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, 2009

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 30, 2008, was $11,591,232 based upon the $2.16 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 June 11, 2009, 5,890,828 shares of the registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's definitive proxy statement related to its 2009 Annual Meeting of Stockholders to be held on August 6, 2009  are incorporated by reference into Part II, Item 5 and 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 Consolidated 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, 2009, March 31, 2008 and March 31, 2007.

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 operating 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 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.

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, Thomas G. Archbold, at our mailing address of 5250 - 140th Avenue North, Clearwater, Florida 33760, telephone (727) 535-0572.

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

Year ended March 31,		Commercial	%		Military	%		Royalties	%		Total
2009	$	18,582	55.1	$	14,674	43.5	$	477	1.4	$	33,733
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

Our backlog of unshipped orders as of March 31, 2009 was approximately $15.2 million, as compared to approximately $8.6 million as of March 31, 2008.  This backlog consists of approximately 9% of commercial product orders and approximately 91% of military product orders, all of which are expected to ship within the year ended March 31, 2010.  The increase in backlog is principally due our prime military customer releasing full calendar year orders prior to the closing of our fiscal year.  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, although our military backlog is generally non-cancellable.  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). 

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.   

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 (“RAC”) market were again lower in fiscal 2009 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 2010, we expect to see further declines in our RAC 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 have introduced the Surge Guard Automatic Transfer Switch, which incorporates a transfer switch into the functionality of our Surge Guard products, thus eliminating the need for two separate products. 

In December 2008, we introduced the 30 Amp and 50 Amp Surge Guard RV Voltage Regulators to our recreational vehicle power protection product line. The Surge Guard Voltage Regulators are intended for use with RVs to provide a reliable source of power when experiencing low RV park input voltage. This product will automatically and continually monitor line voltage conditions and boost voltage to an acceptable level to help prevent low voltage damage to the RV’s appliances and electronic devices.  The Surge Guard Voltage Regulators will be sold exclusively at Camping World stores nationwide until August 2009.  We expect considerable sales to other RV retailers and catalogers after August.

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 and products they manufacture.  The OEM equipment can be for commercial, industrial or military applications, but is usually application specific in nature.  In addition to these applications, we are enhancing our line of Recreational Vehicle (RV) power-type products to include more sophisticated devices through new and existing channels. We have developed a power management system architecture that uses a new RVIA approved protocol called RV-C that can be used for power management of lighting, transfer switches, room slide-outs, pumps, awnings security features, diagnostics and other user information. We are scheduled for our first system implementation in June 2009. We also developed and introduced new RV aftermarket products including a Voltage Regulator and a Plastic Lock Hasp.

During the past year we have improved our engineering capabilities by hiring additional engineers with advance capabilities in electronics simulation, firmware and mechanical engineering. We have also introduced new tools for mechanical simulation and finite element analysis, electronics modeling simulation, vibration testing and an advanced documentation database.

In addition to our focus on new product development, we continue to look at ways to reduce cost and improve the value proposition to our customers with our existing products. We are currently redesigning the critical components in our GFCI products to reduce cost and increase quality and reliability.

We spent $2.4 million, $1.9 million and $2.0 million in fiscal 2009, 2008 and 2007, respectively, on research, development and engineering activities, and we anticipate spending levels at approximately 7% of revenue in fiscal 2010.  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. These electrical distributors include branches of major chains as well as smaller independent distributors. Catalogers range from safety to industrial and electrical suppliers. 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.  Our major retail customers include Wal-Mart, Home Depot, Meijers, 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. We are now one of Camping World’s top 30 suppliers.

In fiscal 2009, 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. In turn, this helps drive our revenue through retailers.

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 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. 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.

An important change in OSHA Regulations in 2007 broadened the requirements for using portable GFCIs in most industries. This new regulation extends GFCI use requirements for the first time to OSHA’s General Industry category of businesses which cover most of the rest of U.S. industry with the exception of agriculture, mining and maritime. Now, in order to comply with OSHA Regulations, a great deal of maintenance, remodeling or repair activities involving buildings, structures or equipment must be done with workers using GFCI protected equipment.  Our sales personnel and representative organizations are finding a significant amount of new opportunities for sales of the Company’s Shock Shield® and TRC Power products to industrial supply distributors. Other distribution channels catering to buyers of equipment and supplies throughout U.S. industry are also being targeted.

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 and provide the best return on investment to us.

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 U.S. 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 $ 10.3 million in fiscal 2009 and $7.0 million in both fiscal 2008 and 2007.  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%, and decreased to $3.5 million in 2009.  Military revenue, other than to DRS and direct sales to the U.S. military, were $.9 million in fiscal 2009, up from $.8 million in fiscal 2008, an increase of 18%, while they were $.9 million in 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 U.S. 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. We are active in new UL, NEMA, IEC and RVIA standard creation.

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.

In March, 2009, our manufacturing facility in Clearwater, Florida successfully completed the initial certification audit under ISO 9000:2008 and was recommended by the auditor for certification. This certification was issued on May 14, 2009.

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 products, no U.S. income taxes incurred for any profits generated by the subsidiary, and various other benefits.

We utilize our subsidiary in Honduras 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 U.S. 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 December 29, 2006, we entered into a Settlement Agreement with Tower Manufacturing Corporation (“Tower”).  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.  We received our final payment  from Tower under the Settlement Agreement in January, 2009.

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 it cease all infringing activity relating to our '337 patent.  On April 11, 2007 we filed a counterclaim against ELE asserting that the patent is valid and that ELE's Leakage Current Detectors and Interrupters (“LCDIs”), among other things, infringe our '337 patent.  We also sought monetary damages against ELE for past infringement of the '337 patent.  The '337 patent underlies our Fire Shield® technology for cord fire prevention.   

On August 4, 2008, we entered into a Settlement Agreement with ELE.  Under the Settlement Agreement, the civil action involving TRC and ELE was dismissed.  As part of the Settlement Agreement, we entered into a cross-licensing arrangement with ELE for our ‘337 patent and ELE’s Chinese patents Nos. ZL200420096315.2, ZL 200520118736.5 and ZL200520118737.X for the period such patents remain valid and enforceable. The parties agreed to make payments to each other for sales of products made prior to July 1, 2008, thereby resulting in us receiving a net payment from ELE as part of the terms of the confidential Settlement Agreement. Under this licensing arrangement, we will receive royalty payments for periods beginning after June 30, 2008, based on the number of designated ELE Leakage Current Detector Interrupter Products sold.

Major Customers and Exports

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

		Years ended March 31,
		(In thousands)
Customer		2009	2008	2007
U.S. Military (direct sales)	$	3,517	6,400	3,623
DRS Technologies, Inc., a U.S. Government Prime Contractor		10,251	6,986	7,000
Total Revenue for major customers	$	13,768	13,386	10,623
Exports:
Africa	$	1	1	2
Australia		2	1	9
Canada		63	62	243
Europe		2,000	1,921	2,866
Far East		1,548	2,189	5,146
Mexico		125	526	639
Middle East		28	17	29
South America		27	13	22
Total exports	$	3,794	4,730	8,956

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 2009, military revenue was approximately 44% of total revenue, compared to approximately 38% in fiscal 2008 and 30% in fiscal 2007.  In fiscal 2009 year to year direct sales to the U.S. military decreased approximately 45%, sales to DRS increased approximately 47%, and overall, military revenue increased approximately 3% from fiscal 2008 to fiscal 2009.  When comparing fiscal 2008 with fiscal 2007, 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 revenue increased approximately 26%.  Direct U.S. military revenue accounted for approximately 10% of our total revenue while DRS accounted for approximately 30% of our total revenue for fiscal 2009, as compared to approximately 17% and 19%, respectively, for fiscal 2008, and approximately 10% and 18%, respectively, for fiscal 2007.

Our exports were down approximately 21% in fiscal 2009, 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 our 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 our 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 by the U.S. Department of Defense 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, 2009, we employed 92 persons on a full time basis at our headquarters in Clearwater, Florida and 281 persons at our subsidiary in Honduras.  Due to the seasonality of portions of our business and the production requirements placed on our facility in Honduras, 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: 

Our growth is subject to a number of economic risks.  As widely reported, financial markets in the United States, Europe and Asia have been experiencing extreme disruption in recent months, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. Governments have taken unprecedented actions intended to address extreme market conditions that include severely restricted credit and declines in real estate values. While currently these conditions have not impaired our ability to access credit markets and finance our operations, there can be no assurance that there will not be a further deterioration in financial markets and confidence in major economies. These economic developments affect businesses such as ours in a number of ways. The current tightening of credit in financial markets adversely affects the ability of customers and suppliers to obtain financing for significant purchases and operations and could result in a decrease in or cancellation of orders for our products and services. Our business is also adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, purchase of electrical safety equipment by consumers and businesses and military procurement.

Failure to achieve our operating strategy could negatively affect our revenue and profits.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 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. 

We rely on the availability of substantial working capital 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.

The unavailability of and cost increases in raw materials and components could negatively affect our revenue and profits.  Raw materials and components constitute a significant portion of our cost of sales.  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 fluctuations in prices of plastic, as well as steel, aluminum and especially copper, which could continue in fiscal 2010.

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.

We depend upon a limited number of key suppliers.  We purchase a significant volume of products from contract manufacturers in China.  In fiscal 2009, for example, our purchases from Chinese vendors were more than $4 million but we expect this amount to decrease in fiscal 2010 as our RAC business has decreased and we have transferred some production to our facility in Honduras.  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 would adversely affect our revenue and profits.  We rely upon 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. Our largest customer accounted for 30% of our net revenue for the year ended March 31, 2009. Any reduction in, or cancellation of, orders placed by this customer would at least temporarily, and possibly longer, cause a material reduction in our net revenue, income from operations and net income. 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.

Our 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 unsalable products and possible inventory write-downs that could adversely affect our operating results.

Adverse changes in the operations of global manufacturing facilities could decrease our manufacturing capacity.  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 could disrupt our business.  Approximately 55% of our revenue is 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.

We depend upon our subsidiary in Honduras for a substantial portion of our manufacturing capacity. Managing a distant subsidiary and fully integrating it into our business is challenging. We rely on local supervising officers, managers and staff to carry out our manufacturing operations. The challenge of language differences and cultural factors involved in our operations can stretch our administrative capabilities.

We may not be able to adequately protect our intellectual property.  We believe that our rights in owned and licensed trademarks 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 trademarks 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.

The 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.

Our business can be adversely affected by 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 can impact our revenue.  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.

We face 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 are addressing certain of our business practices, which could lead to an increase in our costs.  In October 2008, we received approval from the U.S. government for our manufacturing license agreement between the Company and our Honduran subsidiary and we have begun to transfer work to our facility in Honduras. 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.

Our business may be affected by government contracting risks.  U.S. government contracts are subject to termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract. If terminated by the government as a result of our default, we could be liable for additional costs the government incurs in acquiring undelivered goods or services from another source and any other damages it suffers.  If we or one of our business units were charged with wrongdoing as a result of any U.S. government investigation (including violation of certain environmental or export laws), the U.S. government could suspend us from bidding on or receiving awards of new U.S. government contracts pending the completion of legal proceedings. If convicted or found liable, the U.S. government could subject us to fines, penalties, repayments and treble and other damages. The U.S. government could void any contracts found to be tainted by fraud. The U.S. government also reserves the right to debar a contractor from receiving new government contracts for fraudulent, criminal or other seriously improper conduct. Debarment generally does not exceed three years. Independently, failure to comply with U.S. laws and regulations related to the export of goods and technology outside the United States could result in civil or criminal penalties and suspension or termination of our export privileges.

Our ability to expand or revenue depends, in part, on 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.

We depend 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, and 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.

Our stock price has been volatile.  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.

Product liability and product recalls could harm our reputation, revenue and financial condition. We design and manufacture or have manufactured for use our standard products and we assemble these products for delivery to our customers. We also rely on component parts that are manufactured or distributed by other suppliers. In the event that a flaw or deficiency in such products or components is found, we could face product liability claims, recall efforts or we could voluntarily initiate a recall. If a flaw or deficiency in a product or component is discovered before any damages or injury occurs, we may need to initiate a product recall effort. Any such recall initiative could entail substantial costs and adversely affect our reputation, revenue and financial condition. To the extent that claims are brought for personal injury or property damages, we could incur liability for such damages and be required to compensate persons who have suffered injury.

Our business and results of operations could be impacted by the implementation of Sarbanes Oxley.  Under current rules, we were required to complete an assessment of the adequacy of internal control over financial reporting under Section 404 of the Sarbanes Oxley Act of 2002 as of March 31, 2009. 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 issue an attestation report on 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 us $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.  We received our final payment from Tower in January, 2009.

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 and that ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe our '337 patent.  We also sought monetary damages against ELE for past infringement of the '337 patent.  The '337 patent underlies our Fire Shield® technology for cord fire prevention.   

On August 4, 2008, we entered into a Settlement Agreement with  ELE.  Under the Settlement Agreement, the civil action involving TRC and ELE was dismissed.  As part of the Settlement Agreement, we entered into a cross-licensing arrangement with ELE for our ‘337 patent and ELE’s Chinese patents Nos. ZL200420096315.2, ZL 200520118736.5 and ZL200520118737.X for the period such patents remain valid and enforceable. The parties agreed to make payments to each other for sales of products made prior to July 1, 2008, thereby resulting in us receiving a net payment from ELE as part of the terms of the confidential Settlement Agreement. Under this licensing arrangement, we will receive royalty payments for periods beginning after June 30, 2008, based on the number of designated ELE Leakage Current Detector Interrupter Products sold.

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, 2009.

ITEM 4a.  EXECUTIVE OFFICERS OF REGISTRANT

Executive Officers

Set forth below is information related to our executive officers and their ages as of March 31, 2009.

Name	Age	Position
Owen Farren	58	Chairman of the Board, President and Chief Executive Officer
Raymond B. Wood	74	Senior Vice President and Director of Government Operations and Marketing
Thomas G. Archbold	49	Vice President of Finance and Chief Financial Officer
J. Bradley Freeman	45	Vice President of Operations
Douglas B. Tilghman	47	Vice President of Engineering

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 TRC 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.

Thomas G. Archboldwas appointed, effective as of November 17, 2008, our interim Chief Financial Officer and interim Principal Accounting Officer.  Prior to joining TRC in October 2008, Mr. Archbold served as a consultant to Taylor White Specialized Staffing Services, Inc., an accounting and financial placement servicing firm. Effective as of December 15, 2008, our Board approved the appointment of Mr. Archbold as our Vice President of Finance and Chief Financial Officer.  From April 2004 to August 2007, Mr. Archbold served as Chief Financial Officer of HMS Holdings Corp. (NASDAQ:HMSY), a publicly held provider of cost management services for government sponsored health and human services programs.  From August 2002 to April 2004, Mr. Archbold served as Controller of HMS Holdings Corp.  Mr. Archbold began his career with Ernst & Young (1982-1991) where he served as a Senior Manager.  Mr. Archbold received a BS in Professional Accountancy from CW Post College in 1982.

J. Bradley Freeman joined TRC in April 2008 as our Vice President of Operations and has been an executive officer of TRC since August 2008.  Prior to joining TRC, he held the position of Vice President of Operations at R2 Technology, a medical device manufacturer.  His responsibilities at R2 included supply chain management, operations, customer service and information technologies.  Prior to R2, he worked at Siemens Medical, Ultrasound Division from April 2000 until April 2005, where he held positions as Chief Information Officer and Vice President of Strategic Purchasing.  Mr. Freeman holds a BS in Political Science from Florida State University.

Douglas B. Tilghman joined TRC in October 2007 as our Vice President of Engineering and has been an executive officer of TRC since August, 2008.  With over 22 years of experience in electronics hardware and firmware, he most recently was Director of Engineering at both Laird Technologies (electromagnetic shielding) and S. L. Waber/S. L. Industries (surge protection).  Mr. Tilghman also spent 3 years as a full time Professor of Electrical Engineering at Lehigh Carbon Community College and as an Adjunct BSET Coordinator/Professor for Temple University.  Prior to this, he spent five years with General Electric and served  as a Project Leader and AFCI Program Manager at GE’ Circuit Breaker division. Mr. Tilghman is a graduate of GE Crotonville’s school for New Managers.  He also spent six years with Deltech/Ingersol Rand as a Design Engineer for embedded control systems for large compressed air equipment.  Mr. Tilghman holds an AASEE, BSEE, MS-Engineering Management/EE and is pursuing a Ph.D. in Engineering Management.

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, 2009 and 2008, 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, 2009:
First quarter	$	3.31	2.48	$	0.02
Second quarter		2.69	1.00		0.02
Third quarter		2.15	1.45		0.02
Fourth quarter		2.15	1.32		0.02
				$	0.08
March 31, 2008:
First quarter	$	5.65	4.01	$	0.02
Second quarter		4.95	3.08		0.02
Third quarter		3.92	3.13		0.02
Fourth quarter		3.67	2.62		0.02
				$	0.08

As of May 29, 2009, the approximate number of stockholders of record was 299.  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 2,470 stockholders.

Our authorized capital stock, as of May 29, 2009, 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 years 2009 and 2008 we paid a quarterly cash dividend of $.02 per share or $.08 annually.   In fiscal 2007, we paid annual dividends of $.075 per share.

Securities Authorized for Issuance Under Equity Compensation Plans

Information with respect to this item may be found under the caption “Equity Compensation Plans” in our definitive proxy statement to be delivered to stockholders in connection with our 2009 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, 2009 or 2008.  On June 28, 2006, the Board of Directors terminated the Stock Repurchase Program.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated balance sheet data as of March 31, 2009 and 2008 and operating results for the years ended March 31, 2009, 2008, and 2007 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, 2007, 2006 and 2005 and operating results for the years ended March 31, 2006 and 2005 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,
		2009		2008		2007			2006			2005
						(In thousands)
Revenue	$	33,733		37,160		37,992		45,620			39,433
Cost of sales		22,266		27,900		29,368		34,978			29,618
Gross profit		11,467		9,260		8,624		10,642			9,815
Operating expenses		9,907		9,123		10,000		7,922			7,172
Income (loss) from operations		1,560		137		(1,376	)	2,720			2,643
Interest expense		(10	)	(75	)	(182	)	(255		)	(48		)
Other income		590		182		3,264		32			29
		580		107		3,082		(223		)	(19		)
Income before income taxes		2,140		244		1,706		2,497			2,624
Income tax expense		500		(112	)	244		746			1,378
Net income	$	1,640		356		1,462		1,751			1,246
Earnings per share:
Basic	$	0.28		0.06		0.25		0.30			0.22
Diluted	$	0.28		0.06		0.25		0.30			0.21
Shares outstanding:
Basic		5,891		5,889		5,884		5,786			5,755
Diluted		5,897		5,958		5,907		5,834			5,954
Consolidated Balance Sheet Data:
Cash and cash equivalents and short-term  investments	$	6,950		3,627		3,969		3,107			1,302
Working capital		18,003		15,734		16,032		15,393			13,602
Total assets		25,479		24,950		28,279		29,144			32,177
Long-term debt		-		-		2,000		2,000			2,350
Total debt		-		-		3,000		3,000			5,350
Total stockholders' equity		21,481		19,889		19,725		18,158			16,440
Cash dividends paid		0.08		0.08		0.075		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 we qualify 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 2009, our revenue decreased $3.4 million or 9.2 %, as compared with fiscal 2008.  Our commercial business decreased $4.1 million to $18.6 million in fiscal 2009 from $22.7 million in fiscal 2008 due to a continued decline in our RAC business and the impact of the recession on several of our major markets, including RV and industrial construction. Royalty income increased to $.5 million from $.3 million. Our military business increased $0.5 million or 3.7% from the prior year.  Our gross profit in fiscal 2009 increased $2.2 million to $11.5 million from $9.3 million in the prior year. The increased margin is principally due to the prior fiscal year gross margin including a $2.0 million write down in inventory and loss on purchase commitments and the current year including a $0.6 million gain on the disposition of this inventory and settlement of purchase obligations with one of our contract manufacturers. After adjusting the gross margins in fiscal 2009 and 2008 for these items, gross margin as a percentage of revenue increased to 32.1% from 30.2% in the prior year principally due to the revenue mix between military and commercial business. Operating expenses increased $0.8 million from fiscal 2008 levels, largely due to higher professional fees, increased military marketing expense and increased research and development expenses.  Other income, net, increased $0.5 million from income of $0.1 million to income of $0.6 million primarily as the result of payments received as part of a legal settlement.

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 revenue 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 revenue.  Royalty revenue is recognized when reported by licensees.  

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. 

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.

 Results of Operations

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

	2009	2008	2007	2006	2005
Revenue:
Commercial	55.1%	61.0%	69.7%	70.7%	68.5%
Military	43.5%	38.1%	30.3%	29.3%	31.1%
Royalties	1.4%	0.9%	-	-	0.4%
Total Revenue	100.0%	100.0%	100.0%	100.0%	100.0%
Cost of sales	66.0%	75.1%	77.3%	76.7%	75.1%
Gross profit	34.0%	24.9%	22.7%	23.3%	24.9%
Operating expenses:
Selling and marketing	8.6%	7.4%	7.6%	5.8%	6.5%
General and administrative	13.7%	12.0%	12.8%	7.3%	6.5%
Research and development	7.1%	5.1%	5.3%	4.3%	5.2%
Business restructuring charges	-	-	0.4%	-	-
Other	-	-	0.2%	-	-
Total operating expenses	29.4%	24.6%	26.3%	17.4%	18.2%
Income (loss) from operations	4.6%	0.4%	(3.6)%	5.9%	6.7%
Interest expense	0.0%	(0.2)%	(0.5)%	(0.6)%	(0.1)%
Other income	1.7%	0.5%	8.6%	0.1%	0.1%
	1.7%	0.3%	8.1%	(0.5)%	-
Income before income taxes	6.3%	0.7%	4.5%	5.4%	6.7%
Income tax expense (benefit)	1.5%	(0.3)%	0.6%	1.6%	3.5%
Net income	4.9%	1.0%	3.9%	3.8%	3.2%

 Fiscal 2009 and 2008 Comparison

Revenue for fiscal 2009 decreased $3.4 million, or 9.2% to $33.7 million from $37.2 million for the prior fiscal year.  Commercial revenue decreased $4.1 million to $18.6 million from $22.7 million. Royalty income increased to $.5 million from $.3 million. Military revenue increased $0.5 million or 3.7% to $14.7 million from $14.2 million in fiscal 2008.  The recent extreme volatility and disruption of financial markets in the United States, Europe and Asia and depressed conditions in the real estate market have all contributed to weakening worldwide economic conditions and have contributed to a reduction in revenue in our commercial business. The decline in commercial revenue was principally a result of a continuing decline in RAC revenue due to competition from off-shore, low-cost manufacturers and the impact of the recession on several of our major markets, including RV and industrial construction.  The increase in military revenue was attributable to increased demand after supplemental government funding became available during the current fiscal year.  

Gross profit increased $2.2 million to $11.5 million for fiscal 2009 from $9.3 million for fiscal 2008.  The higher fiscal 2009 gross profit was primarily due to a fiscal 2008 write-down of inventory to lower of cost or market and a loss on purchase commitments in total amounting to $2.0 million resulting from the steep decline in demand for RAC products.  Additionally, in fiscal 2009, we recognized a $0.6 million gain on the disposition of this inventory and settlement of purchase obligations with one of our contract manufacturers. Gross profit as a percentage of revenue increased 9.1 percentage points from 24.9% in fiscal 2008 to 34.0% in fiscal 2009 primarily due to the items previously discussed. After adjusting the gross margins in fiscal 2009 and 2008 for these items, gross margin as a percentage of revenue increased to 32.1% from 30.2% in the prior year principally due to the revenue mix between military and commercial business.

Selling and marketingexpense of $2.9 million in fiscal 2009 increased $.1 million or 5.2% from $2.8 million in fiscal 2008.  The $.1 million increase from the prior year was primarily due to an increase in military marketing.  Selling and marketing expense as a percent of revenue increased to 8.6% of revenue from 7.4% in fiscal 2008 principally due to the significant decrease in commercial revenue.  We expect selling and marketing expense to decrease approximately $0.2 million in fiscal 2010. 

General and administrative expense increased $.1 million or 3.2% to $4.6 million for fiscal 2009 from $4.5 million in the prior year.  The increase from the prior year was principally due to increased professional fees and obligations incurred from the retirement of our Chief Financial Officer and increased professional fees. General and administrative expense as a percent of revenue increased  from 12.0% in fiscal 2008 to 13.7% in fiscal 2009 primarily due to the increase in general and administrative expenses discussed above and the lower revenue in fiscal 2009.

Research and development expense of $2.4 million increased 25.1% in fiscal 2009 from $1.9 million in fiscal 2008. Research and development expense as a percent of revenue increased to7.1% from 5.1 % in the prior year. The increase in research and development expense from the prior year period is primarily due to an increased headcount in engineering development and consulting related expenses as we added resources to improve our engineering expertise. We expect research and development expense to increase approximately $0.2 million in fiscal 2010.

Other income (expense), net was $0.6 million of income in fiscal 2009 versus $0.1 million of income in fiscal 2008, an increase in income of $0.5 million.  The increase in other income was primarily attributable to payments received as part of a legal settlement. In addition, interest expense declined from the prior year due to the repayment of all borrowings in fiscal 2008.

Income tax expense increased $.6 million to $.5 million from a benefit of $.1 million in fiscal 2008. The increase was due to lower income in fiscal 2008 as well as the jurisdictional source where the income was earned.  Our 2008 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 23.4% in fiscal 2009, compared with (45.9) % in fiscal 2008. 

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 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.   

Net income was $1.6 million for fiscal 2009, compared with $0.4 million reported in fiscal 2008, an increase of $1.2 million. Gross profit in fiscal 2009 was $2.2 million higher than fiscal 2008 and other income was $0.5 million higher than the prior year, but these income increases were partially offset by an increase in operating expenses of $0.8 million.

 Fiscal 2008 and 2007 Comparison

Revenue 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 revenue.  Military revenue 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 revenue due to competition from off-shore, low-cost manufacturers.  The increase in military revenue was attributable to increased demand after government funding became available near the end of the prior fiscal year.  

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 revenue increased 2.2% from 22.7% in fiscal 2007 to 24.9% in fiscal 2008.  This increase in gross profit as a percent of revenue is also primarily due to the change in sales mix.

Selling and marketingexpense of $2.8 million, or 7.4% of revenue, decreased $.1 million in fiscal 2008 from $2.9 million or 7.6% of revenue 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 revenue decreased .2% principally due to the $.1 million decrease in selling and marketing expenses.   

General and administrative expense declined $.4 million or 7.9% of revenue to $4.5 million or 12.0% of revenue 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 revenue 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 revenue in fiscal 2008 declined $.1 million from $2.0 million, or 5.3% of revenue in fiscal 2007.  

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 revenue.  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.  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.   

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.

 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, revenue 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 revenue is 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 revenue 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 revenue.  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).  A write-down is established for inventory that has had no activity for long periods of time or for which management believes is no longer salable.  This write-down is reviewed and approved by the senior management team.  In the future, based on our quarterly analysis, if we estimate that any remaining write-down for obsolescence is inadequate , we may need to adjust it.  At present, based on our analysis, we believe the write-down amount 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 subsidiary in Honduras 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, 2009, our cash and cash equivalents increased $.8 million to $2.9 million from the March 31, 2008 balance of $2.1 million.  The three components of this increase were cash provided by operating activities of $2.6 million, cash used in investing activities of $1.3 million and cash used in financing activities of $.5 million.

Cash provided by operating activities primarily resulted from net income of $1.6 million, depreciation expense of $1.1 million, a decrease in trade and other accounts receivable of $1.0 million, a decrease in net deferred taxes of $.8 million and stock compensation expense of $.4 million, partially offset by a decrease in accounts payable of $1.8 million and a decrease in accrued expenses of $.4 million. The decrease in accounts receivable was primarily due to improved collections even though a major customer paid us $1.0 million on April 1, 2009.  The decrease in accrued expenses is primarily due to the settlement of purchase commitments accrued in 2008.  The increase in stock compensation expense reflects an increase in the number of options vesting during the period and new stock option grants made in 2009.  The decrease in net deferred tax assets reflect the decrease in temporary differences between book and tax deductible items, principally the inventory reserves and purchase commitments recorded in 2008.

Cash used in investing activities was due to cash of $1.5 million used to acquire short term investments along with cash of $.8 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 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 subsidiary in Honduras, and requires us to maintain certain financial ratios.  Our subsidiary in Honduras is no longer a borrower under the loan agreement.  As of March 31, 2009, we were in compliance with the covenants under our revolving credit agreement.  As of March 31, 2009 and 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 157”).  SFAS 157 establishes a single definition of fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements. In February 2008, FASB Staff Position No. 157-2, “Effective Date of FASB Statement No. 157” (FSP 157-2) was issued delaying the effective date of SFAS 157 until fiscal years beginning after November 15, 2008 with respect to nonfinancial assets and nonfinancial liabilities that are not re-measured at fair value on a recurring basis (at least annually). The partial adoption of SFAS 157 had no material effect on our financial condition, results of operations or cash flows.

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”).  We adopted the provisions of EITF No. 06-03 for the fiscal year beginning April 1, 2007, electing the net basis of reporting.  The implementation of EITF No. 06-03 had no material effect on our fiscal 2008 consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities (“SFAS 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.  On April 1, 2008, SFAS 159 first became effective for us. The implementation of SFAS 159 had no impact on our consolidated financial statements because we have not adopted the fair value option.

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. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently reviewing SFAS 141R’s requirements and are assessing the impact that SFAS 141R may have on our 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 160”).  SFAS 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 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, 2009, we did not have any minority interests.  The adoption of SFAS 160 is not expected to 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. We 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 our financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the requirements of SFAS 161 and have not yet determined the impact of adoption, if any, on our financial position, results of operations or cash flows.

Effective January 1, 2009, we adopted EITF Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards (“EITF 06-11”). EITF 06-11 requires companies to recognize a realized income tax benefit associated with dividends or dividend equivalents paid on non-vested equity-classified employee share-based payment awards that are charged to retained earnings as an increase to additional paid-in capital. The adoption of EITF 06-11 did not have a material impact on our financial position, results of operations or cash flows.

In June 2008, the FASB issued Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” as defined in EITF Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, and therefore such awards should be included in the earnings allocation in computing earnings per share using the two-class method as described in SFAS No. 128, Earnings per Share. According to FSP EITF 03-6-1, a share-based payment award is a participating security when the award includes nonforfeitable rights to dividends or dividend equivalents. The rights result in a noncontingent transfer of value each time an entity declares a dividend or dividend equivalent during the award’s vesting period. However, the award would not be considered a participating security if the holder forfeits the right to receive dividends or dividend equivalents in the event that the award does not vest. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. When adopted, the requirements are applied by recasting previously reported EPS. We are currently evaluating the requirements of FSP EITF 03-6-1 and have not yet determined the impact of adoption.

 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, 2009, 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 $40 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	F-1
Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2009 and 2008	F-2
Consolidated Statements of Income for the years ended March 31, 2009, 2008 and 2007	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2009, 2008 and 2007	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2009, 2008 and 2007	F-5
Notes to Consolidated Financial Statements	F-6 thru F-19
Consolidated Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts	F-20

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

None.

 ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure 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.

Changes in Internal Control over Financial Reporting

There have been no changes in internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

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, 2009.  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, 2009, our internal control over financial reporting was effective.

This Annual Report does not include an attestation report of our independent registered public accounting firm, KPMG LLP, regarding internal control over financial reporting.  Management’s report was not subject to attestation by our 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 2009 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 2009 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 2009 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 2009 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 2009 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 2009 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, 2009 and 2008	F-2
Consolidated Statements of Income for the years ended March 31, 2009, 2008 and 2007	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2009, 2008 and 2007	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2009, 2008 and 2007	F-5
Notes to Consolidated Financial Statements	F-6 thru F-19

(2) Financial Statement Schedules.

Schedule II - Valuation and Qualifying Accounts       F-20

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 dated May 26, 1981.  Filed herewith.
3.2	Amendment to Articles of Incorporation dated February 12, 1982.  Filed herewith.
3.3	Amendment to Articles of Incorporation dated September 2, 1983.  Filed herewith.
3.4	Amendment to Articles of Incorporation dated November 30, 1983.  Filed herewith.
3.5	Amendment to Articles of Incorporation dated June 13, 1984.  Filed herewith.
3.6	Amendment to Articles of Incorporation dated December 21, 1987.  Filed herewith.
3.7	Amendment to Articles of Incorporation dated September 24, 1990.  Filed herewith.
3.8	Amendment to Articles of Incorporation dated August 23, 1995.  Filed herewith.
3.9	Amended and Restated By-Laws, effective May 15, 2008.  Incorporated by reference to TRC's Form 8-K filed on May 21, 2008.
10.1	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, filed on June 27, 2002.
10.2	Change of Control Agreement between the Company and its Chief Financial Officer, Barry H. Black, dated January 23, 2006.  Incorporated by reference to TRC’s Form 10-Q for the period ended December 31, 2005, filed February 14, 2006. (1)
10.3	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 on June 20, 2007.
10.4	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, Technology Research Corporation Honduras/S.A. de C.V. as a co-borrower.  Incorporated by reference to TRC’s Form 8-K filed on January 30, 2008.
10.5	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 on January 30, 2008.
10.6	Security Agreement, dated December 27, 2007, between the Company and Wachovia Bank, N.A.  Incorporated by reference to TRC’s Form 8-K filed on January 30, 2008.
10.7	Form of Individual Director Indemnification Agreement.  Incorporated by reference to TRC’s Form 10-K for the year ended March 31, 2007, filed on June 29, 2007. (1)
10.8	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 on June 29, 2007. (1)
10.9	Form of 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 on June 29, 2007. (1)
10.10	Amended and Restated 2000 Long Term Incentive Plan effective August 27, 2008.  Incorporated by reference to TRC’s Form DEF 14A filed on July 21, 2008.
10.11	Separation Agreement and General Release with Barry Black dated September 2, 2008.  Incorporated by reference to TRC’s Form 8-K filed on September 3, 2008. (1)
10.12	Amendment No. 1 to Separation Agreement and General Release with Barry Black dated October 31, 2008.  Incorporated by reference to TRC’s Form 8-K filed on November 4, 2008. (1)
10.13	Settlement Agreement between Technology Research Corporation and Shanghai ELE Manufacturing Corporation.  Incorporated by reference to TRC’s Form 8-K filed on November 14, 2008.*
10.14	Restricted Stock Agreement - Employee.  Incorporated by reference to TRC’s Form 8-K filed on December 19, 2008.
10.15	Nonqualified Stock Option Agreement - Director.  Incorporated by reference to TRC’s Form 8-K filed on February 9, 2009.
10.16	Restricted Stock Agreement - Director.  Incorporated by reference to TRC’s Form 8-K filed on February 19, 2009.
10.17	Nominating and Governance Committee Charter.  Incorporated by reference to TRC’s Form 8-K filed on March 18, 2009.
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)  Management contracts and compensatory plans or arrangements required to be filed as an Exhibit pursuant to Item 15(b) of Form 10-K.

*Confidentialtreatment requested for certain portions of this exhibit, which portions are omitted and filed separately with the Securities and Exchange Commission.

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 15, 2009

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 Board of Directors, President and Chief Executive Officer	June 15, 2009
Owen Farren	(Principal Executive Officer)
/s/  Thomas G. Archbold	Vice President of Finance and Chief Financial Officer	June 15, 2009
Thomas G. Archbold	(Principal Financial and Accounting Officer)
/s/  Raymond B. Wood	Director and Senior Vice President of Government Operations	June 15, 2009
Raymond B. Wood
/s/  Gerry Chastelet	Director	June 15, 2009
Gerry Chastelet
/s/  Raymond V. Malpocher	Director	June 15, 2009
Raymond V. Malpocher
/s/  Patrick M. Murphy	Director	June 15, 2009
Patrick M. Murphy
/s/  N. John Simmons, Jr.	Director	June 15, 2009
N. John Simmons, Jr.
/s/  David F. Walker	Director	June 15, 2009
David F. Walker

Consolidated Financial Statements

 Index

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Financial Statements:
Consolidated Balance Sheets as of March 31, 2009 and 2008	F-2
Consolidated Statements of Income for the years ended March 31, 2009, 2008 and 2007	F-3
Consolidated Statements of Stockholders' Equity for the years ended March 31, 2009, 2008, and 2007	F-4
Consolidated Statements of Cash Flows for the years ended March 31, 2009, 2008 and 2007	F-5
Notes to Consolidated Financial Statements	F-6
Consolidated Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts	F-20

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, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 2009, 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.

/s/  KPMG LLP

June 15, 2009

Tampa, Florida

Certified Public Accountants

F-1

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Consolidated Balance Sheets

 March 31, 2009 and 2008

(In thousands, except share and per share data)

ASSETS		2009	2008
Current assets:
Cash and cash equivalents (note 5)	$	2,954	2,132
Short-term investments (note 5)		3,996	1,495
Trade and other accounts receivable, net of allowance for doubtful
accounts of $203 in 2009 and $123 in 2008 (note 5)		5,372	6,573
Other receivable - current portion		-	869
Income taxes receivable (note 6)		631	197
Inventories, net (notes 2 and 5)		8,013	7,788
Deferred income taxes (note 6)		622	1,446
Prepaid expenses and other current assets		265	258
Total current assets		21,853	20,758
Property, plant and equipment, net of accumulated depreciation of
$9,852 in 2009 and $11,604 in 2008 (note 3)		3,189	3,684
Intangible assets net of accumulated amortization of $178 in 2009 and $119 in 2008		404	463
Other assets		33	45
Total assets `	$	25,479	24,950

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$		1,309		3,111
Unsettled treasury obligation			998		-
Accrued expenses			1,422		1,781
Accrued dividends			121		132
Total current liabilities			3,850		5,024
Income taxes payable (note 6)			111		-
Deferred income taxes (note 6)			37		37
Total liabilities			3,998		5,061
Stockholders' equity (note 7):
Common stock $0.51 par value; 10,000,000 shares authorized, 5,912,328 shares issued and 5,890,828 shares outstanding	3,015         3,015
Additional paid-in capital		9,982					9,568
Retained earnings		8,524					7,346
Common stock held in treasury, 21,500 shares at cost			( 40	)		( 40		)
Total stockholders' equity			21,481			19,889
Total liabilities and stockholders' equity	$		25,479			24,950

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

F-2

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Consolidated Statements of Income

Years ended March 31, 2009, 2008 and 2007

(In thousands, except share and per share data)

		2009		2008		2007
Revenue (note 9):
Commercial	$	18,582		22,680		26,471
Military		14,674		14,152		11,521
Royalties		477		328		-
Total Revenue		33,733		37,160		37,992
Cost of sales		22,266		27,900		29,368
Gross profit		11,467		9,260		8,624
Operating expenses:
Selling and marketing		2,899		2,756		2,906
General and administrative		4,627		4,463		4,847
Research and development		2,381		1,904		2,026
Business restructuring charges		-		-		138
Other		-		-		83
Total operating expenses		9,907		9,123		10,000
Income (loss) from operations		1,560		137		(1,376	)
Interest expense		(10	)	(75	)	(182	)
Other income		590		182		3,264
		580		107		3,082
Income before income taxes		2,140		244		1,706
Income tax expense (benefit) (note 6)		500		(112	)	244
Net income	$	1,640		356		1,462
Earnings per share - basic	$	0.28		0.06		0.25
Earnings per share - diluted	$	0.28		0.06		0.25
Shares outstanding - basic		5,890,828		5,889,136		5,884,083
Shares outstanding - diluted		5,897,237		5,958,336		5,906,563

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, 2009, 2008 and 2007

(In thousands, except share and per share data)

					Additional								Total
	Common stock				paid-in		Retained			Treasury			stockholders'
	Shares		Amount		capital		earnings			stock			equity
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
Issuance of shares in connection
with acquisition (note 14)		51,679		26		321		-	-			347
Tax benefit related to exercise
of stock options		-		-		5		-	-			5
Exercise of stock options		10,000		5		47		-	-			52
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
Dividends - $0.08 per share		-		-		-		(462)	-			(462)
Net income		-		-		-		1,640	-			1,640
Stock compensation expense		-		-		414		-	-			414
Balances as of March 31, 2009		5,890,828	$	3,015		9,982		8,524	(40)			21,481

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, 2009, 2008 and 2007

(In thousands)

	2009			2008			2007
Cash flows from operating activities:
Net income	$	1,640			356	1,462
Adjustments to reconcile net income to net cash provided by operating  activities:
Accretion on short-term investments		(47	)		(17)	(17)
Bad debt expense		166			69			261
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		1,100			1,157	1,126
In-process research and development		-			-	17
Amortization of intangible assets		59			60	59
Stock compensation expense		414			278	144
Deferred income taxes		824			(549)	(649)
Loss on disposal of assets		156			-	83
Changes in operating assets and liabilities, net of effects of acquisition:
Trade and other accounts receivable		1,035			308	3,519
Inventories, net		(225)			1,506	418
Prepaid expenses and other current assets		(7)			93	(141)
Other assets		12			2	23
Trade accounts payable		(1,802)			84	(1,823)
Accrued expenses		(359)			372	86
Income taxes		(323	)		(1,043)	(622)
Net cash provided by operating activities		2,643			2,691	2,212
Cash flows from investing activities:
Maturities of short-term investments		6,500			2,000	1,309
Purchases of short-term investments		(7,956	)		(2,980)	(1,290)
Acquisition of business		-			-	(331)
Capital expenditures		(761	)		(429)	(682)
Proceeds from collection of notes receivable		869			850	-
Net cash used in investing activities		(1,348	)		(559)	(994)
Cash flows from financing activities:
Borrowings of short-term debt		2,200			-	3,000
Repayments of short and long-term debt		(2,200	)		(3,000)	(3,000)
Proceeds from the exercise of stock options		-			3	52
Tax benefit related to exercise of stock options		-			1	5
Cash dividends paid		(473	)		(475)	(411)
Net cash used in financing activities		(473	)		(3,471)	(354)
Net increase (decrease) in cash and cash equivalents		822			(1,339)	864
Cash and cash equivalents at beginning of year		2,132			3,471	2,607
Cash and cash equivalents at end of year	$	2,954			2,132	3,471
Supplemental cash flow information:
Cash paid for interest	$	10			76	124
Cash paid for income taxes		-			1,480	1,514
Supplemental schedule of noncash investment activities:
Purchase of short-term investments		(998	)		-	-
Unsettled Treasury obligation		998			-	-
The Company purchased a Recreational Vehicle product line business from Automated Engineering Corporation.  In conjunction 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, 2009, 2008, and 2007

(In thousands, except share and per 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, our products are designed to meet the needs of the consumer, commercial and industrial markets worldwide.  We also supply power monitors and control equipment to the United States military and its prime contractors, primarily for use on mobile electric generators. Our corporate headquarters are located in Clearwater, Florida.  We incorporated TRC Honduras, S.A. de C.V., a wholly owned subsidiary, for the purpose of manufacturing our high volume products in Honduras.  We primarily sell our 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. We perform credit evaluations of all new customers and generally do not require collateral.  Our customers are located throughout the world.  See note 9 for further information on major customers.  We also license our 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 our 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 $1,017 and $53 as of March 31, 2009 and 2008, respectively, and consisted of money market accounts.  For purposes of the consolidated statements of cash flows, we consider 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 $3,996 as of March 31, 2009, consisting of original cost plus accrued interest on U.S. Treasury Bills and included $998 for an unsettled purchase of a U.S. Treasury bill resulting in a matching liability being recorded in current liabilities. We consider all of our short-term investments to be held-to-maturity, and therefore, are recorded at amortized cost.

(f) 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, 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 Revenue is 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 Revenue 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. 

F-6

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

 March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

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 Revenue.  We have not experienced past losses on government contracts, and in fiscal 2009, 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 its customers were to worsen, additional write-offs could be required, resulting in write-offs not included in our current allowance for doubtful accounts.

(g)  Concentration of Credit Risk

We maintain most of our short-term investments in U.S. Treasury Bills. Our cash balances are in a bank participating in the Federal Deposit Insurance Corp. (FDIC) transaction account guarantee program and are fully insured.

We sell products to customers throughout the world and in many markets including retail, distribution, OEM, and directly to consumers.  Customers are reviewed for creditworthiness, and we maintain an allowance for anticipated losses.  We had one customer with an accounts receivable balance equal to more than 10% of total accounts receivable at the end of our fiscal 2009 year. 

One Far East contract manufacturer supplied us with 10% of our total inventory purchases in fiscal 2009. 

(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

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.

(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.

F-7

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

 Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

(l)  Stock-Based Compensation 

On April 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R), which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at fair value. We adopted SFAS 123R using the modified prospective application method under which the provisions of SFAS 123R apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the consolidated statement of income over the remaining service period after the adoption date based on the award’s original estimate of fair value. SFAS 123R requires the cash flows resulting from tax benefits recognized for those options (excess tax benefits) to be classified as financing cash flows.

Total share-based compensation expense recorded in the consolidated statements of income was $414, $278, and $144 for the years ended March 31, 2009, 2008, and 2007, respectively.

(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).

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

	Years ended March 31,
		2009	2008	2007
Net income	$	1,640	356	1,462
Weighted average shares outstanding - basic		5,890,828	5,889,136	5,884,083
Dilutive common shares issuable upon exercise of stock options		6,409	69,200	22,480
Dilutive unvested commons shares associated with restricted stock awards		-	-	-
Weighted average shares outstanding - diluted		5,897,237	5,958,336	5,906,563
Earnings per common share:
Basic	$	0.28	0.06	0.25
Diluted	$	0.28	0.06	0.25

For the fiscal years ended March 31, 2009, 2008 and 2007 options to purchase 930,001, 287,800 and 261,900 shares, respectively, were considered anti-dilutive for the purposes of calculating earnings per share.  In accordance with the contingently issuable shares provision of SFAS No.128 “Earnings per Share”, 106,999 shares of non-vested common stock awards (“restricted stock”) granted were not included in the calculation of basic earnings per share for the fiscal year ended March 31, 2009 because all necessary conditions for vesting have not been satisfied.

(n)  Recently Issued 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 157”).  SFAS 157 establishes a single definition of fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements. In February 2008, FASB Staff Position No. 157-2, “Effective Date of FASB Statement No. 157” (FSP 157-2) was issued delaying the effective date of SFAS 157 until fiscal years beginning after November 15, 2008 with respect to nonfinancial assets and nonfinancial liabilities that are not re-measured at fair value on a recurring basis (at least annually). The partial adoption of SFAS 157 had no material effect on our financial condition, results of operations or cash flows.

F-8

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

 Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

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”).  We adopted the provisions of EITF No. 06-03 for the fiscal year beginning April 1, 2007, electing the net basis of reporting.  The implementation of EITF No. 06-03 had no material effect on our fiscal 2008 consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities (“SFAS 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.  On April 1, 2008, SFAS 159 first became effective for us. The implementation of SFAS 159 had no impact on our consolidated financial statements because we have not adopted the fair value option.

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. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently reviewing SFAS 141R’s requirements and are assessing the impact that SFAS 141R may have on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”).  SFAS 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 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, 2009, we did not have any minority interests.  The adoption of SFAS 160 is not expected to 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. We 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 our financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We are currently evaluating the requirements of SFAS 161 and have not yet determined the impact of adoption, if any, on our financial position, results of operations or cash flows.

Effective January 1, 2009, we adopted EITF Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards (“EITF 06-11”). EITF 06-11 requires companies to recognize a realized income tax benefit associated with dividends or dividend equivalents paid on non-vested equity-classified employee share-based payment awards that are charged to retained earnings as an increase to additional paid-in capital. The adoption of EITF 06-11 did not have a material impact on our financial position, results of operations or cash flows.

In June 2008, the FASB issued Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” as defined in EITF Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, and therefore such awards should be included in the earnings allocation in computing earnings per share using the two-class method as described in SFAS No. 128, Earnings per Share. According to FSP EITF 03-6-1, a share-based payment award is a participating security when the award includes nonforfeitable rights to dividends or dividend equivalents. The rights result in a noncontingent transfer of value each time an entity declares a dividend or dividend equivalent during the award’s vesting period. However, the award would not be considered a participating security if the holder forfeits the right to receive dividends or dividend equivalents in the event that the award does not vest. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. When adopted, the requirements are applied by recasting previously reported EPS. We are currently evaluating the requirements of FSP EITF 03-6-1 and have not yet determined the impact of adoption.

F-9

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

(o)  Advertising Expenses

We account for advertising expenditures as expense in the period incurred.  For the fiscal years ended March 31, 2009, 2008, and 2007, advertising expenses were $204, $186 and $134, respectively.

(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. 

 (2)  Inventories

Inventories at March 31, 2009 and 2008 consist of the following:

		2009	2008
Raw materials	$	5,084	4,976
Work-in-process		766	663
Finished goods		2,163	2,149
Total	$	8,013	7,788

Approximately 42% and 51% of our inventories were located in Honduras as of March 31, 2009 and 2008, respectively.  In March 2008, we 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 loss on non-cancellable purchase commitments in fiscal 2008 were due to continued reduction in demand for RAC products.On August 20, 2008, we received $310 from one of our contract manufacturers in full and final settlement for the disposition of 310,000 kilograms of TRC’s FireShield® cable inventory and settlement of other purchase obligations.  During the year ended March 31, 2009, we recognized a gain of $637 resulting from the settlement of this FireShield® cable inventory disposition, the satisfaction of contract purchase obligations, and other inventory held with our contract manufacturer.  This gain is included in our cost of sales.

(3)  Property, Plant and Equipment

Property, plant and equipment as of March 31, 2009 and 2008 consist of:

		2009	2008	Estimated useful lives
Building and improvements	$	1,870	1,679	20 years
Machinery and equipment		11,171	13,609	5 - 15 years
		13,041	15,288
Less: Accumulated depreciation		9,852	11,604
	$	3,189	3,684

Approximately 32% and 37% of our property, plant and equipment was located in Honduras as of March 31, 2009 and 2008, respectively. During fiscal 2009, we identified assets no longer in service with a gross asset value of $3,009 and accumulated depreciation of $2,853 and recorded a loss on disposal of $156, which is recorded in cost of sales.

F-10

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

(4)  Warranty

We generally provide a one year warranty period for all of 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 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 our warranty liability, included in accrued expenses, for the fiscal years ended March 31, 2009, 2008, and 2007 is as follows:

	Years ended March 31,
	2009				2008			2007
Beginning balance	$	137		90			111
Warranty expense		151		152			67
Warranty claims		(124	)	(105		)	(88		)
Ending balance	$	164		137			90

 (5)  Debt

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 receivables, inventory, investments, demand deposit accounts maintained with our lender, and 65% of the voting stock of our subsidiary in Honduras and requires us to maintain certain financial ratios.  Our subsidiary in Honduras is no longer a borrower under the loan agreement.   As of March 31, 2009 and 2008, we had no borrowings on this credit agreement and the full $6 million is available. 

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

(6)  Income Taxes

Our effective income tax rate was 23.4%, (45.9) % and 14.3% for the years ended March 31, 2009, 2008, and 2007, 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 subsidiary in Honduras.  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, we adopted FASB Interpretation Number 48 (FIN 48), Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.  There was no effect recorded upon adoption and there were no unrecognized tax benefits as of March 31, 2007 and April 1, 2007.  As of March 31, 2009, we have unrecognized tax benefits of $127, of which $16 is included in income taxes receivable and $111 is included in noncurrent income taxes payable.  During fiscal 2009, we recorded $115 of unrecognized tax benefits primarily related to transfer pricing. Interest expense related to uncertain tax positions amounted to $3 and $1in fiscal 2009 and 2008, respectively. Total accrued interest at March 31, 2009 and 2008 was $7 and $4, respectively, and was included in income taxes receivable. There are no accrued penalties. After adoption of FIN 48, our policy is to recognize interest and penalties in the provision for income taxes.

F-11

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

A reconciliation of unrecognized tax benefits is as follows:

	2009	2008
Beginning balance	$     12	-
Additions based on tax positions
related to the current year	111	12
Additions for tax positions of prior years	4	-
	_____	____
Balance as of March 31	$   127	12

We file U.S. Federal and Florida income tax returns.  We have concluded an audit on all U.S. federal income tax matters through the fiscal 2004 year.  Federal and state income tax returns for fiscal years 2006 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, 2009 and 2008 are presented below:

	2009				2008
Deferred tax assets:
Accounts receivable, principally due to allowance for doubtful accounts	$	72		44
Inventories, principally due to a different cost basis for financial  reporting purposes and additional costs inventoried for tax purposes		288		1,224
Stock-based compensation		166		91
Net operating loss carryforward		20		-
Accrued expenses		166		156
Intangible assets, principally due to differences in amortization		51		20
Total gross deferred tax asset		763		1,535
Deferred tax liabilities:
Property, plant and equipment, principally due to differences in depreciation		(107)		(57		)
Prepaid expenses		(71	)	(69		)
Total gross deferred tax liability		(178	)	(126		)
Net deferred tax asset	$	585		1,409

 Net deferred tax asset included in the accompanying consolidated balance sheets as of March 31, 2009 and 2008 are as follows:

		2009		2008
Deferred income taxes, current asset	$	622	1,446
Deferred income taxes, noncurrent asset (liability)		(37)	(37		)
	$	585	1,409

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 we will realize the benefits of these deductible differences at March 31, 2009.

At March 31, 2009, we have net operating loss carryforwards for state income tax purposes of $533, which are available to offset future state taxable income through 2029.

F-12

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

Income tax expense (benefit) for the years ended March 31, 2009, 2008, and 2007 consists of:

		2009			2008			2007
Current:
Federal	$	(330	)	404			825
State		6		33			68
		(324	)	437			893
Deferred:
Federal		768		(518		)	(601		)
State		56		(31		)	(48		)
		824		(549		)	(649		)
	$	500		(112		)	244

Income tax expense (benefit) for the years ended March 31, 2009, 2008 and 2007 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:

		2009			2008			2007
Computed expected tax expense	$	728		83			580
Increase (reduction) in income taxes resulting from:
Foreign earnings for which no income taxes have been  provided		(421	)	(233		)	(256		)
State income taxes, net of Federal income tax effect		41		1			13
Incentive stock options		68		42			-
Domestic production activities deduction				(25		)	(60		)
Provision for uncertain tax positions		118		16			-
Other		(34	)	4			(33		)
	$	500		(112		)	244

The operating results of our 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 $1,238 in 2009, $686 in 2008, and $708 in 2007.  In March 2007, we determined that during fiscal years March 31, 2005 and 2006 we had inadvertently triggered additional U.S. taxable income and an income tax liability due to our borrowings under our joint line of credit with our subsidiary in Honduras.  In April 2007, we filed amended income tax returns and paid additional income taxes for the years ended March 31, 2005 and 2006.  In June 2007, we filed restated financial statements with the SEC.  As of March 31, 2009 no income taxes have been provided on the $1,238 of earnings in Honduras in fiscal 2009, $686 of earnings in Honduras in fiscal 2008 and $708 of earnings in Honduras in fiscal 2007.

The total amount of undistributed earnings of our foreign subsidiary for income tax purposes was approximately $2,883 as of March 31, 2009.  It is our intention to reinvest undistributed earnings of our 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 us.  The unrecognized deferred tax liability on those earnings is approximately $981.

(7) Stock Options and Grants

We have 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 (non-vested shares) of our common stock (the “Plans”).  Employee stock options generally vested over a three year period and, until March 2008, director stock options vested over a two year period.  Beginning in March 2008, when directors were granted stock options for the fiscal 2009 year, the director options also vest over a three- 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

F-13

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

more than 10% of the voting power of all classes of our stock, the exercise price for an incentive stock option may not be less than

110% of the fair market value of the shares of our common stock on the date of grant.  The term of a stock option may not exceed ten years.  Non-qualified stock options will be granted at the fair market value on the date of grant.

Our 1993 Incentive Stock Option Plan and 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.

On March 24, 2000, our Board of Directors adopted the 2000 Long Term Incentive Plan and it was approved by our stockholders in August 2000 at our 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.  The 2000 Long Term Incentive Plan also allows for the grant of restricted stock awards (non-vested shares) to our officers and directors. 

On June 24, 2008, our Board of Directors approved the Amended and Restated 2000 Long Term Incentive Plan and it was approved by our stockholders on August 27, 2008 at our annual meeting.  The Amended and Restated 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 our employees or directors. The Amended and Restated 2000 Long Term Incentive Plan also allows for the grant of restricted stock awards (non-vested shares) to either our employees or directors. A total of 500,000 additional shares of our common stock have been reserved for issuance under the Amended and Restated 2000 Long Term Incentive Plan.  A total of 1.6 million shares of our common stock have been reserved for issuance under the Amended and Restated 2000 Long Term Incentive Plan, of which 332,750 shares remain available for awards as of March 31, 2009.

The table below summarizes option activity in the Plans for the fiscal years ended March 31, 2009, 2008, and 2007:

			Aggregate	Weighted	Weighted
	Shares		intrinsic	average	average
	available	Options	value	exercise	remaining
	for grant	outstanding	(in thousands)	price	contractual life
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)	-
Options canceled	-	(235,976)		$ 5.59
Restricted stock forfeited	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
Additional shares reserved	500,000	-
Options expired		(3,117)		$ 1.63
Options granted	(274,001)	274,001		$ 1.93	9.64
Options canceled	77,250	(77,250)		$ 7.37
Restricted stock grants	(106,999)	-
Options exercised	-	-
Balance as of March 31, 2009	332,750	955,586	$ 1	$ 4.44	8.09
Exercisable as of March 31, 2009		417,541	$ 1	$ 6.77	6.73
_______________________________

F-14

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

The weighted average grant date fair value of options granted during the fiscal years ended March 31, 2009, 2008, and 2007 was $1.07 per share, $2.17 per share, and $3.75 per share, respectively.  The total intrinsic value of options exercised during the fiscal years ended March 31, 2009, 2008, and 2007 was $-, $3, and $13, respectively.

As of March 31, 2009, there was $696 of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted average period of 1.9 years.  The total fair value of stock options vested during the fiscal years ended March 31, 2009, 2008, and 2007 was $388, $153, and $118, respectively.

We 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 our stock price as well as assumptions regarding several subjective variables including our 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 our experience with paying dividends over the past 12 months.  We are 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 2009, 2008, and 2007 was $1.93, $3.27, and $5.17, respectively, on the date of grant using the Black-Scholes option pricing model, with the following assumptions:

	Years Ended March 31,
	2009	2008	2007
Weighted-average expected dividend yield	3.1%	1.9%	1.3%
Weighted-average risk free interest rate	2.1%	3.9%	4.8%
Weighted-average expected volatility	76.3%	83.5%	89.9%
Weighted-average expected life	7.5 years	7.45 years	7.05 years

As of March 31, 2009, 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, 2009	Weighted average remaining contractual life(years)		Weighted average exercise price	Number exercisable as of March 31, 2009		Weighted average exercise price
$	1.50 - 1.63	6,000	2.6	$	1.52	6,000	$	1.52
$	1.64 - 1.80	203,586	9.1		1.70	24,585		1.74
$	1.81 - 4.87	501,200	8.8		3.10	152,156		3.26
$	4.88 - 5.17	60,000	7.2		5.02	50,000		5.04
$	5.18 - 8.30	50,000	6.7		7.27	50,000		7.27
$	8.31 - 12.34	134,800	5.0		12.34	134,800		12.34
		955,586	8.1	$	4.44	417,541	$	6.77

We have also reserved 32,667 shares of our 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, 2009, 2008, or 2007.

F-15

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

In April 2006, we granted a total of 23,370 shares of restricted stock to eleven members of our 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 our 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 we 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.

We granted 81,999 shares of restricted stock awards (non-vested shares) in December 2008 at a grant date fair value of $1.70 per share.  We granted 25,000 shares of restricted stock awards (non-vested shares) in February 2009 at a grant date fair value of $1.90 per share.  The shares have a three-year vesting period.  As of March 31, 2009, all 106,999 shares of restricted stock are non-vested and remain outstanding.

As of March 31, 2009, there was $168 of total unrecognized compensation cost related to non-vested restricted stock awards that is expected to be recognized over a weighted average period of 2.7 years. There was no vesting of restricted stock in fiscal 2009.

The following table summarizes restricted stock activity since March 31, 2006:

		Weighted-average
		Grant-Date
	Shares	Fair Value
Non-vested balance at March 31, 2006	-
Restricted stock granted	23,370
Restricted stock vested	-
Restricted stock forfeited	(23,370)
Non-vested balance as of March 31, 2007	-
Restricted stock granted	-
Restricted stock vested	-
Restricted stock forfeited	-
Non-vested balance as of March 31, 2008	-
Restricted stock granted	106,999	$ 1.75
Restricted stock vested	-
Restricted stock forfeited	-
Non-vested balance as of March 31, 2009	106,999	$ 1.75

(8)  Leases

We lease the land on which our 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.  We utilized the first ten-year option and extended the lease through August 2011.  The lease provides for rent adjustments every five years.  We are responsible for payment of taxes, insurance and maintenance.  In the event we elect to terminate the lease, title to all structures on the land reverts to the lessor.

Our 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 2010.

Future minimum lease payments under non-cancelable operating leases as of March 31, 2009 are: 

Year ending March 31,
2010	$	217
2011		35
2012		15
Thereafter		-
Total minimum lease payments	$	267

Rental expense for all operating leases was approximately $217 in 2009, $261 in 2008, and $254 in 2007.

F-16

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

(9)  Major Customers

We operate in one business segment - the design, development, manufacture and marketing of electronic control and measurement devices for the distribution of electric power.  We only report 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		2009	2008	2007
U.S. Military (direct sales)	$	3,517	6,400	3,623
DRS Technologies, Inc., a U.S. Government Prime Contractor		10,251	6,986	7,000
Total Revenue for major customers	$	13,768	13,386	10,623
Exports:
Africa	$	1	1	2
Australia		2	1	9
Canada		63	62	243
Europe		2,000	1,921	2,866
Far East		1,548	2,189	5,146
Mexico		125	526	639
Middle East		28	17	29
South America		27	13	22
Total exports	$	3,794	4,730	8,956

(10)  Benefit Plan

Our 401(k) plan covers all employees with three months of service who are at least 21 years old.  We match employee contributions dollar-for-dollar up to $400.  Our contributions were approximately $23 in 2009, $23 in 2008, and $30 in 2007.

 (11)  Litigation

On December 29, 2006, we entered into a Settlement Agreement with Tower Manufacturing Corporation (“Tower”).  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. The settlement is included in other income in the fiscal 2007 consolidated statement of income.  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. We received our final payment from Tower under the Settlement Agreement in January, 2009.

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 and that ELE's Leakage Current Detectors and Interrupters (LCDIs), among other things, infringe our '337 patent.  We also sought monetary damages against ELE for past infringement of the '337 patent.  The '337 patent underlies our Fire Shield® technology for cord fire prevention.  

              On August 4, 2008, we entered into a Settlement Agreement with  ELE.  Under the Settlement Agreement, the civil action involving TRC and ELE was dismissed.  As part of the Settlement Agreement we entered into a cross-licensing arrangement with ELE for our ‘337 patent and ELE’s Chinese patents Nos. ZL200420096315.2, ZL 200520118736.5 and ZL200520118737.X for the period such patents remain valid and enforceable. The parties agreed to make payments to each other for sales of products made prior to July 1, 2008, thereby resulting in us receiving a net payment from ELE as part of the terms of the confidential Settlement Agreement.

F-17

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

Under this licensing arrangement, we will receive royalty payments for periods beginning after June 30, 2008, based on the number of designated ELE Leakage Current Detector Interrupter Products sold.

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

(12)  Stock Repurchase Plan

On December 9, 1999, our board of directors approved a plan for us to buy back up to 500,000 shares of our common stock on the open market.  Through the year ended March 31, 2009, we had repurchased 21,500 shares at a cost of $40.  On June 28, 2006, our board of directors terminated our stock repurchase program.

 (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, 2009 and 2008 are:

			First  quarter		Second  quarter		Third  quarter		Fourth  quarter
Year ended March 31, 2009:
Revenue	$		8,631		9,297		7,821		7,984
Gross profit			2,534		3,524		2,551		2,858
Income from operations			63		784		161		552
Net income			58		938		255		389
Basic earnings per share			.01		.16		.04		.07
Diluted earnings per share			.01		.16		.04		.07
Year ended March 31 2008:
Revenue		$		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		0.06		(0.15	)
Diluted earnings (loss) per share				.08		.07		0.06		(0.15	)

 (14)  Acquisition

On April 28, 2006, we 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 our existing RV business by allowing us 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 our 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 were issued on a contingent basis and were 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.  No contingent shares were earned and the shares will be cancelled. 

F-18

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Notes to the Consolidated Financial Statements (Continued)

March 31, 2009, 2008, and 2007

(In thousands, except share and per share data)

The purchase price was allocated as follows:

			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, 2009 was $59.  It is estimated that amortization expense related to these intangible assets will amount to $59 for fiscal 2010 thru 2011, $58 for 2012 thru 2015, and $55 for 2016 and beyond.

The following unaudited pro-forma summary presents the consolidated results of our operations 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. 

		2007
Revenue	$	38,043
Net income		1,464
Diluted earnings per share		0.25

(15)  Accrued Business Restructuring

In the fourth quarter of fiscal 2007, we 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 our competitive position.  We had experienced a significant decline in its RAC Revenue 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:

Balance as of March 31, 2007	$	113
Less payments made in fiscal 2008		113
Balance as of March 31, 2008		-

F-19

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

Schedule II

Valuation and Qualifying Accounts

Years ended March 31, 2009, 2008, and 2007

(In thousands)

			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, 2009	$	123	166	-	86	203
Year ended March 31, 2008	$	273	69	-	219	123
Year ended March 31, 2007	$	78	261	-	66	273

(1) Write-offs, net of recoveries

F-20

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 Incorporation

Technology Research Corporation                                      Honduras

Honduras S.A. de C.V.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Technology Research Corporation:

We consent to the incorporation by reference in the registration statements (No. 333-96975, No. 333-110825, No. 333-131633, No. 333-132006, and No. 333-158351) on Form S-8 of Technology Research Corporation of our report dated June 15, 2009, with respect to the consolidated balance sheets of Technology Research Corporation and subsidiary as of March 31, 2009 and 2008, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the years in the three-year period ended March 31, 2009, and the related financial statement schedule, which report appears in the March 31, 2009, annual report on Form 10-K of Technology Research Corporation.

/s/ KPMG LLP

June 18, 2009

Tampa, Florida

Certified Public Accountants

EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

ARTICLE I

Name

The name of this corporation is:  TECHNOLOGY RESEARCH CORP.

ARTICLE II

Duration

The term of existence of this corporation shall be perpetual.

ARTICLE III

Purpose

This corporation is organized of the purpose of manufacturing and supplying electrical and electronic high-technology products used in a broad range of government and industrial applications. In addition thereto, the corporation may transact any and all lawful business.

ARTICLE IV

Capital Stock

This corporation is authorized to issue 500,000 shares of $1.00 par value common stock, which shall be designated “common shares”. The consideration to be paid for each share shall be fixed by the Board of Directors.  Common stock of the corporation may be issued as “small business corporation” stock in accordance with a plan or plans under the provisions of Section 1244 of the Internal Revenue Code of 1954.

All voting powers of this corporation shall be vested in the common stock above-designated.

ATTICLE V

Preemptive Rights

Any shareholder, upon the sale, by the corporation, for cash of any new stock of this corporation shall have the right to purchase his pro rate share thereof (as nearly as may be done without issuance of fractional shares) at the price at which it is offered to others.

ARTICLE VI

Initial Registered Office and Agent

Street address of the initial registered office of this corporation is 2101,D.D., Sunnydale Boulevard, Clearwater, Florida 33515, and the name of the initial registered agent of this corporation at that address is Raymond H. Legatti

ARTICLE VII

Initial Board of Directors and Officers

This corporation shall have three (3) directors and/or officers initially.  The number of directors and/or officers may be either increased or diminished from time to time by the By-Laws, but shall never be less than three (3). The names and addresses of the initial directors and officers of this corporation are:

Raymond H. Legatti                                         1567 Alexander Road, Belleair FL 33516            President/Director

Theodore M. Sway                                         487 Harbor Drive So, Indian Rocks Beach, FL  Vice President/Secretary/Director

Raymond B. Wood                                         1513 Beverly Drive, Clearwater FL                      Vice President/Director

ARTICLE VIII

The name and address of the person signing these Articles is:

Raymond H. Legatti                                         1567 Alexander Road, Belleair, FL 33516           President/Director

ARTICLE IX

By-Laws

The power to adopt, alter, amend, or repeal By-Laws shall be vested in the  Board of Directors and the shareholders.

ARTICLE X

Powers

This corporation shall have all of the corporate powers enumerated in the Florida General Corporation Act, and, in addition to and not in limitation thereof, this corporation shall have the power to guarantee the performances of obligations of other persons, partnerships, corporations, or other entities.

ARTICLE XI

Indemnification

The corporation shall indemnify any officer or director, or any former officer or director, to the full extent permitted by law.

ARTICLE XII

Amendment

This corporation reserves the right to amend or repeal any provision contained in these Articles of Incorporation, or any amendment hereto, and any right conferred upon the shareholders is subject to this reservation.

IN WITNESS WHEREOF, the undersigned Incorporator has executed these Articles of Incorporation this 26th day of May, 1981.

RAYMOND H. LEGATTI

/s/ Raymond H. Leggati

Incorporator

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Owen Farren, certify that:

1.   I have reviewed this report on Form 10-K 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)   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;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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 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 15, 2009                                                                         By: /s/Owen Farren

Owen Farren

Director, President, Chief Executive Officer

EX-31.2

Exhibit 31.1

CERTIFICATIONS

I, Thomas G. Archbold, certify that:

1.   I have reviewed this report on Form 10-K 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)   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;

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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 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 15, 2009                                                                         By: /s/ Thomas G. Archbold

Thomas G. Archbold

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Annual Report on Form 10-K of Technology Research Corporation for the year ended March 31, 2009, I, Owen Farren, Chief Executive Officer, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1)   such Annual Report on Form 10-K for the year ended March 31, 2009, fully complies with the requirement of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   the information contained in such Annual Report on Form 10-K for the year ended March 31, 2009, fairly presents, in all material respects, the financial condition and results of operations of Technology Research Corporation.

/s/  Owen Farren

Owen Farren

Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Technology Research Corporation and will be retained by Technology Research Corporation and furnished to the Securities and Exchange Commission or its Staff upon request.

June 15, 2009

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Annual Report on Form 10-K of Technology Research Corporation for the year ended March 31, 2009, I, Thomas G. Archbold, Chief Financial Officer, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1)   such Annual Report on Form 10-K for the year ended March 31, 2009, fully complies with the requirement of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   the information contained in such Annual Report on Form 10-K for the year ended March 31, 2009, fairly presents, in all material respects, the financial condition and results of operations of Technology Research Corporation.

/s/  Thomas G. Archbold

Thomas G. Archbold

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Technology Research Corporation and will be retained by Technology Research Corporation and furnished to the Securities and Exchange Commission or its Staff upon request.

June 15, 2009

EX-3.2

Exhibit 3.2

ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

Article IV of the Articles of Incorporation of TECHNOLOGY RESEARCH CORP., is hereby amended to read:

ARTICLE IV

Capital Stock

This corporation is authorized to issue 1,500,000 share of $0.50 par value common stock, which shall be designated “common shares”.  The consideration to be paid for each share shall be fixed by the Board of Directors.  Common stock of the corporation may be issued as “small business corporation” stock in accordance with a plan or plans under the provisions of Section 1244 of the Internal Revenue Code of 1954.

The foregoing amendment was adopted by the Board of Directors and shareholders of this corporation on the 18th day of January, 1982.

IN WITNESS WHEREOF, the undersigned President and Secretary/Treasurer of this corporation have executed these Articles of Amendment this 12th day of February, 1982.

RAYMOND H. LEGATTI

/s/ Raymond H. Leggati

President

THEODORE M. SWAY

/s/ Theodore M. Sway

Secretary/Treasurer

EX-3.3

Exhibit 3.3

ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

The undersigned Corporation, in accordance with the Florida General Corporation Act and its Bylaws, hereby adopts the following Articles of Amendment:

1.The name of the Corporation is: TECHNOLOGY RESEARCH CORP.

2.Article IV of this Corporation’s Articles of Incorporation is hereby amended in its entirety so as to read, after amendment, as follows:

“ARTICLE IV

Capital Stock

The capital stock authorized, the par value thereof, and the characteristics of such stock shall be as follows:

Number of shares

Shares Authorized                      Par Value Per share              Class of Stock

4,500,000                                                    $.17                                Common

The consideration for all of the above stock shall be payable in cash, property (real or personal), labor or services in lieu of cash; at the just valuation to be fixed by the Board of Directors of the Corporation.

3.Article V, entitled “Preemptive Rights,” shall be deleted in its entirety, and all Articles remaining or added shall be numbered sequentially thereafter.

4.A new Article, entitled “Conflicts of Interest”, shall be added and it shall read as follows:

“ARTICLE XII

CONFLICT OF INTEREST

No contract or other transaction between this Corporation and any other corporation, and no act of this Corporation, shall in any way be affected or invalidated by the fact that any of the Directors of this Corporation are pecuniarily or otherwise interested in, or are the directors or officers of, such other corporation.  Any Director individually, or any firm of which any director may be a member, may be a party to, or may be pecuniarily to otherwise interested in any contract or transaction of this Corporation, provided that the fact that he or such firm is so interested shall be disclosed or shall have been known to the Board of Directors or a majority thereof, and any Director of this Corporation, or who is so interested may be counted in determining the existence of a quorum at any meetings of the Board of Directors of this corporation which shall authorize any such contract or transaction with like force and effect as if he were not such a director or officer of such other corporation, or not so interested.”

5.   An new Article, entitled “Limited Liability of Shareholder,” shall be added and it shall read as follows:

“ARTICLE XIII

LIMITED LIABILITY OF SHAREHOLDERS

The private property of the shareholders shall not be subject to payment of the corporations’ debts to any extent.

The foregoing restated articles of incorporation restate and integrate and do not further amend the provisions of the corporations articles of incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of the restated articles of incorporation.

6.   A new article, entitled “Employment Contract,” shall be added and it shall read as follows:

“ARTICLE XIV

EMPLOYMENT CONTRACT

The Board of Directors may authorize this corporation to enter into employment contracts with any executive officer for periods longer than one year, and any article or bylaw provisions for annual election shall be without prejudice to the contract rights, if any, of the executive officer under such contracts.

7.   The foregoing amendments to the articles of incorporation were adopted by the shareholders and the board of directors of the corporation of June 25, 1983.

8.    The effective date of these articles of amendment to the articles of incorporation is as of the date of acceptance and filing by the Secretary of the state of Florida.

Dated this 2nd day of September, 1983.

ATTEST                                                        TECHNOLOGY RESEARCH CORP

/s/ Theodore M. Sway                                                                          /S/ Raymond H. Legatti

THEODORE M. SWAY                                                                RAYMOND H. LEGATTI

Secretary                                                        President

EX-3.4

Exhibit 3.4

ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

The undersigned, as the President and the Secretary for TECHNOLOGY RESEARCH CORP., do hereby certify that the Amendment provided for herein was adopted by the Board of Directors on the 30th day of November, 1983.

1.Article I is hereby deleted in its entirety and the following is inserted in place thereof:

“ARTICLE I

Name

The name of this corporation is: TECHNOLOGY RESEARCH CORPORATION.”

2.Amendment Adopted: November 30, 1983 by the shareholders .

IN WITNESS WHEREOF, the undersigned have executed these Articles of Amendment on the 30th day of November, 1983.

S/ Raymond H. Legatti

RAYMOND H. LEGATTI

President

/s/ Theodore M. Sway

THEODORE M. SWAY

Secretary

EX-3.5

Exhibit 3.5

ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

The undersigned, as the President and Secretary of TECHNOLOGY RESEARCH CORPORATION, in accordance with the Florida General Corporation Act and its Bylaws, hereby adopts the following Articles of Amendment:

1.Article IV of this Corporation’s Articles of Incorporation is hereby amended in its entirety so as to read, after amendment, as follows:

“ARTICLE IV

Capital Stock

The capital stock authorized, the par value thereof, and the characteristics of such stock shall be as follows:

Number of Shares

Shares Authorized                                  Par Value Per share                 Class of Stock

10,000,000                                                               $.17                                Common

The consideration for all of the above stock shall be payable in cash, property (real or personal), labor or services in lieu of cash; at the just valuation to be fixed by the Board of Directors of the Corporation.”

2.    Amendment Adopted: May 30, 1984 by the shareholders.

IN WITNESS WHEREOF, the undersigned have executed these Articles of Amendment on the 13 day of June, 1984.

/S/ Raymond H. Legatti

RAYMOND H. LEGATTI

President

/s/ Theodore M. Sway

THEODORE M. SWAY

Secretary

EX-3.6

Exhibit 3.6

ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION

OF

TECHNOLOGY RESEARCH COPORATION

The undersigned, as the President and Secretary of TECHNOLOGY RESEARCH CORPORATION, do hereby certify that the Amendment provided for herein was adopted by the stockholders and the Board of Directors on 22 day of October, 1987.

1.Name of Corporation:   TECHNOLOGY RESEARCH CORPORATION

2.Amendment Adopted:  Article IV of the Articles of Incorporation is hereby amended to read as follows:

“ARTICLE IV

Capital Stock

The capital stock authorized, the par value thereof, and the characteristics of such stock shall be as follows:

Number of Shares

Shares Authorized                                 Par Value Per share              Class of Stock

20,000,000                                                               $.17                                Common

IN WITNESS WHEREOF, the undersigned have executed these Articles of Amendment on the 21 day of December, 1987.

/S/ Raymond H. Legatti

RAYMOND H. LEGATTI

President

/s/ Theodore M. Sway

THEODORE M. SWAY

Secretary

EX-3.7

Exhibit 3.7

CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION  OF

TECHNOLOGY RESEARCH COPORATION

TECHNOLOGY RESEARCH CORPORATION, a Florida corporation (the “Corporation”), hereby certifies as follows:

1.The Articles of Incorporation of the Corporation are hereby amended by deleting the present form of Article IV in its entirety and by substituting, in lieu thereof, the following:

“The aggregate number of shares of stock authorized to be issued by this Corporation shall be 30,000,000 share of common stock, each with a par value of $.17.  Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to the common stock, as well as in the net assets of the Corporation upon liquidation or dissolution.”

2.The foregoing amendment shall become effective as of the close of business on the date this Certificate is approved by the Florida Department of State and all filing fees then due have been paid, all in accordance with the corporation laws of the State of Florida.

3.The amendment recited in Section 1 above has been duly adopted in accordance with the provisions of §607.1003, Florida Statutes, the Board of Directors of the Corporation having adopted a resolution setting forth such amendment, declaring its advisability and directing that such amendment be considered by the shareholders of the Corporation at its annual meeting thereof; notice of such meeting having been provided in accordance with the By-Laws of the Corporation; a quorum of such shareholders having been present at the meeting held by response to such notice on august 27, 1990; and a majority of the shareholders present at such meeting and entitled to vote on the proposed amendment having voted in favor thereof. The number of votes cast for the amendment by each voting group was sufficient for approval by that voting group.

IN WITNESS WHEREOF, the Corporation has made this Certificate under the signature of its President and the attestation of its Secretary this 24 day of September, 1990.

TECHNOLOGY RESEARCH CORPORATION

/S/ Raymond H. Legatti

RAYMOND H. LEGATTI

President

ATTEST

/s/ Robert w. Jones

ROBERT W. JONES

Secretary

EX-3.8

Exhibit 3.8

CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF

TECHNOLOGY RESEARCH COPORATION

TECHNOLOGY RESEARCH CORPORATION, a Florida corporation (the “Corporation”), hereby certifies as follows:

1.The Articles of Incorporation of the Corporation are hereby amended by deleting the present form of Article IV in its entirety and by substituting, in lieu thereof, the following:

“The aggregate number of shares of stock authorized to be issued by this Corporation shall be 10,000,000 share of common stock, each with a par value of $.51.  Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to the common stock, as well as in the net assets of the Corporation upon liquidation or dissolution.”

2.On May 10, 1995 the Board of Directors of the Corporation, and on August 23, 1995, the shareholders of the Corporation, approved a one for three reverse stock split or share combination, effective September 15, 1995.  In additional to reducing the Corporation’s authorized common stock to from 30,000,000 to 10,000,000 shares, the reverse stock split will effect a reduction in the issued and outstanding shares of common stock, from 15,844,507 to 5,281,502 (plus such additional shares as are created by rounding up each fractional share generated by the share combination to the next higher whole number).

3.The amendment recited above does not adversely affect the rights or preferences of the holders of outstanding shares of any class or series and does not result in the percentage of authorized shares that remain unissued after the division or combination exceeding the percentage of authorized shares that were unissued before the division or combination, except as a result of de minimis rounding up of each fractional share generated by the share combination to the next higher whole number, as approved by the Corporation’s shareholders.

4.The amendment recited above (including the reverse stock split) has been duly adopted in accordance with the provisions of §607.1003 and 607.10025(6), Florida Statutes, the Board of Directors of the Corporation having adopted a resolution setting forth such amendment, declaring its advisability and directing that such amendment be considered by the shareholders of the Corporation at its annual meeting thereof; notice of such meeting having been provided in accordance with the By-Laws of the Corporation; a quorum of such shareholders having been present at the meeting held by response to such notice on August 23, 1995; and a majority of the shareholders present at such meeting and entitled to vote on the proposed amendment having voted in favor thereof, a vote sufficient for the approval of the amendment.

5.The foregoing amendment and reverse stock split shall become effective as of the close of business on September 15, 1995.

IN WITNESS WHEREOF, the Corporation has made this Certificate under the signature of its President and the attestation of its Secretary this 23 day of August, 1995.

TECHNOLOGY RESEARCH CORPORATION

/S/ Raymond H. Legatti

RAYMOND H. LEGATTI

President

ATTEST

/s/ Robert  S. Wiggins

ROBERT S. WIGGINS

Secretary