of its share-based compensation awards for the fiscal year ended March 31, 2006 (in thousands, except per share data):

		Year ended March 31,
		2006
Net income - as reported	$	1,751
Add:  Total stock-based employee compensation expense
included in the determination of reported net income,
net of related income taxes of $8.		31
Deduct:  Total stock-based employee compensation expense
determined under fair value based method for all
awards, net of related income taxes of $344.
		(1,374)
Net income - pro forma	$	408
Basic earnings per share:
As reported	$	0.30
Pro forma	$	0.07
Diluted earnings per share
As reported	$	0.30
Pro forma	$	0.07

The implementation of SFAS 123R had no impact on the Company’s cash position.  Stock compensation expense of $278 and $144 resulting from the implementation of SFAS 123R was included in the consolidated statements of operations for fiscal 2008 and 2007, respectively.  The consolidated statements of cash flows for the fiscal years ended March 31, 2008 and 2007, include an adjustment to reconcile net income to net cash provided by operating activities of $278 and $144, respectively, due to this non-cash stock compensation expense.

Cash received from the exercise of stock options under all share-based payment arrangements for the fiscal year ended March 31, 2008, 2007, and 2006 was $3, $52, and $226, respectively.  Currently, the Company expects to utilize available registered shares when share-based awards are issued.

On May 24, 2005, in contemplation of the implementation of SFAS 123R, the Company’s Board of Directors approved the acceleration in the vesting of all out-of-the-money, unvested stock options held by current employees, including executive officers and directors, effective May 25, 2005.  An option was considered to be out-of-the-money if, on the effective date, the stated option exercise price was greater than the closing price of the Company’s common stock on May 25th, $5.07 per share.  As a result of this action, unvested options to purchase approximately 449,000 shares became exercisable.  The decision to accelerate vesting of these options was made primarily to avoid recognizing compensation cost in the Company’s future financial statements upon the effectiveness of SFAS 123R.  It was estimated that the maximum future compensation cost that was avoided based upon the Company’s implementation date for SFAS 123R of April 1, 2006 was approximately $642.  The Company reported the avoided future compensation cost in the fiscal year 2006 financial statements in a pro-forma footnote disclosure, as permitted under the transition guidance provided by the Financial Accounting Standards Board.  The vesting acceleration did not result in the recognition of any compensation expense in the consolidated statements of operations for the fiscal year ended March 31, 2006.

(m)  Earnings Per Share

Basic earnings per share have been computed by dividing net earnings by the weighted average number of common shares outstanding.

Diluted earnings per share have been computed by dividing net earnings by the weighted average number of common and common equivalent shares outstanding.  The weighted average common and common equivalent shares outstanding figure has been adjusted to include the number of shares that would have been outstanding if the stock options had been exercised, at the average market price of the period, with the proceeds being used to buy shares from the market (i.e. the treasury stock method).

F-8

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

The table below reconciles the calculation of basic and diluted earnings per share:

	Years ended March 31,
		2008	2007	2006
Net income	$	356	1,462	1,751
Weighted average shares outstanding - basic		5,889,136	5,884,083	5,786,129
Dilutive common shares issuable upon exercise of stock options		69,201	22,480	47,818
Weighted average shares outstanding - diluted		5,958,336	5,906,563	5,833,947
Earnings per common share:
Basic	$	0.06	0.25	0.30
Diluted	$	0.06	0.25	0.30

For the fiscal year ended March 31, 2008, options to purchase 287,800 shares were considered anti-dilutive for the purposes of calculating earnings per share. For the fiscal year ended March 31, 2007, options to purchase 261,900 shares were considered anti-dilutive for the purposes of calculating earnings per share.  For the fiscal year ended March 31, 2006, options to purchase 497,876 shares of common stock were considered anti-dilutive for purposes of calculating earnings per share.  

(n)  Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (“SFAS No. 157”).  SFAS No. 157 establishes a single definition of fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.  The Company is currently evaluating whether SFAS No. 157 will result in a change to its fair value measurements.  The measurement and disclosure requirements are effective for the Company beginning in the first quarter of fiscal 2009.

In June 2006, the FASB ratified the Emerging Issues Task Force (“EITF”) consensus on Issue No. 06-03, “How Taxes Collected from Customers and Remitted to Government Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation)” (“EITF No. 06-03”).  The Company is required to adopt the provisions of EITF No. 06-03 with the fiscal year beginning April 1, 2007.  The implementation of EITF No. 06-03 did not have an impact on the Company’s fiscal 2008 consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Liabilities” (“SFAS No. 159”).  SFAS 159 allows companies to make an election to carry certain eligible financial assets and liabilities at fair value, even if fair value measurement has not historically been required for such assets and liabilities under U.S. Generally Accepted Accounting Principles.  The provisions of SFAS No. 159 are effective for the Company’s fiscal year beginning April 1, 2008.  The Company is currently assessing the impact SFAS No. 159 may have on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations (“SFAS 141R”). SFAS 141R requires that business combinations will result in assets and liabilities of an acquired business being recorded at their fair values as of the acquisition date, with limited exceptions. Certain forms of contingent consideration and certain acquired contingencies will be recorded at fair value at the acquisition date. SFAS 141R also states acquisition costs will generally be expensed as incurred and restructuring costs will be expensed separately from the business combination in periods after the acquisition date. This statement is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company is currently reviewing SFAS I41R’s requirements and is assessing the impact SFAS 141R may have on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No. 51"(SFAS No. 160).  SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as non-controlling interests and classified as a component of equity.  SFAS No. 160 is effective for us on a prospective basis for business combinations with an acquisition date beginning in the first quarter of fiscal year 2010.  As of March 31, 2008, we did not have any minority interests.  The adaption of SFAS No. 160 will not impact our consolidated financial statements. 

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. The Company will be required to provide enhanced disclosures about (a) how and why derivative instruments are used, (b) how derivative instruments and related hedged items are accounted for under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Certain Hedging Activities (“SFAS 133”), and its related interpretations, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the requirements of SFAS 161 and has not yet determined the impact of adoption, if any, on its financial position, results of operations or cash flows.

(o)  Advertising Expenses

The Company accounts for advertising expenditures as expense in the period incurred.  For the fiscal years ended March 31, 2008, 2007, and 2006, advertising expenses were $186, $134 and $127, respectively.

F-9

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(p)  Fair Value of Financial Instruments

The fair value of short-term investments, trade and other accounts receivable, trade accounts payable, accrued expenses, accrued dividends and income taxes receivable approximates their book value due to their short-term nature.  The fair value of long-term debt also approximates its book value because the variable interest rate appropriately reflects the interest rate the Company expects for similar debt of comparable maturity.

(2)  Inventories

Inventories at March 31, 2008 and 2007 consist of the following:

		2008	2007
Raw materials	$	4,976	6,102
Work-in-process		663	461
Finished goods		2,149	2,731
Total	$	7,788	9,294

Approximately 51% and 45% of inventories were located in Honduras as of March 31, 2008 and 2007, respectively.  In March 2008, the Company recorded a write-down of inventory in the amount of $1,212 and an increased loss due to non-cancellable purchase commitments in the amount of $459, and in December 2007, the Company recorded a write-down of inventory in the amount of $284. Substantially all of the write down and the increased loss on non-cancellable purchase commitments in fiscal 2008 were due to continued reduction in demand for RAC products. In March 2007, the Company recorded a write-down of inventory in the amount of $704 and an increased loss due to non-cancellable purchase commitments in the amount of $69, and in September 2006, the Company recorded a write-down of inventory in the amount of $468.  Approximately $1.1 million of the annual charge in fiscal 2007 for the write-down in inventory was required due to a decline in the selling price and a reduction in demand of products due to increased competition for our RAC products being sold to the Chinese air conditioner manufacturers.  The remainder of the annual charge is principally due to the write down of existing inventory that is being sold to domestic customers.

(3)  Property, Plant and Equipment

Property, plant and equipment as of March 31, 2008 and 2007 consist of:

		2008	2007	Estimated useful lives
Building and improvements	$	1,679	1,640	20 years
Machinery and equipment		13,609	13,244	5 - 15 years
		15,288	14,884
Less: Accumulated depreciation		11,604	10,472
	$	3,684	4,412

Approximately 37% and 29% of property, plant and equipment was located in Honduras as of March 31, 2008 and 2007, respectively.

(4)  Warranty

The Company generally provides a one year warranty period for all of its products.  The Company also provides coverage on certain of its surge products for “downstream” damage of products not manufactured by the Company.  The Company's warranty provision represents management's best estimate of probable liabilities, calculated as a function of sales volume and historical repair experience for each product under warranty.  A roll-forward of the activity in the Company's warranty liability, included in accrued expenses, for the fiscal years ended March 31, 2008, 2007, and 2006  is as follows:

	Years ended March 31,
	2008			2007			2006
Beginning balance	$	90			111			310
Warranty expense		152			67			475
Warranty claims		(105	)		(88	)		(674	)
Ending balance	$	137			90			111

F-10

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(5)  Debt

The maturity date of the revolving credit agreement with the Company’s institutional lender is September 30, 2009.  The agreement provides for borrowings up to $6.0 million.  The Company has the option of borrowing at the lender's prime rate of interest minus 100 basis points or the 30-day London Interbank Offering Rate (“LIBOR”) plus 160 basis points.   The loan is collateralized with a perfected first security interest which attaches to most of the Company’s key assets including receivables, inventory, investments, demand deposit accounts maintained with the Company’s lender, and 65% of the voting stock of the Company’s Honduran subsidiary and requires the Company to maintain certain financial ratios.  The Company’s Honduran subsidiary is no longer a borrower under the loan agreement.   As of March 31, 2008, the Company had no borrowings on this credit agreement and the full $6 million is available.  As of March 31, 2007, the Company had $3.0 million in outstanding borrowings, of which $1.0 million was recorded as current portion of long-term debt and $2.0 million was recorded as long-term debt, less current portion.

The Company has no off-balance sheet arrangements and no debt relationships other than noted above.

(6)  Income Taxes

The Company's effective income tax rate was (45.9)%, 14.3% and 29.9% for the years ended March 31, 2008, 2007, and 2006, respectively. The effective income tax rate is based on the estimated income for the year and the composition of this income from the U.S. and from our Honduran subsidiary.  The income tax rate on income earned from Honduras is zero due to a tax holiday and, therefore, the effective rate is lower than the U.S. statutory rate due to the mix of income earned in the U.S. versus income earned in Honduras.

As of April 1, 2007, the Company adopted FASB Interpretation Number 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.  The interpretation contains a two step approach to recognizing and measuring uncertain tax positions.  The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any.  The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement.  As a result of implementing FIN 48, we did not recognize any cumulative effect adjustment impacting retained earnings as of the beginning of fiscal 2008. 

As of April 1, 2007, there are no unrecognized tax benefits and no accrued interest and penalties.  As of March 31, 2008, the Company has unrecognized tax benefits of $12, accrued interest of $4, and there are no accrued penalties.  After adoption of FIN 48, the Company’s policy is to recognize interest and penalties in the provision for income taxes.

The Company files U.S. Federal and Florida income tax returns.  The Company has concluded an audit on all U.S. federal income tax matters through the fiscal 2004 year.  Federal income tax returns for fiscal years 2005 through 2008 and state income tax returns for fiscal years 2005 through 2008 have not been audited.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of March 31, 2008 and 2007 are presented below:

	2008			2007
Deferred tax assets:
Accounts receivable, principally due to allowance for doubtful accounts	$	44			90
Inventories, principally due to a different cost basis for financial        reporting purposes and additional costs inventoried for tax purposes		1,224			815
Stock-based compensation		91			36
Accrued expenses		156			138
Intangible Assets, principally due to differences in amortization		20
Total gross deferred tax assets		1,535			1,079
Deferred tax liabilities:
Property, plant and equipment, principally due to differences in depreciation		(57	)		(139	)
Prepaid expenses		(69	)		(80	)
Total gross deferred tax liability		(126	)		(219	)
Net deferred tax assets	$	1,409			860

F-11

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

Net deferred tax assets included in the accompanying consolidated balance sheets as of March 31, 2008 and 2007 are as follows:

		2008		2007
Deferred income taxes, current asset	$	1,446		999
Deferred income taxes, noncurrent liability		(37	)	(139	)
	$	1,409		860

Management assesses the likelihood that the deferred tax assets will be realized which is dependent upon the generation of taxable income during the periods in which those temporary differences become deductible.  Management considers historical taxable income, the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes the Company will realize the benefits of these deductible differences at March 31, 2008.

Income tax (benefit) expense for the years ended March 31, 2008, 2007, and 2006 consists of:

		2008		2007		2006
Current:
Federal	$	404		825		1,070
State		33		68		47
		437		893		1,117
Deferred:
Federal		(518	)	(601	)	(366	)
State		(31	)	(48	)	(5	)
		(549	)	(649	)	(371	)
	$	(112	)	244		746

Income tax (benefit) expense for the years ended March 31, 2008, 2007 and 2006 differs from the amounts computed by applying the Federal income tax rate of 34% to income before income taxes as a result of the following:

		2008		2007		2006
Computed expected tax expense	$	83		580		849
Increase (reduction) in income taxes resulting from:
Foreign earnings for which no income taxes have been provided		(233	)	(256	)	(47	)
State income taxes, net of Federal income tax effect		1		13		28
Incentive stock options		42		-
Domestic production activities deduction		(25	)	(60	)	-
Provision for uncertain tax positions		16		-		(83	)
Other		4		(33	)	(1	)
	$	(112	)	244		746

The operating results of the foreign manufacturing subsidiary are not subject to foreign tax as it is operating under an indefinite tax holiday granted on January 7, 2002 by the Honduran Secretary of Industry and Commerce.  Prior to January 7, 2002, the subsidiary operated under a 20-year tax holiday.  The foreign operations generated income of approximately $686 in 2008, $708 in 2007, and $1,147 in 2006.  In March 2007, the Company determined that during fiscal years March 31, 2005 and 2006 it had inadvertently triggered additional U.S. taxable income and an income tax liability due to its borrowings under the Company’s joint line of credit with its Honduran subsidiary.  In April 2007, the Company filed amended income tax returns and paid additional income taxes for the years ended March 31, 2005 and 2006.  In June 2007, the Company filed restated financial statements with the SEC.  As of March 31, 2007 no income taxes have been provided on the $686 of Honduran earnings in fiscal 2008, $708 of Honduras earnings in fiscal 2007 and $251 of Honduras earnings in the fourth quarter of fiscal 2006.

The total amount of undistributed earnings of the foreign subsidiary for income tax purposes was approximately $1,645 as of March 31, 2008.  It is the Company's intention to reinvest undistributed earnings of its foreign subsidiary and thereby indefinitely postpone its remittance.  Accordingly, no provision has been made for foreign withholding taxes or United States income taxes which may become payable if undistributed earnings of the foreign subsidiary were paid as dividends to the Company.  It is not practicable to calculate the unrecognized deferred tax liability on those earnings.

F-12

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(7) Stock Options and Grants

The Company has adopted stock plans that provide for the grant of equity based awards to employees and directors, including incentive stock options, non-qualified stock options and restricted stock awards of Company common stock (the “Plans”). Employee stock options generally vest over a three-year period and as of March 31, 2008 Director stock options also vest over a three year period. Director stock options granted prior to March 31, 2008 vested over a two year period. The exercise price of incentive stock options granted under the Plans will not be less than 100% of the fair market value of shares of common stock on the date of grant. For any participant owning stock representing more than 10% of the voting power of all classes of Company stock, the exercise price will not be less than 110% of the fair market value of the shares on the date of grant. The term of options may not exceed ten years. Except in highly unusual circumstances, non-qualified stock options will be granted at the fair market value on the date of grant.

The Company's 1993 Incentive Stock Option Plan and the Company's 1993 Amended and Restated Non-Qualified Stock Option Plan have expired, and no options will be granted from these plans in the future. Certain options under these plans, however, are still outstanding and can be exercised in the future.

The Company’s 1996 Stock Option Performance Plan provided for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code and non-qualified stock options to employees.  A total of 400,000 shares of common stock were reserved for issuance under this plan.  The 1996 Stock Option Performance Plan was terminated on July 1, 2006.  A total of 150,000 shares available for grant expired, and a total of 210,976 options outstanding expired unexercised.  No shares will be granted from this plan in the future, and no shares are available for exercise.

On March 24, 2000, the Company's Board of Directors adopted the 2000 Long Term Incentive Plan and it was approved by the Company's stockholders in August 2000 at its annual meeting.  The 2000 Long Term Incentive Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to employees and non-qualified stock options to either employees or directors of the Company.  The 2000 Long Term Incentive Plan also allows for the grant of restricted stock awards to officers and directors.  A total of 1.1 million shares of common stock have been reserved for issuance under the 2000 Long Term Incentive Plan, of which 136,500 remain available for awards as of March 31, 2008.

The table below summarizes activity in the Plans for the fiscal years ended March 31, 2008, 2007, and 2006:

				Aggregate(1)	Weighted	Weighted
	Shares			intrinsic	average	average
	available	Restricted	Options	value	exercise	remaining
	for grant	Stock	outstanding	(in thousands)	price	contractual life
Balance as of March 31, 2005	643,850		680,852		$ 7.27
Options granted	(40,000)		40,000		$ 6.72
Options canceled	-		(126,667)		$ 5.90
Options exercised	-		(53,274)	$ 147	$ 4.23
Balance as of March 31, 2006	603,850		540,911	$ 745	$ 7.86	5.05
Options expired	(150,000)		-		$ 5.13
Options granted	(50,000)		50,000		$ 5.17	9.67
Restricted stock grants	(23,370)	23,370	-
Options canceled	-		(235,976)		$ 5.59
Restricted stock forfeited	23,370	(23,370)	-
Options exercised	-	-	(10,000)	$   13	$ 5.17
Balance as of March 31, 2007	403,850	-	344,935	$ 107	$ 9.10	7.44
Options granted	(444,700)		444,700		$ 3.27	9.74
Options canceled	177,350		(25,683)		$11.69
Options exercised	-		(2,000)	$   3	$ 1.80
Balance as of March 31, 2008	136,500	-	761,952	$ 34	$ 5.63	8.35
Exercisable as of March 31, 2008			297,252	$ 34	$ 9.17	6.38
_______________________________
Footnote: (1)  The aggregate intrinsic value represents the total pretax intrinsic value, based on the Company’s closing stock price of $7.27 as of March 31, 2006, $4.92 as of March 31, 2007and $2.85 as of March 31, 2008 and on the dates options were granted or exercised, which would have been received by the option holders had all option holders exercised their options as of that date, including only those options that are in-the-money.

F-13

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

In April 2006, the Company granted a total of 23,370 shares of restricted stock to eleven members of its senior management team as stock awards under the Company’s 2000 Long Term Incentive Plan.  Each stock award was limited in amount at the time of grant to 25% of the grantee’s target incentive bonus for the Company’s 2007 fiscal year.  Under the terms of these restricted stock awards, the grantee had to be an active employee on April 30, 2007 and achieve a performance condition that was based upon certain gross profit margin targets that the Company established for the year ended March 31, 2007.  As of March 31, 2007, none of the performance targets were met and, as a result, all 23,370 shares granted under these stock awards were forfeited and the shares cancelled.

The weighted average grant date fair value of options granted during the fiscal years ended March 31, 2008, 2007, and 2006   was $4.13 per share, $3.75 per share, and $5.00 per share, respectively.  The total intrinsic value of options exercised during the fiscal years ended March 31, 2008, 2007, and 2006 was $3, $13, and $147, respectively.

As of March 31, 2008, there was $866 of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted average period of 2.3years.  The total fair value of stock options vested during the fiscal years ended March 31, 2008, 2007, and 2006 was $153, $118, and $1.7 million, respectively.

The Company estimated the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model, which is impacted by the Company’s stock price as well as assumptions regarding several subjective variables including the Company’s expected stock price volatility over the term of the awards, actual and projected employee option exercise experience, the risk free interest rate and expected dividends.  The estimated expected term of options that have been granted was based on historical option exercise trends.  Estimated volatility was based on historical volatility over the expected term and the risk free interest rate was based on U.S. Treasury Bills similar to the expected term.  The expected dividend yield was based on the Company’s experience with paying dividends over the past 12 months.  The Company is also required to estimate forfeitures at the time of the grant and to revise these estimates in later periods if actual forfeitures differ from those estimates.  Historical data was used to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

The per share weighted average exercise price of stock options granted during 2008, 2007, and 2006 was $3.27, $5.17, and $6.72, respectively, on the date of grant using the Black-Scholes option pricing model, with the following assumptions:

	Years Ended March 31,
	2008	2007	2006
Expected dividend yield	1.78-2.29%	1.12-1.32%	1.19%
Risk free interest rate	2.88-4.65%	4.76-5.05%	4.32-4.79%
Expected volatility	79.00-87.05%	88.29-90.36%	96.34%
Expected life	7.34-8.40years	6.46-7.19 years	6.42 years

As of March 31, 2008, the range of exercise prices and weighted average remaining contractual life of options outstanding and exercisable was as follows:

		Options Outstanding				Options Exercisable
	Range of exercise prices	Number of outstanding as of March 31, 2008	Weighted average remaining contractual life(years)		Weighted average exercise price	Number exercisable as of March 31, 2008		Weighted average exercise price
$	1.50 - 1.63	9,117	2.6	$	1.56	9,117	$	1.56
$	1.64 - 1.80	20,335	4.0		1.75	20,335		1.75
$	1.81 - 4.87	454,700	9.6		3.30	15,000		4.53
$	4.88 - 5.17	60,000	8.2		5.02	40,000		5.06
$	5.18 - 8.30	50,000	7.7		7.27	45,000		7.41
$	8.31 - 12.34	167,800	6.0		12.34	167,800		12.34
		761,952	8.4	$	5.63	297,252	$	9.16

The Company has also reserved 32,667 shares of its common stock for issuance to employees or prospective employees at the discretion of the Board of Directors of which 16,033 shares are available for future issue.  There were no such shares issued during the years ended March 31, 2008, 2007, or 2006.

F-14

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(8)  Leases

The Company leases the land on which its operating facility is located in Clearwater, Florida.  This operating lease was for a period of 20 years through August 2001 with options to renew for two additional ten-year periods.  The Company utilized the first ten-year option and extended the lease through August 2011.  The lease provides for rent adjustments every five years.  The Company is responsible for payment of taxes, insurance and maintenance.  In the event the Company elects to terminate the lease, title to all structures on the land reverts to the lessor.

The Company's subsidiary leases its operating facility in Honduras.  The initial operating lease was for five years through February 2002, and since then, has been extended on a yearly basis through March 2009.

Future minimum lease payments under non-cancelable operating leases as of March 31, 2008 are: 

Year ending March 31,
2009	$	217
2010		35
2011		35
Thereafter		15
Total minimum lease payments	$	302

Rental expense for all operating leases was approximately $261 in 2008, $254 in 2007, and $275 in 2006.

(9)  Major Customers

The Company operates in one business segment - the design, development, manufacture and marketing of electronic control and measurement devices for the distribution of electric power.  The Company only reports sales and standard gross profit by market (commercial and military), no allocations of manufacturing variances and other costs of operations or assets are made to the markets.  Sales by market are:

		Years ended March 31,
		(In thousands)
Customer		2008	2007	2006
U.S. Military (direct sales)	$	6,400	3,623	6,110
DRS Technologies, Inc., a U.S. Government Prime Contractor		6,986	7,000	6,425
Total revenues for major customers	$	13,386	10,623	12,535
Exports:
Africa	$	1	2	-
Australia		1	9	1
Canada		62	243	24
Europe		1,921	2,866	2,080
Far East		2,189	5,146	10,598
Mexico		526	639	556
Middle East		17	29	3
South America		13	22	583
Total exports	$	4,730	8,956	13,845

(10)  Benefit Plan

The Company's 401(k) plan covers all employees with three months of service who are at least 21 years old.  The Company matches employee contributions dollar-for-dollar up to $400.  Total Company contributions were approximately $23 in 2008, $30 in 2007, and $27 in 2006.

F-15

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(11)  Litigation

On December 29, 2006, the Company entered into a Settlement Agreement with Tower Manufacturing Corporation (“Tower”).  Under the Settlement Agreement, the civil actions filed by both the Company and Tower, including Fedders Corporation, were dismissed. Under the terms of the Settlement Agreement, Tower agreed to pay $3.2 million over a two year period. The settlement is included in other income in the fiscal 2007 consolidated statement of operations.  The Company and Tower have also entered into a cross licensing agreement of the patents that were the subject of the lawsuits for the period they remain valid and enforceable. 

On February 16, 2007, Shanghai ELE Manufacturing Corporation (“ELE”) filed a declaratory judgment action against the Company in the Central District of California alleging that the Company’s United States Patent No. 6,292,337 (“the 337 patent”) is invalid and not infringed by ELE. The Company had previously written a letter to ELE requesting that they cease all infringing activity relating to the '337 patent.  On April 11, 2007, the Company filed a counterclaim against ELE  asserting that the patent is valid, that ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe the '337 patent. The Company is also seeking monetary damages against ELE for past infringement of the '337 patent. The '337 patent underlies the Company’s Fire Shield® technology for cord fire prevention. The Company filed a motion to transfer the ELE action to the United States District Court for the Middle District of Florida, where the Company is headquartered.  On May 18, 2007, Judge R. Gary Klausner granted the Company’s motion and transferred the action to the Middle District of Florida.  The Company is vigorously pursuing its claim of patent infringement against ELE in this new venue. 

The Company is involved in various claims and legal actions arising in the ordinary course of business.  In the Company's opinion, the ultimate disposition of these matters will not have a material adverse effect on its financial condition, result of operations or cash flows

(12)  Stock Repurchase Plan

On December 9, 1999, the Company’s board of directors approved a plan for the Company to buy back up to 500,000 shares of the Company stock on the open market.  Through the year ended March 31, 2008, the Company had repurchased 21,500 shares at a cost of $40.  On June 28, 2006, the Company's board of directors terminated the Company's stock repurchase program.

F-16

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

(13)  Selected Quarterly Financial Data (Unaudited)

Information (unaudited) related to operating revenue, operating income, net income and earnings per share, by quarter, for the years ended March 31, 2008 and 2007 are:

		First  quarter	Second  quarter	Third  quarter	Fourth  quarter
Year ended March 31, 2008:
Revenues	$	9,658	9,259	9,239	9,004
Gross profit		2,840	2,854	2,633	933
Income (loss) from operations		686	519	376	(1,444	)
Net income (loss)		483	401	356	(884	)
Basic earnings (loss) per share		.08	.07	.06	(.15	)
Diluted earnings (loss) per share		.08	.07	.06	(.15	)

		First  quarter	Second quarter		Third quarter	Fourth quarter
Year ended March 31 2007:
Revenues	$	10,615	9,705		8,818	8,854
Gross profit		2,429	1,966		2,363	1,865
Income (loss) from operations		64	(421	)	10	(1,029	)
Net income (loss)		20	(431	)	2,389	(495	)
Basic earnings (loss) per share		0.00	(0.07	)	0.41	(0.08	)
Diluted earnings (loss) per share		0.00	(0.07	)	0.40	(0.08	)

(14)  Acquisition

On April 28, 2006, the Company purchased a Recreational Vehicle (RV) product line business from Automated Engineering Corporation (“AEC”) and its underlying intellectual property owned by dB Technologies, Inc. and its founder, David Bailey.  The acquisition complements the Company’s existing RV business by allowing the Company to offer electrical safety solutions to a broader range of RV manufacturers.  The networking capabilities of the acquired product line business is intended to improve the Company's position in marketing electronic communications in recreational vehicles.  The acquisition has been accounted for under the purchase method of accounting, which results in recognition of approximately $599 in intangible assets. The purchase price consisted of:

Cash paid to seller	$279
Cash paid for acquisition costs	52
Common stock issued to seller, 51,679 shares	347
Total	$678

The common stock issued was valued at $6.72 per share based on the average of the closing prices during the 5 trading days surrounding the April 26, 2006 announcement of the acquisition.  An additional 22,148 shares of common stock have been issued on a contingent basis and are being held in escrow to be earned and released from escrow if post-acquisition sales of acquired RV products reach agreed upon targets through April 2009.  If all 22,148 contingent shares are earned, their value, based on the $6.72 average market value, would be $149.  The value of these shares will be calculated and added to the cost of the acquisition at the time they are earned and the value of the intangible assets will increase accordingly at such time.  As of March 31, 2008 no contingent shares have been earned.  The purchase price was allocated as follows:

F-17

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements

March 31, 2008, 2007, and 2006

(In thousands, except share data)

			Estimated useful lives
Inventories	$	79	N/A
Total tangible assets acquired		79
Intangible assets:
Developed technology		417	10 years
Patents		84	10 years
Purchased customer relationships		67	9 years
Trademarks		6	1 year
Covenant not-to-compete		8	5 years
In-process research and development		17	*
Total intangible assets acquired		599
Total	$	678
*  Written-off during the first quarter of fiscal 2007 and reported in research and development.

Total amortization expense related to the above for the fiscal year ended March 31, 2008 was $60.  It is estimated that amortization expense related to these intangible assets will amount to $59 for fiscal 2009 thru 2011, $58 for 2012 thru 2015, and $55 for 2016 and beyond.

The following unaudited pro-forma summary presents the consolidated results of operations of the Company as if the acquisition had occurred April 1, 2005.  This presentation is for informational purposes only and does not purport to be indicative of what would have occurred had the acquisition been made as of these dates or of results which may occur in the future.

		Years ended March 31,
		(In thousands)
		2007	2006
Revenues	$	38,043	46,022
Net income		1,464	1,768
Diluted earnings per share		0.25	0.30

(15)  Accrued Business Restructuring

In the fourth quarter of fiscal 2007, the Company recorded $138 of restructuring charges related to a reduction in workforce of 13 people representing approximately 12% of the U.S. workforce.  The charge included separation pay, severance pay, benefits payments and associated payroll taxes.  The workforce reduction was implemented to adjust the cost structure of the business to improve the Company’s competitive position.  The Company has experienced a significant decline in its RAC revenues necessitating reductions in costs.  Terminated employees with more than one year of service received severance benefits.

The following table summarizes the activity in the business restructuring accrual for fiscal 2007 and 2008:

Beginning balance as of April 1, 2006	$	-
Additions to accrual in March 2007		138
Less payments made in fiscal 2007		(25	)
Ending balance as of March 31, 2007	$	113
Less payments made in fiscal 2008		113
Ending balance as of March 31, 2008		-

F-18

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Schedule II

Valuation and Qualifying Accounts

Years ended March 31, 2008, 2007 and 2006

(In thousands, except share data)

			Additions
		Balance at	Charges to	Charged to		Balance
		beginning	costs	other	Deductions	at end of
Description		of period	and expense	accounts	(1)	period
Allowance for doubtful accounts:
Year ended March 31, 2008	$	273	69	-	219	123
Year ended March 31, 2007	$	78	261	-	66	273
Year ended March 31, 2006		172	38	-	131	78

(1) Write-offs, net of recoveries

F-19

EX-21

Exhibit 21

  Subsidiaries of Technology Research Corporation

The following companies are direct wholly owned subsidiaries of Technology Research Corporation:

	Name of Subsidiary	Jurisdiction of Incoporation
1.	Technology Research Corporation, Honduras S.A. de C.V	Honduras

EX-23

       Exhibit 23

  Consent of Independent Registered Public Accounting Firm

The Board of Directors

Technology Research Corporation:

We consent to incorporation by reference in the registration statement (No. 333-96975,

No. 333-110825, No. 333-131633 and No. 333-132006) of Form S-8 of Technology

Research Corporation of our report dated June 27, 2008, with respect to the consolidated

balance sheets of Technology Research Corporation and subsidiary as of March 31, 2008

and 2007, and the related consolidated statements of operations, stockholders' equity and

cash flows for each of the years in the three-year period ended March 31, 2008, and the

related financial statement schedule, which report appears in the March 31, 2008, annual

report on Form 10-K of Technology Research Corporation.

Our report dated June 27, 2008, contains an explanatory paragraph regarding the adoption

of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment.

/s/  KPMG LLP

June 27, 2008

Tampa, Florida

Certified Public Accountants

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Owen Farren, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the year ended March 31, 2008 of Technology Research Corporation;
2.	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;
3.	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;
4.	The registrant'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)) for the registrant and have:
		a.	Designed such disclosure controls and procedures, or caused 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;
		b.	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;
		c.	Evaluated the effectiveness of the registrant'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
		d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		a.	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's ability to record, process, summarize and report financial information; and
		b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

DATE:   June 27, 2008	/s/ Owen Farren
	Owen. Farren
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

EX-32.1

 

Exhibit 32.1

EX-32.2

 

Exhibit 32.2