~~Table~~UNITED ~~of Contents~~STATES

~~UNITED STATES~~ SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2010~~2011

o£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number 0-22583

~~Commission~~ORBIT/FR, ~~File Number 0-22583~~ Inc.

~~ORBIT/FR,~~(Exact ~~Inc.~~ Name of Registrant as Specified in its Charter)

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	23-2874370
(State or Other Jurisdiction	(IRS Employer
of Incorporation or Organization)	Identification No.)

506 Prudential Road, Horsham, PA	19044
(Address of Principal Executive Offices)	(Zip Code)

DELAWARE		23-2874370
(State or Other Jurisdiction		(IRS Employer
of Incorporation or Organization)		Identification No.)
506 Prudential Road, Horsham, PA		19044
(Address of Principal Executive Offices)		(Zip Code)

(215) 674-5100

(~~215) 674-5100 (~~Registrant’s telephone number, including area code)

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

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

Common Stock, par value $.01 per share

Indicate by check mark in the registrant is a well-known seasoned issuer, as defined in rule 405 of the Securities Act. Yes o£ No þ R

Indicate by check mark in the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the act. Yes o£ No þ R

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þR 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 herein, and will not be contained, to the best of the registrants 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 the ~~registrant~~Registrant has submitted electronically and posted on its corporate ~~Web site~~website, if any, every ~~Interactive~~interactive ~~Data~~data ~~File~~file required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o£ No o £

Indicate by check mark whether the ~~Registrant~~registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its corporate~~accelerated ~~website~~filer, ifa ~~any~~non-accelerated filer, ~~every~~or ~~interactive~~a ~~data~~smaller ~~file~~reporting ~~required~~company. toSee bethe ~~submitted~~definitions ~~and~~of ~~posted~~“large ~~pursuant to~~accelerated ~~Rule 405~~filer,” of“accelerated ~~Regulation S-T~~filer” ~~during~~and ~~the~~“smaller ~~preceding~~reporting ~~12 months~~company” ~~(or~~in ~~for~~Rule ~~such~~12b-2 ~~shorter~~of ~~period that~~ the ~~registrant~~ ~~was~~Exchange ~~required to submit and post such files)~~Act. ~~Yes~~(Check ~~o No o~~ one):

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, an£ ~~accelerated~~ Accelerated filer, a£ ~~non~~Non-accelerated filer, or£ aSmaller ~~smaller~~ reporting company. ~~See~~R ~~the~~(Do ~~definitions~~not ofcheck ~~“large accelerated~~if ~~filer,”~~a ~~“accelerated filer” and “~~smaller reporting company~~” in Rule 12b-2 of the Exchange Act. (Check one~~):

~~Large~~Indicate ~~accelerated~~by ~~filer~~checkmark owhether ~~Accelerated~~the ~~filer~~registrant ois ~~Non-accelerated~~a ~~filer~~shell ocompany ~~Smaller~~(as ~~reporting~~defined ~~company~~in þRule ~~(Do~~12-b-2 ~~not~~of ~~check~~the ifAct) aYes ~~smaller~~£ ~~reporting~~No ~~company)~~R

~~Indicate~~As byof ~~checkmark~~June ~~whether~~30, 2011, the ~~registrant~~last isbusiness aday ~~shell~~of ~~company~~the ~~(as~~Registrant’s ~~defined~~most inrecently ~~Rule 12~~completed second fiscal quarter; the aggregate market value of the voting and non-bvoting common equity held by non-2affiliates of the ~~Act~~Registrant was $5,061,371 (based on the closing price of the Common Stock on June 30, 2011 of $2.20 per share). ~~Yes~~The oinformation Noprovided þ shall in no way be construed as an admission that any officer, director, or 10% shareholder in the Company may or may not be deemed an affiliate of the Company or that he/it is the beneficial owner of the shares reported as being held by him/it, and any such inference is hereby disclaimed. The information provided herein is included solely for record keeping purposes of the Securities and Exchange Commission. As of March 30, 2012, 6,001,773 shares of Common Stock were outstanding.

As of June 30, 2010, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was $4,741,652 (based on the closing price of the Common Stock on June 30, 2010 of $2.06 per share). The information provided shall in no way be construed as an admission that any officer, director, or 10% shareholder in the Company may or may not be deemed an affiliate of the Company or that heORBIT/~~it is the beneficial owner of the shares reported as being held by him/it~~FR, ~~and any such inference is hereby disclaimed~~Inc. ~~The information provided herein is included solely for record keeping purposes of the Securities and Exchange Commission. As of March 30, 2010, 6,001,773 shares of Common Stock were outstanding.~~

~~ORBIT/FR, Inc.~~ Index

Index

	Page No.
PART I.	3
Item 1. Business	3
Item 1A. Risk Factors	12
Item 1B. Unresolved Staff Comments	14
Item 2 Properties	14
Item 3 Legal Proceedings	14
Item 4 (Removed and Reserved)	14
PART II.	15
Item 5 Market for the Registrant’s Common Equity and Related Stockholder Matters	15
Item 6 Selected Financial Data	16
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7a Quantitative and Qualitative Disclosure About Market Risk	20
Item 8 Financial Statements and Supplementary Data	20
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	20
Item 9A(T) Controls and Procedures	20
Item 9B Other Information	20
PART III	21
Item 10 Directors, Executive Officers and Corporate Governance	21
Item 11 Executive Compensation	24
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13 Certain Relationships and Related Transactions, and Director Independence	27
Item 14 Principal Accountant Fees and Services	28
PART IV	28
Item 15 Exhibits, Financial Statement Schedule, and Reports on Form 8-K	28

	Page No.
PART I.
Item 1. Business		3
Item 1A. Risk Factors		12
Item 1B. Unresolved Staff Comments		14
Item 2 Properties		14
Item 3 Legal Proceedings		14
Item 4 (Removed and Reserved)		14
PART II.
Item 5 Market for the Registrant’s Common Equity and Related Stockholder Matters		15
Item 6 Selected Financial Data		16
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 7a Quantitative and Qualitative Disclosure About Market Risk		21
Item 8 Financial Statements and Supplementary Data		21
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures		21
Item 9A(T) Controls and Procedures		21
Item 9B Other Information		21
PART III
Item 10 Directors, Executive Officers and Corporate Governance		22
Item 11 Executive Compensation		25
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		27
Item 13 Certain Relationships and Related Transactions, and Director Independence		28
Item 14 Principal Accountant Fees and Services		28
PART IV
Item 15 Exhibits, Financial Statement Schedule, and Reports on Form 8-K
		29
Exhibit 4.2
Exhibit 4.3
Exhibit 10.7
Exhibit 10.8
Exhibit 10.9
Exhibit 10.10
Exhibit 23.1
Exhibit 23.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2 Index

~~Table~~PART ~~of Contents~~I

~~PART~~Forward-Looking I Statements

~~Forward~~This Annual Report on Form 10-~~Looking~~K, and documents incorporated herein, contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements as a result of certain factors, including, but not limited to those set forth in Item 1A “Risk Factors” below and elsewhere in this Annual Report on Form 10-K. The following discussion should be read in conjunction with Item 1A “Risk Factors” below and the Consolidated Financial Statements and notes to the Consolidated Financial Statements beginning on page F-1. As used in this Annual Report on Form 10-K, unless the context otherwise requires, “we,” “us,” “our,” “Company,” or “ORBIT/FR” refers to ORBIT/FR, Inc. and its subsidiaries.

~~This~~ITEM Annual Report on Form 10-K, and documents incorporated herein, contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements as a result of certain factors, including, but not limited to those set forth in Item 1A “Risk Factors” below and elsewhere in this Annual Report on Form 10-K. The following discussion should be read in conjunction with Item 1A “Risk Factors” below and the Consolidated Financial Statements and notes to the Consolidated Financial Statements beginning on page F-1. ~~As used in this Annual Report on Form 10-K, unless the context otherwise requires, “we,” “us,” “our,” “Company,” or “ORBIT/FR” refers to ORBIT/FR, Inc. and its subsidiaries.~~ BUSINESS

~~ITEM 1. BUSINESS~~General

~~General~~ ORBIT/FR, Inc. develops markets and supports sophisticated automated microwave test and measurement systems for the aerospace/defense, wireless communications, satellite and automotive industries and manufactures anechoic foam, a microwave absorbing material that is an external component of microwave test and measurement systems. Military antennas, cellular phones, satellites, radars, radio transmitters, and global positioning system receivers all depend upon the reliable and efficient transmission and reception of microwave signals in order to communicate. By utilizing the Company’s systems to test and measure the critical performance characteristics of antennas, microwave signals, wireless manufacturers and service providers within these industries can improve quality and time-to-market, lower the risk of failure and underperformance and reduce costs.

~~ORBIT/FR~~Since its founding, ~~Inc.~~the ~~develops~~Company ~~markets~~has ~~and~~expanded ~~supports~~from ~~sophisticated~~distributing ~~automated~~individual microwave test and measurement ~~systems~~components ~~for~~to ~~the~~providing ~~aerospace/defense, wireless communications, satellite and automotive industries and manufactures anechoic foam,~~ a ~~microwave~~wide ~~absorbing~~range ~~material~~of ~~that~~fully isintegrated ~~an external component of~~ microwave test and measurement ~~systems~~solutions. ~~Military~~Components ~~antennas,~~of ~~cellular~~an ~~phones, satellites,~~ORBIT/FR ~~radars,~~automated ~~radio~~microwave ~~transmitters,~~test and ~~global~~measurement ~~positioning~~ system ~~receivers~~include ~~all~~proprietary ~~depend~~software ~~upon~~and ~~the reliable~~hardware ~~and~~products, ~~efficient~~which ~~transmission~~can ~~and~~be ~~reception~~combined ofinto ~~microwave~~standard ~~signals~~or incustomized ~~order~~configurations to ~~communicate.~~meet ~~By utilizing~~a ~~the Company~~customer’s ~~systems~~specific to test and measure the critical performance characteristics of antennas, microwave signals, wireless manufacturers and service providers within these industries can improve quality and time-to-market, lower the risk of failure and underperformance and reduce costsneeds.

~~Since~~The Company markets and sells its ~~founding~~systems to customers in the United States and throughout the world. Within its targeted industries, the Company’s ~~has~~customers ~~expanded~~include ~~from~~aerospace/defense ~~distributing~~systems ~~individual~~integrators and product manufacturers that incorporate microwave ~~test~~technology, ~~and measurement~~such ~~components~~as toLockheed ~~providing~~Martin, aRaytheon, ~~wide~~Northrop ~~range~~Grumman, ofBAE, ~~fully~~L3 ~~integrated~~Communications, ~~microwave~~Alenia, ~~test~~Astrium, Lufthansa and ~~measurement solutions.~~Boeing; ~~Components~~manufacturers of anwireless ~~ORBIT/FR~~systems ~~automated~~and ~~microwave~~products, ~~test~~such ~~and~~as ~~measurement~~Motorola, ~~system~~Nokia, ~~include proprietary~~Ericsson, ~~software~~Samsung, Sony and ~~hardware~~Qualcomm; ~~products~~telecommunications service providers that rely on microwave technology, ~~which~~such ~~can~~as beAT&T, ~~combined~~NTT ~~into~~and ~~standard~~British orTelecom; ~~customized configurations~~and toautomobile ~~meet~~and aautomotive ~~customer~~subassembly manufacturers such as Daimler, Ford, BMW and Hyundai. The Company’s ~~specific~~customers ~~needs~~also include the United States government and several foreign governments.

The Company’s ~~markets~~primary ~~and~~objective ~~sells~~is ~~its~~to ~~systems~~strengthen toits ~~customers~~position in ~~the~~automated ~~United~~microwave ~~States~~test and ~~throughout~~measurement ~~the world.~~systems ~~Within~~while ~~its~~developing ~~targeted~~products ~~industries,~~and ~~the Company’s customers include aerospace/defense~~ systems ~~integrators~~ ~~and~~for ~~product~~a ~~manufacturers~~broader ~~that~~range ~~incorporate~~of microwave ~~technology,~~applications. ~~such~~The asprincipal ~~Lockheed Martin,~~elements ~~Raytheon,~~of ~~Northrop~~the ~~Grumman,~~Company’s ~~BAE,~~strategy L3to ~~Communications,~~reach ~~Alenia,~~its ~~Astrium,~~objectives ~~Lufthansa~~are: ~~and~~(i) ~~Boeing; manufacturers~~offering ofcomprehensive ~~wireless~~high ~~systems~~quality ~~and~~solutions ~~products,~~to ~~such~~customers; as(ii) ~~Motorola,~~maintaining ~~Nokia,~~its ~~Ericsson,~~technological ~~Samsung, Sony and Qualcomm~~leadership; ~~telecommunications~~(iii) ~~service~~focusing ~~providers that rely~~ on ~~microwave~~standard ~~technology,~~systems ~~such as AT&T, NTT~~ and ~~British~~proprietary ~~Telecom;~~off-the-shelf ~~and~~products: ~~automobile~~(iv) ~~and~~pursuing ~~automotive~~growth ~~subassembly~~in ~~manufacturers~~international ~~such~~markets; ~~as Daimler, Ford, BMW~~ and ~~Hyundai.~~(v) ~~The~~leveraging ~~Company’s~~its ~~customers~~technological ~~also~~expertise ~~include~~to ~~the~~expand ~~United~~into ~~States~~complementary ~~government and several foreign governments~~markets.

The Company’s ~~primary~~principal ~~objective~~offices isare tolocated ~~strengthen~~at ~~its~~506 ~~position~~Prudential inRoad, ~~automated~~Horsham, ~~microwave~~Pennsylvania ~~test and measurement systems while developing products and systems for a broader range of microwave applications~~19044. ~~The~~Its ~~principal~~telephone ~~elements~~number ofis ~~the Company’s strategy to reach its objectives are:~~ (i215) ~~offering~~ ~~comprehensive~~674-5100, ~~high quality solutions to customers; (ii) maintaining~~ its ~~technological leadership; (iii) focusing on standard systems and proprietary off~~e-~~the-shelf~~mail ~~products:~~address ~~(iv) pursuing~~is ~~growth~~mail@orbitfr.com ~~in international markets;~~ and ~~(v) leveraging~~ its ~~technological~~Internet ~~expertise~~website tois ~~expand into complementary markets~~www. orbitfr.com.

The Company’s principal offices are located at 506 Prudential Road, Horsham, Pennsylvania 19044. Its telephone number is (215) 674-5100, its e-mail address is mail@orbitfr.com and its World Wide Web home page is located at www.orbitfr.com. 3

3 Index

~~Table of Contents~~History

~~History~~ The Company was incorporated in Delaware in December 1996. The Company is the holding company for Orbit Advanced Technologies, Inc., a Delaware corporation (“Technologies”), and its wholly owned subsidiaries, Flam & Russell, Inc., a Delaware corporation (“Flam & Russell”), Orbit FR Engineering, Ltd., an Israeli corporation (“Engineering”), Orbit FR Europe, GmbH, a German corporation (“GmbH”), and Advanced ElectroMagnetics, Inc. (“AEMI”), a California corporation. The Company’s former majority shareholder was Orbit-Alchut Technologies, Ltd., a publicly traded company in Israel which was founded in 1950 (“Alchut”). On May 13, 2008, Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo, SA (“Satimo”) a publicly traded company on the ALTERNEXT stock exchange. On June 30, 2009, Microwave Vision Group, SA, (“Microwave Vision”), acquired the 3.7 million common shares of the Company through a reorganization involving its wholly owned subsidiary, Satimo.

~~The~~Technologies ~~Company~~ was incorporated in ~~Delaware~~1985 inas ~~December 1996. The Company is the holding company for Orbit Advanced Technologies, Inc.,~~ a ~~Delaware corporation (“Technologies”), and its~~ wholly -owned ~~subsidiaries,~~subsidiary ~~Flam~~of &Alchut ~~Russell,~~to ~~Inc.,~~provide asales ~~Delaware corporation (“Flam & Russell”), Orbit FR Engineering, Ltd., an Israeli corporation (“Engineering”), Orbit FR Europe, GmbH, a German corporation (“GmbH”),~~ and ~~Advanced~~customer ~~ElectroMagnetics,~~support ~~Inc.~~for ~~(“AEMI”), a California corporation. The Company~~Alchut’s ~~former~~products ~~majority~~in ~~shareholder~~the ~~was~~United ~~Orbit-Alchut Technologies~~States, ~~Ltd.,~~including apositioning ~~publicly~~subsystems. ~~traded company~~In in1991, ~~Israel~~Technologies ~~which~~began ~~was~~to ~~founded~~focus inon ~~1950~~the ~~(“Alchut”).~~development Onand ~~May 13,~~design ~~2008, Alchut sold all~~ of its ~~3.7 million~~own ~~shares~~proprietary ofmicrowave ~~common~~test ~~stock~~and ofmeasurement ~~the~~products ~~Company~~and tosystems. ~~Satimo~~In 1994, SATechnologies ~~(“Satimo”)~~recognized ~~a publicly traded company on~~ the ~~ALTERNEXT~~potential ~~stock~~for ~~exchange.~~providing Oncustomers ~~June 30,~~with ~~2009,~~fully ~~Microwave~~integrated ~~Vision~~microwave ~~Group,~~test ~~SA,~~and ~~(“Microwave~~measurement ~~Vision”), acquired~~solutions ~~the~~and ~~3.7 million~~began ~~common~~incorporating ~~shares~~its ofsoftware ~~the~~technology ~~Company~~with ~~through~~hardware afrom ~~reorganization~~third-party ~~involving its wholly owned subsidiary, Satimo~~manufacturers.

~~Technologies~~Engineering was incorporated in ~~1985~~Israel in December 1996 as a wholly-owned subsidiary of Alchut toat ~~provide~~which ~~sales and~~time ~~customer support for~~ Alchut’s ~~products~~transferred inall of the ~~United~~assets ~~States,~~relating ~~including~~to ~~positioning~~its ~~subsystems. In~~microwave ~~1991,~~test ~~Technologies~~and ~~began~~measurement business to ~~focus~~Engineering. onEngineering ~~the~~is ~~development~~principally ~~and~~responsible ~~design~~for ofoverseeing ~~its~~the ~~own~~development, ~~proprietary~~design ~~microwave test~~ and ~~measurement~~production ~~products~~of ~~and~~ORBIT/FR’s ~~systems~~electro-mechanical products. InAlong ~~1994,~~with ~~Technologies recognized the potential for~~ providing ~~customers~~electro-mechanical ~~with~~products ~~fully~~internally, ~~integrated~~Engineering ~~microwave~~is ~~test~~responsible ~~and~~for ~~measurement~~sales, ~~solutions~~marketing and ~~began incorporating~~customer ~~its~~support ~~software~~to ~~technology~~the ~~with~~Asian ~~hardware from third-party manufacturers~~market.

~~Engineering~~In ~~was~~October ~~incorporated~~1997, inOrbit ~~Israel~~FR inEurope, ~~December 1996~~GmbH aswas aincorporated ~~wholly-owned~~in ~~subsidiary~~Germany. ofGmbH ~~Alchut at~~develops ~~which~~compact ~~time~~range ~~Alchut~~measurement ~~transferred~~systems ~~all of the assets relating to its microwave test~~ and ~~measurement business to Engineering. Engineering is principally responsible for overseeing the development~~components, ~~design~~ and ~~production of ORBIT/FR’s electro-mechanical products. Along with providing electro-mechanical products internally, Engineering~~ is responsible for sales, marketing and customer support to the ~~Asian~~European market.

InOn ~~October 1997~~June 28, ~~Orbit~~1996, FRTechnologies ~~Europe,~~purchased ~~GmbH~~all ~~was~~of ~~incorporated~~the inissued ~~Germany.~~and ~~GmbH~~outstanding ~~develops~~shares ~~compact range~~of ~~measurement~~Flam ~~systems~~& ~~and~~Russell ~~components~~for approximately $1,043,000. ~~and~~The isacquisition ~~responsible~~of ~~for~~Flam ~~sales~~& Russell augmented the Company’s product mix, ~~marketing~~staff of microwave and software engineers and customer ~~support~~ tobase. Flam & Russell has been active in the ~~European~~microwave ~~market~~test and measurement field since 1981.

On June 28 17, ~~1996~~1997, ~~Technologies~~contemporaneously with the completion of its initial public offering, the Company purchased all of the issued and outstanding shares of ~~Flam~~AEMI ~~& Russell~~ for approximately $1~~,043,000~~.2 ~~The~~million. ~~acquisition~~One-half of ~~Flam~~the &purchase ~~Russell~~price ~~augmented~~was payable in cash and the other half was payable by issuance of shares of the Company’s ~~product~~ ~~mix,~~Common ~~staff~~Stock ofat ~~microwave~~the ~~and~~initial ~~software~~offering ~~engineers~~price ~~and~~of ~~customer~~$8.25 ~~base~~per share. ~~Flam~~AEMI &manufactures ~~Russell~~anechoic ~~has~~foam, ~~been active~~a inmicrowave ~~the~~absorbing material that is an integral component of microwave test and measurement ~~field since 1981~~systems.

On ~~June 17~~May 13, ~~1997~~2008, ~~contemporaneously~~Alchut ~~with~~sold ~~the~~all ~~completion~~ of its ~~initial~~3.7 ~~public~~million ~~offering,~~shares ~~the Company~~of ~~purchased~~common ~~all~~stock of the ~~issued~~Company ~~and~~to ~~outstanding~~Satimo, ~~shares~~SA of(“Satimo”) ~~AEMI~~a ~~for~~publicly ~~approximately~~traded ~~$1.2 million. One-half~~company ofon the ~~purchase~~ALTERNEXT ~~price~~stock ~~was~~exchange. ~~payable~~On inJune ~~cash~~30, ~~and~~2009, ~~the~~Microwave ~~other~~Vision ~~half~~Group, ~~was~~SA, ~~payable~~(“Microwave byVision”), ~~issuance~~acquired ~~of shares of~~ the ~~Company’s~~3.7 ~~Common~~million ~~Stock~~common atshares ~~the initial offering price~~ of ~~$8.25~~the ~~per~~Company ~~share.~~through ~~AEMI manufactures anechoic foam,~~ a ~~microwave~~reorganization ~~absorbing~~involving ~~material~~its ~~that~~wholly isowned ansubsidiary, ~~integral component of microwave test and measurement systems~~Satimo.

On May 13, 2008, Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo, SA (“Satimo”) a publicly traded company on the ALTERNEXT stock exchange. On June 30, 2009, Microwave Vision Group, SA, (“Microwave Vision”), acquired the 3.7 million common shares of the Company through a reorganization involving its wholly owned subsidiary, Satimo. 4

4 Index

~~Table~~Industry ~~of Contents~~Overview

~~Industry~~The ~~Overview~~ need for microwave and antenna test and measurement systems and products expanded rapidly during the 1960’s and 1970’s in conjunction with the growth and increased sophistication of the aerospace/defense industry in the United States and Western Europe. In the last 30 years, this need for test and measurement products and systems has expanded beyond aerospace/defense applications to all aspects of modern telecommunications, including personal wireless communications devices, satellite-based communications systems and “smart” automobiles. This expansion has occurred in conjunction with a growing desire among companies to focus on their core competencies and outsource many non-core functions such as the development and manufacture of microwave test and measurement systems.

~~The~~Within ~~need for microwave and antenna test and measurement systems and products expanded rapidly during~~ the ~~1960’s~~wireless ~~and~~communications, ~~1970’s~~satellite, inautomotive ~~conjunction with the growth~~ and ~~increased sophistication of the~~ aerospace/defense ~~industry in the United States and Western Europe. In the last 30 years~~industries, ~~this need for~~ test and measurement products and systems ~~has~~are ~~expanded~~used ~~beyond~~during ~~aerospace/defense applications to~~ all ~~aspects~~stages of ~~modern~~a ~~telecommunications~~product’s life cycle, including ~~personal~~product ~~wireless~~development, ~~communications~~pre-production ~~devices~~qualification, ~~satellite-based~~ ~~communications~~production ~~systems~~testing and ~~“smart”~~product ~~automobiles~~maintenance. ~~This~~Given ~~expansion~~the ~~has~~broad ~~occurred~~scope ~~in conjunction~~of ~~with~~testing aprocedures, ~~growing~~it ~~desire~~is ~~among~~not ~~companies~~uncommon tofor ~~focus~~a onmanufacturer ~~their~~or ~~core~~service ~~competencies~~provider ~~and~~to ~~outsource many~~own ~~non-core~~and ~~functions~~operate ~~such~~more asthan ~~the~~one ~~development and manufacture of~~ microwave test and measurement ~~systems~~ system.

~~Within~~Aerospace/Defense. ~~the~~The ~~wireless~~need ~~communications,~~within ~~satellite,~~the ~~automotive and~~ aerospace/defense ~~industries, test~~community for accurate and ~~measurement~~secure ~~products~~communications and tracking systems ~~are~~led ~~used~~to ~~during~~the ~~all~~emergence ~~stages~~ of amicrowave ~~product’s~~test ~~life~~and ~~cycle, including~~measurement ~~product~~companies ~~development,~~in ~~pre-production~~the ~~qualification, production testing and product maintenance~~1960’s. ~~Given~~Recent ~~the~~growth ~~broad~~in ~~scope~~Department of ~~testing~~Homeland ~~procedures,~~Security itand isDepartment ~~not~~of ~~uncommon~~Defense ~~for~~budgets ahave ~~manufacturer~~provided ~~or service~~additional ~~provider~~opportunities tofor ~~own~~the ~~and operate more than one microwave test and measurement system~~Company.

~~Aerospace/Defense.~~ The ~~need~~industry’s ~~within~~tracking ~~the~~requirements, ~~aerospace/defense~~such ~~community~~as ~~for~~air ~~accurate~~traffic control, precision guided weapons, and ~~secure communications~~data links and ~~tracking~~stealth ~~systems~~aircraft, led to the ~~emergence~~development of ~~microwave~~Radar Cross Section (“RCS”) and the test and measurement ~~companies~~ inof radomes. RCS involves the ~~1960’s~~transmission of microwave signals towards a passive target, such as an aircraft or missile, and then the creation of an “image” of the target by measuring the energy reflected back towards the transmit source. ~~Recent~~Radome ~~growth~~testing inevaluates ~~Department~~the impact of ~~Homeland~~a ~~Security~~radome ~~and~~(the ~~Department~~dome-shaped casing that is placed on the leading edge of ~~Defense budgets~~an ~~have~~aircraft ~~provided~~or ~~additional~~missile ~~opportunities~~to ~~for~~protect the ~~Company~~radar and direction-finding equipment) on the microwave signals that pass through it.

~~The~~Wireless ~~industry’s~~Communications. ~~tracking~~The ~~requirements,~~wireless ~~such~~communications asindustry ~~air~~has ~~traffic~~grown ~~control,~~in ~~precision~~recent ~~guided~~years ~~weapons, and~~as ~~data~~a ~~links~~result ~~and~~of ~~stealth aircraft, led to~~ the development of ~~Radar~~cost-effective ~~Cross~~digital ~~Section~~technologies ~~(“RCS”)~~ and the ~~test~~ ~~and~~gradual ~~measurement~~global deregulation of ~~radomes~~the telecommunications industry. ~~RCS~~Wireless ~~involves~~communications ~~the~~products ~~transmission~~include ofcellular/PCS ~~microwave~~handsets ~~signals~~and ~~towards~~base ~~a passive~~stations, ~~target~~pagers, ~~such~~wireless asPDAs, anand ~~aircraft~~Bluetooth, orWi-Fi ~~missile~~and Wi-Max products, and ~~then~~RFIDs ~~the~~(RF ~~creation~~tags). ofThe anCompany ~~“image”~~expects ofcontinued ~~the~~growth ~~target by~~within ~~measuring~~ the ~~energy~~wireless ~~reflected~~communications ~~back~~industry ~~towards~~in the ~~transmit~~future ~~source.~~due ~~Radome~~to ~~testing~~an ~~evaluates~~increase ~~the impact~~in ofavailable aspectrum, ~~radome~~new ~~(the~~generations ~~dome-shaped~~of ~~casing~~cellular ~~that~~systems, ~~is placed on~~ the ~~leading~~adoption ~~edge~~ of anefficient ~~aircraft~~new ~~or missile~~digital totechnologies ~~protect the radar~~ and ~~direction-finding equipment) on~~ the ~~microwave~~development ~~signals~~of ~~that~~“smart” ~~pass through it~~antennas.

~~Wireless~~Growing ~~Communications.~~worldwide ~~The~~demand for wireless communications ~~industry~~products ~~has~~and ~~grown~~services inhas ~~recent~~generated ~~years~~a asneed ~~a result~~among ofwireless ~~the~~manufacturers ~~development~~and ofservice ~~cost-effective~~providers ~~digital~~for ~~technologies~~systems and ~~the~~products ~~gradual~~that ~~global deregulation~~address oftheir ~~the~~specific ~~telecommunications~~microwave ~~industry.~~test ~~Wireless~~and ~~communications~~measurement ~~products~~needs. ~~include cellular/PCS~~These ~~handsets~~companies ~~and~~operate ~~base~~in ~~stations~~highly-competitive, ~~pagers,~~rapidly ~~wireless~~changing ~~PDAs,~~markets in which the performance and ~~Bluetooth,~~reliability ~~Wi-Fi~~of their systems and ~~Wi-Max~~ products, are essential to achieve and ~~RFIDs~~maintain ~~(RF~~competitive ~~tags)~~advantage. The ~~Company~~accurate ~~expects~~transmission ~~continued~~and ~~growth~~reception ~~within~~of microwave signals are fundamental to the performance of wireless ~~communications~~ ~~industry~~systems inand products. To ensure the ~~future~~successful ~~due~~transfer of voice or data from one point to ananother ~~increase~~and into ~~available~~minimize ~~spectrum~~poor reception, ~~new~~cross ~~generations~~talk ~~of cellular~~and ~~systems~~dropped calls, ~~the~~manufacturers ~~adoption~~and ofservice ~~efficient~~providers ~~new~~conduct ~~digital~~extensive ~~technologies~~testing of both cellular handsets and ~~the~~wireless ~~development~~base ofstations ~~“smart” antennas~~for signal quality, direction, strength and interference.

~~Growing~~Satellite. ~~worldwide~~Satellite-related ~~demand~~markets ~~for~~have ~~wireless~~grown ~~communications~~over ~~products~~the ~~and~~past ~~services~~several has generated a need among wireless manufacturers and service providers for systems and products that address their specific microwave test and measurement needs. These companies operate in highly-competitiveyears, ~~rapidly~~ ~~changing~~driven ~~markets~~by ~~in which~~ the ~~performance~~emergence ~~and reliability~~ of ~~their~~advanced ~~systems~~communication ~~and~~technologies ~~products~~offering ~~are essential~~cost-effective toglobal ~~achieve~~voice, video and ~~maintain~~data ~~competitive advantage. The accurate~~ transmission, ~~and~~GPS, ~~reception~~internet ~~of microwave~~access ~~signals are fundamental to the performance of wireless systems~~ and ~~products~~tracking capabilities. ToSatellites ~~ensure the~~provide ~~successful~~several ~~transfer~~advantages ofover ~~voice~~terrestrial orcommunications ~~data~~networks, ~~from~~including ~~one~~rapid ~~point~~installation ~~to another~~ and ~~to minimize poor reception~~deployment, ~~cross~~ ~~talk~~no ~~and~~incremental ~~dropped~~cost ~~calls,~~as ~~manufacturers~~distances increase and ~~service~~higher ~~providers~~rates ~~conduct extensive testing~~ of ~~both cellular~~data ~~handsets and wireless base stations for signal quality, direction, strength and interference~~transmission.

~~Satellite.~~To ~~Satellite~~ensure that satellite-~~related~~based ~~markets~~communications ~~have~~systems ~~grown~~are ~~over~~effective ~~the~~and ~~past~~reliable, ~~several~~it ~~years~~is essential that both satellites and “earth stations” transmit and receive microwave signals accurately. The accuracy requirements for these satellite systems are critical, ~~driven~~and byfailure ~~the emergence~~to ofdetect ~~advanced~~a ~~communication~~design ~~technologies~~error ~~offering~~could result in a satellite’s “footprint” not covering its intended geographic area. Satellite manufacturers cannot afford to make this kind of error since the cost~~-effective~~ ~~global~~to ~~voice~~manufacture, ~~video~~launch and ~~data~~ ~~transmission,~~insure ~~GPS,~~a ~~internet~~satellite ~~access~~can ~~and~~exceed ~~tracking~~approximately ~~capabilities~~$200 million. ~~Satellites~~Accordingly, ~~provide~~sophisticated ~~several advantages~~microwave ~~over~~test ~~terrestrial~~and ~~communications~~measurement ~~networks,~~systems ~~including~~are ~~rapid~~critical ~~installation~~to satellite and ~~deployment~~earth station manufacturers, no ~~incremental~~as ~~cost~~well as ~~distances~~their ~~increase~~subcontractors and ~~higher~~sub-assembly ~~rates~~manufacturers, ofto ~~data~~ensure ~~transmission~~that their products work properly.

ToAutomotive. ~~ensure~~The ~~that~~world’s ~~satellite-based~~major ~~communications~~manufacturers ~~systems~~of ~~are~~automobiles ~~effective~~ and ~~reliable~~automotive sub-assemblies, itdriven ~~is essential~~by ~~that~~competitive ~~both~~pressures, ~~satellites~~are ~~and~~designing ~~“earth~~new ~~stations~~generations of “smart” ~~transmit~~cars and ~~receive~~trucks. ~~microwave~~These ~~signals accurately.~~vehicles ~~The~~incorporate ~~accuracy~~the ~~requirements~~latest ~~for~~communications ~~these~~and ~~satellite~~safety ~~systems~~devices ~~are~~including ~~critical~~cellular, ~~and~~GPS-based, ~~failure~~navigation ~~to detect~~and aanti-theft ~~design~~systems, ~~error~~satellite ~~could~~radios ~~result~~(e.g. inXM, aSirius), ~~satellite’s~~data ~~“footprint”~~transfer, ~~not~~digital ~~covering~~TV ~~its~~and ~~intended geographic~~collision-avoidance ~~area~~systems. ~~Satellite~~Each ~~manufacturers~~of ~~cannot~~these ~~afford~~features torequires ~~make~~a ~~this~~specialized, ~~kind~~highly-accurate ofmicrowave ~~error~~transmission ~~since~~and reception system. To ensure the ~~cost~~performance ~~to manufacture,~~of ~~launch~~these various systems and ~~insure~~to aassess ~~satellite~~how ~~can~~they ~~exceed~~are ~~approximately~~impacted ~~$200 million.~~by ~~Accordingly, sophisticated~~the ~~microwave~~electromagnetic ~~test~~properties ~~and~~of ~~measurement~~the ~~systems~~car ~~are~~itself, ~~critical~~automotive tomanufacturers ~~satellite~~must test the car and ~~earth~~these ~~station manufacturers,~~devices as ~~well~~a asunit ~~their~~using ~~subcontractors~~a ~~and~~microwave ~~sub-assembly~~test ~~manufacturers,~~and tomeasurement ~~ensure~~system ~~that~~designed ~~their products~~for ~~work~~automotive ~~properly~~applications.

Automotive. The world’s major manufacturers of automobiles and automotive sub-assemblies, driven by competitive pressures, are designing new generations of “smart” cars and trucks. These vehicles incorporate the latest communications and safety devices including cellular, GPS-based, navigation and anti-theft systems, satellite radios (e.g. XM, Sirius), data transfer, digital TV and collision-avoidance systems. Each of these features requires a specialized, highly-accurate microwave transmission and reception system. To ensure the performance of these various systems and to assess how they are impacted by the electromagnetic properties of the car itself, automotive manufacturers must test the car and these devices as a unit using a microwave test and measurement system designed for automotive applications. 5

5 Index

~~Table~~The ofORBIT/FR ~~Contents~~Solution

ORBIT/FR provides its customers with flexible and reliable solutions for their complex microwave test and measurement needs. The Company focuses its efforts and resources on developing state-of-the-art microwave test and measurement systems and products that incorporate specialized technologies and expertise. The Company’s customers have a need for microwave test and measurement systems and products but often do not have the in-house capabilities to develop, or the desire to develop, such systems and products themselves. ORBIT/FR’s ~~Solution~~ systems and products provide customers with cost- effective and user-friendly solutions to their microwave test and measurement needs, thus allowing them to remain focused on their core competencies. The Company’s systems and products incorporate technological expertise developed and acquired by the Company over many years.

~~ORBIT/FR~~The ~~provides~~Company ~~its~~offers ~~customers~~a ~~with~~wide ~~flexible~~range ~~and~~of ~~reliable~~standard ~~solutions~~and ~~for~~custom ~~their complex~~ microwave test and measurement ~~needs.~~solutions ~~The~~for ~~Company~~specialized ~~focuses~~aerospace/defense-related ~~its~~testing, ~~efforts~~cellular/PCS handset testing, cellular base station testing, satellite testing and ~~resources~~automotive ontesting. ~~developing state-of-the-art~~The ~~microwave~~Company’s products include test and measurement ~~systems~~software, ~~and~~microwave ~~products~~receivers, ~~that~~positioner ~~incorporate~~subsystems ~~specialized technologies~~ and ~~expertise.~~controllers, ~~The~~as ~~Company’s~~well ~~customers~~as ~~have~~other microwave products, and a ~~need~~full ~~for~~line ~~microwave~~of ~~test~~RF ~~and~~absorbing ~~measurement systems~~materials, ~~and~~all ~~products~~of ~~but~~which ~~often~~are dotypically ~~not~~incorporated ~~have~~into the ~~in-house~~Company’s ~~capabilities~~systems. toThe ~~develop,~~Company’s orproprietary ~~the~~software ~~desire~~supports ~~to develop,~~the ~~such~~Company’s ~~systems~~own test and measurement products ~~themselves~~as well as those manufactured by third parties. ~~ORBIT/FR~~The Company’s ~~systems~~engineers and ~~products~~other ~~provide~~technical ~~customers with~~staff ~~cost-~~use ~~effective~~their ~~and~~broad ~~user-friendly~~expertise ~~solutions~~ to assess and understand their customers’ specific microwave test and measurement needs, ~~thus~~ ~~allowing~~process ~~them~~orders toquickly, ~~remain~~keep ~~focused~~delivery ontime ~~their~~to ~~core~~a ~~competencies.~~minimum, ~~The~~provide ~~Company’s~~comprehensive ~~systems~~customer ~~and~~support ~~products incorporate technological expertise developed~~ and ~~acquired~~release bynew ~~the~~software ~~Company~~on ~~over~~a ~~many~~regular ~~years~~basis.

The ~~Company offers a wide range of standard and custom microwave test and measurement solutions for specialized aerospace~~ORBIT/~~defense-related~~FR testing, cellular/PCS handset testing, cellular base station testing, satellite testing and automotive testing. The Company’s products include test and measurement software, microwave receivers, positioner subsystems and controllers, as well as other microwave products, and a full line of RF absorbing materials, all of which are typically incorporated into the Company’s systems. The Company’s proprietary software supports the Company’s own test and measurement products as well as those manufactured by third parties. The Company’s engineers and other technical staff use their broad expertise to assess and understand their customers’ specific microwave test and measurement needs, process orders quickly, keep delivery time to a minimum, provide comprehensive customer support and release new software on a regular basis. Strategy

The ~~ORBIT/FR~~Company’s ~~Strategy~~ objective is to strengthen its leadership position in automated microwave test and measurement systems while developing products and systems for a broader range of microwave applications. The principal elements of the Company’s strategy to reach its objective are:

~~The~~Offering ~~Company’s~~Comprehensive ~~objective~~Turnkey isSolutions to ~~strengthen~~Customers ~~its~~. ~~leadership~~Within ~~position~~the inmicrowave ~~automated~~test ~~microwave~~and measurement market, new and existing customers increasingly desire to purchase comprehensive, turnkey test and measurement systems ~~while~~from ~~developing~~a single provider. The Company addresses this desire by providing engineering and project management services, by offering an increasingly broad product line and by maintaining close relationships with outside component suppliers. Additionally, the Company may periodically acquire companies with complementary products and services that can be integrated with the Company’s existing or proposed products and systems, ~~for~~as ait ~~broader~~did ~~range~~with its acquisitions of ~~microwave applications~~Flam & Russell and AEMI. ~~The~~By ~~principal~~acquiring ~~elements~~suppliers of key components of microwave test and measurement systems that the Company’s ~~strategy~~does tonot ~~reach~~already ~~its~~provide, ~~objective~~the ~~are:~~ Company believes, but cannot assure, that it will be able to increase gross margins.

~~Offering~~Maintaining ~~Comprehensive~~Technological ~~Turnkey Solutions to Customers~~Leadership. ~~Within the microwave test and measurement market, new and existing customers increasingly desire to purchase comprehensive, turnkey test and measurement systems from a single provider.~~ The Company ~~addresses~~believes ~~this~~that ~~desire~~it ~~by providing~~has ~~engineering~~sophisticated and ~~project~~diversified ~~management~~technological ~~services,~~capabilities byand ~~offering~~intends anto ~~increasingly~~strengthen ~~broad~~its ~~product line~~technologies ~~and~~ by ~~maintaining~~continuously ~~close~~designing ~~relationships with outside component suppliers. Additionally, the Company may periodically acquire companies with complementary products~~ and ~~services~~developing ~~that~~new ~~can~~software ~~be integrated~~releases ~~with the Company’s existing or proposed products~~ and ~~systems,~~hardware asupgrades itwhich ~~did~~offer ~~with~~greater ~~its acquisitions~~performance ~~of Flam & Russell~~ and ~~AEMI.~~higher By acquiring suppliers of key components of microwave test and measurement systems that the Company does not already provide, the Company believes, but cannot assure, that it will be able to increase gross marginsprecision.

~~Maintaining~~Focusing ~~Technological~~on ~~Leadership~~Standard Products and Proprietary Off-the Shelf Products. ~~The~~Given the diversified needs of the Company’s ~~believes~~customers, ~~that~~no ittwo ~~has~~microwave ~~sophisticated~~test and ~~diversified~~ ~~technological~~measurement ~~capabilities~~systems ~~and~~are ~~intends~~identical. However, the Company seeks to ~~strengthen~~keep ~~its~~the ~~technologies~~costs of customization to a minimum by ~~continuously~~ designing and ~~developing~~delivering ~~new~~specific ~~software~~types ~~releases~~of ~~and~~systems ~~hardware~~that ~~upgrades~~maximize ~~which~~the ~~offer~~use ~~greater performance~~of the Company’s proprietary off-the-shelf products. This approach enables the Company to optimize its margins while offering its customers tailor-made solutions built around proven high-quality and ~~higher~~reliable ~~precision~~products.

~~Focusing~~Continued focus on ~~Standard~~Expanding ~~Products~~U.S. ~~and~~Aerospace/Defense ~~Proprietary Off-the Shelf Products~~Market. ~~Given~~As ~~the~~a ~~diversified needs~~result of ~~the~~its ~~Company’s~~reputation ~~customers, no two microwave test~~ and ~~measurement~~diverse ~~systems~~product ~~are identical. However~~line, the Company ~~seeks~~maintains torelationships ~~keep~~with the ~~costs~~U.S. ofgovernment ~~customization to a minimum by designing~~ and ~~delivering~~ ~~specific~~several ~~types~~ of ~~systems that maximize~~ the ~~use~~leading ofdefense ~~the Company’s proprietary off-the-shelf products~~contractors. ~~This~~With ~~approach~~expected ~~enables~~increases ~~the~~in ~~Company~~Department toof ~~optimize~~Homeland ~~its~~Security ~~margins~~and ~~while~~Department ~~offering its~~of ~~customers~~Defense ~~tailor-made~~budgets, ~~solutions~~the ~~built~~Company ~~around~~expects ~~proven~~to ~~high-quality~~expand ~~and~~this ~~reliable products~~relationship.

~~Continued~~Pursuing ~~focus~~Growth onin ~~Expanding~~International UMarkets.S Approximately 65% and 53% of the Company’s revenues during 2011 and 2010, respectively, were derived from international customers (i.e. ~~Aerospace/Defense~~customers ~~Market~~outside of North America). AsThe aCompany ~~result~~believes ofthat ~~its~~the ~~reputation~~international microwave test and ~~diverse~~ ~~product~~measurement ~~line~~marketplace will grow over the next several years, due in large part to worldwide economic development, governmental policies aimed at improving the ~~Company~~communications ~~maintains~~infrastructure ~~relationships~~in ~~with~~developing countries and the Uincreasing globalization of commerce.S. ~~government~~The Company has devoted and ~~several~~intends to continue to devote significant efforts to increasing its share of the ~~leading~~international ~~defense~~market ~~contractors.~~for ~~With~~microwave ~~expected~~test ~~increases~~and inmeasurement ~~Department~~systems by strengthening and expanding its sales network through the establishment of ~~Homeland~~foreign ~~Security~~sales and ~~Department~~ customer service centers and the appointment of ~~Defense~~additional ~~budgets~~international sales representatives. In addition, the Company ~~expects~~believes it has a competitive advantage due to ~~expand~~the ~~this~~duty-free ~~relationship~~status of its products manufactured in Israel and sold into the European Union.

~~Table of Contents~~Index

~~Pursuing~~Leveraging ~~Growth~~Technological inExpertise ~~International~~to ~~Markets.~~Expand ~~Approximately~~into ~~53%~~Complimentary ~~and 48% of the Company’s revenues during 2010 and 2009, respectively, were derived from international customers (i~~Markets.e. ~~customers outside of North America).~~ The Company ~~believes~~intends ~~that in addition~~ to ~~domestic~~leverage ~~growth~~its astechnological aexpertise ~~result of increases~~ in ~~Department of Defense and Homeland Security budgets, the international~~ microwave test and measurement ~~marketplace~~systems ~~will also grow over the next several years, due in large part~~ to ~~worldwide~~expand ~~economic~~into ~~development,~~complementary ~~governmental~~markets ~~policies~~that ~~aimed at improving~~ the ~~communications~~ ~~infrastructure in developing countries and the increasing globalization of commerce. The~~ Company ~~has~~believes ~~devoted~~offer ~~and~~high ~~intends~~growth topotential ~~continue to devote significant efforts to increasing its share of the international market for microwave test~~ and ~~measurement~~where ~~systems by strengthening and expanding its sales network through~~ the ~~establishment of foreign sales and customer service centers and the appointment of additional international sales representatives. In addition, the~~ Company ~~believes~~’s ittechnology ~~has~~provides a competitive ~~advantage due to the duty-free status of its products manufactured in Israel and sold into the European Union~~advantages.

~~Leveraging~~Microwave ~~Technological~~Products. ~~Expertise~~The Company believes that opportunities exist to ~~Expand~~apply ~~into~~the ~~Complimentary~~Company’s ~~Markets~~core technologies to the design, manufacture and marketing of products that incorporate microwave technology. The Company intends to ~~leverage~~continue marketing its ~~technological~~radial ~~expertise~~power incombiners, ~~microwave~~amplifiers, ~~test~~antennas and ~~measurement~~mixers, ~~systems~~and plans to ~~expand~~develop ~~into complementary~~and ~~markets~~sell ~~that~~additional microwave-based products in the future. The Company believes ~~offer~~its ~~high~~large ~~growth~~customer ~~potential~~base ~~and~~will ~~where~~give ~~the~~it ~~Company’s technology~~a ~~provides~~ competitive ~~advantages~~advantage in marketing these products.

~~Microwave~~Systems ~~Products. The Company believes that opportunities exist to apply the Company’s core technologies to the design, manufacture~~ and marketing of products that incorporate microwave technology. The Company intends to continue marketing its radial power combiners, amplifiers, antennas and mixers, and plans to develop and sell additional microwave-based products in the future. The Company believes its large customer base will give it a competitive advantage in marketing these products. Products

~~Systems~~Since its founding, the Company has expanded from distributing individual microwave test and ~~Products~~ measurement components to providing turnkey solutions, which can include chamber design, RF absorbing materials, antenna measurement and/or RCS subsystems, RF test equipment and software suites, and a wide range of microwave test and measurement solutions. Components of an ORBIT/FR automated microwave test and measurement system include proprietary software and hardware products which can be combined into standard or customized configurations to meet customers’ specific needs.

~~Since~~The ~~its founding, the~~ Company ~~has~~believes ~~expanded~~that ~~from~~one ~~distributing~~of ~~individual~~its ~~microwave~~principal ~~test~~strengths ~~and measurement~~is ~~components~~its toexperienced ~~providing turnkey solutions, which can include chamber~~ design, ~~RF absorbing~~team ~~materials,~~that ~~antenna~~solves ~~measurement~~complex ~~and/or~~technical ~~RCS subsystems, RF test equipment~~ and ~~software suites,~~practical ~~and a wide range of microwave test and measurement solutions~~problems. Components of an ORBIT/FR automated microwave test and measurement system include proprietary software and hardware products which can be combined into standard or customized configurations to meet customers’ specific needs.

Microwave Test and Measurement Systems. The Company ~~believes~~designs, ~~that~~manufactures ~~one~~and markets automated microwave test and measurement systems. In addition to providing most of these systems’ component parts, the Company also integrates the systems and trains its ~~principal~~customers ~~strengths~~in isuse of the systems. Although most customers purchase fully integrated turnkey microwave test and measurement systems, the Company also sells its ~~experienced~~hardware ~~design~~and ~~team~~software products individually as replacement parts or components of custom-designed systems. The Company offers seven types of microwave test and measurement systems. The first, antenna measurement systems, are generic systems that ~~solves complex~~can ~~technical~~be adapted for many uses, and ~~practical~~the ~~problems~~other types are designed and sold in response to well-defined microwave test and measurement needs within specific industries. Prices for a typical ORBIT/FR system range from $50,000 to $1,000,000, but large systems have been sold for over $3 million.

~~Microwave~~Antenna ~~Test and~~ Measurement Systems. ~~The~~All ~~Company~~products ~~designs,~~and ~~manufactures~~systems ~~and~~that ~~markets automated~~receive or transmit microwave ~~test~~signals ~~and~~rely ~~measurement~~on ~~systems~~antennas. InAccordingly, ~~addition~~items tosuch ~~providing~~as ~~most~~microwave ofradios, ~~these~~GPS ~~systems’ component~~receivers, ~~parts~~cellular handsets and base-stations, ~~the~~field ~~Company~~service/delivery ~~also~~equipment, ~~integrates~~satellite ~~the~~earth ~~systems~~stations and ~~trains~~radios, ~~its~~precision ~~customers~~guided inmissiles, ~~use~~radar ofand ~~the systems~~commercial and military aircraft need to have their antennas tested to ensure satisfactory performance characteristics. ~~Although~~The ~~most~~Company’s ~~customers~~antenna ~~purchase~~measurement ~~fully~~systems ~~integrated~~offer ~~turnkey~~both ~~microwave~~manufacturers ~~test~~and service providers user-friendly and cost-effective solutions for their antenna measurement needs. The systems, ~~the~~test ~~Company~~for ~~also~~signal ~~sells~~quality, ~~its~~direction, ~~hardware~~strength and ~~software~~interference ~~products~~and ~~individually~~can asbe ~~replacement parts~~adapted orto ~~components~~perform testing in each of ~~custom-designed~~the ~~systems.~~stages ~~The~~of ~~Company~~a ~~offers~~product’s ~~seven~~life: ~~types~~development; ofqualification; ~~microwave~~production; ~~test~~ and ~~measurement systems~~maintenance. ~~The~~Although ~~first,~~ antenna measurement systems, ~~are~~differ ~~generic~~significantly ~~systems~~from ~~that~~one ~~can~~application ~~be adapted~~to ~~for many uses~~another, ~~and~~all of the ~~other~~Company’s ~~types~~systems ~~are~~incorporate ~~designed~~a ~~and~~personal ~~sold~~computer inrunning ~~response~~specialized toproprietary ~~well-defined~~ software, a microwave ~~test~~receiver, a positioning subsystem and ~~measurement~~at ~~needs~~least ~~within~~one ~~specific~~additional ~~industries~~antenna or probe. ~~Prices~~The systems can be designed for use in a ~~typical~~wide ~~ORBIT/FR system~~variety ~~ranges~~of ~~from~~different ~~$50~~test environments,~~000~~ toranging ~~$1,000,000,~~from ~~but~~a ~~large~~small ~~systems~~anechoic ~~have~~chamber ~~been~~to ~~sold~~an ~~for~~outdoor ~~over~~range ~~$3 million~~covering several acres. The Company offers three types of antenna measurement methods:

Antenna Measurement Systems. All products and systems that receive or transmit microwave signals rely on antennas. Accordingly, items such as microwave radios, GPS receivers, cellular handsets and baseFar-~~stations,~~ field ~~service/delivery~~: ~~equipment,~~Traditional ~~satellite~~method ~~earth~~generally ~~stations~~used ~~and~~outdoors radios, precision guided missiles, radar and commercial and military aircraft need to have their antennas tested to ensure satisfactory performance characteristics. The Company’s antenna measurement systems offer both manufacturers and service providers userNear-~~friendly~~field: ~~and cost~~Cost-effective ~~solutions for~~indoor ~~their~~method ~~antenna~~using ~~measurement~~mathematical ~~needs.~~conversion ~~The~~tools ~~systems~~Compact ~~test~~Range ~~for signal quality, direction, strength and interference and can be adapted to perform testing in each of the stages of a product’s life~~: ~~development;~~ ~~qualification;~~High-end ~~production;~~indoor ~~and~~method ~~maintenance.~~using ~~Although antenna measurement systems differ significantly from one application to another, all of the Company’s systems incorporate~~ a ~~personal~~ ~~computer running specialized proprietary software, a~~ microwave receiver, a positioning subsystem and at least one additional antenna or probe. The systems can be designed for use in a wide variety of different test environments, ranging from a small anechoic chamber to an outdoor range covering several acres. The Company offers three types of antenna measurement methods: reflector

~~Far-field:~~The ~~Traditional~~Company ~~method~~also ~~generally~~has ~~used~~developed ~~outdoors~~advanced ~~Near-field:~~systems ~~Cost-effective~~that ~~indoor~~combine ~~method~~these ~~using~~measurement ~~mathematical~~methods, ~~conversion~~such ~~tools~~as ~~Compact~~far-field ~~Range:~~and ~~High~~near-~~end~~field, ~~indoor~~in ~~method using~~ a ~~microwave~~single ~~reflector~~chamber.

~~The Company also has developed advanced systems that combine these measurement methods, such as far-field and near-field, in a single chamber.~~ 7

7 Index

~~Table~~Cellular/PCS Base Station Systems. The Company develops and sells test and measurement systems used to assess the microwave performance characteristics of ~~Contents~~cellular/PCS base stations and “smart” antennas. These systems enable cellular/PCS base station antenna manufacturers to design and build efficient and reliable products, and allow wireless communications service providers to monitor more efficiently the performance of their base stations. The existing system design is based on the Company’s cylindrical near-field technology and is designed for indoor use.

~~Cellular/PCS~~Satellite ~~Base Station~~ Systems. The Company develops and sells microwave test and measurement systems ~~used~~ tofor ~~assess~~satellite ~~the~~communication ~~microwave~~and ~~performance~~broadcast ~~characteristics~~systems ofwhich ~~cellular/PCS~~test ~~base~~the ~~stations~~satellite ~~and~~performance ~~“smart”~~ of the satellite’s antennas. These systems ~~enable~~also ~~cellular/PCS~~test ~~base~~the ~~station~~transmit ~~antenna~~and ~~manufacturers~~receive tocharacteristics ~~design~~of ~~and~~the ~~build efficient~~active ~~and~~array ~~reliable~~antennas ~~products,~~used ~~and~~on ~~allow~~most ~~wireless~~modern ~~communications~~satellites ~~service~~and ~~providers~~can have the ability to ~~monitor more~~identify ~~efficiently~~and ~~the~~diagnose ~~performance~~malfunctions ofwithin ~~their~~these ~~base~~complex ~~stations~~antennas. The ~~existing~~Company’s ~~system~~satellite ~~design~~test issystems ~~based~~utilize oneither ~~the Company’s~~near-field ~~cylindrical~~or compact range technology. Both technologies are equally effective from a test and measurement viewpoint, but each offers certain benefits. A near-field ~~technology~~system offers diagnostic capabilities and is ~~designed~~generally ~~for~~less ~~indoor~~expensive than a comparably equipped compact range system, but a compact range system is faster and easier to use.

~~Satellite~~Automotive Systems. ~~The~~ORBIT/FR ~~Company~~believes ~~develops~~it ~~and~~is ~~sells~~a ~~microwave~~leader ~~test~~in the design and ~~measurement~~delivery ~~systems~~of ~~for satellite~~high-performance ~~communication~~test and ~~broadcast~~measurement systems ~~which~~for ~~test~~automobile ~~the~~manufacturers ~~satellite~~and ~~performance~~manufacturers of ~~the satellite’s~~automotive ~~antennas~~sub-assemblies. ~~These~~The Company’s systems ~~also~~incorporate ~~test~~both ~~the~~near-field ~~transmit~~and far-field technologies and ~~receive~~are ~~characteristics~~thus capable of ~~the active~~microwave ~~array~~sampling ~~antennas~~over ~~used~~a onwide ~~most~~range ~~modern~~of ~~satellites~~frequencies. ~~and~~A ~~can~~typical ~~have~~system ~~the~~includes ~~ability~~a tolarge ~~identify~~mechanical ~~and diagnose~~arm ~~malfunctions~~that ~~within~~sweeps ~~these~~over ~~complex~~a ~~antennas~~large turntable. The ~~Company’s~~car ~~satellite~~being ~~test~~tested ~~systems~~rests ~~utilize either~~on ~~near-field~~the orturntable, ~~compact~~and ~~range~~both ~~technology.~~the ~~Both~~turntable ~~technologies~~and the mechanical arm are ~~equally~~set ~~effective~~in motion based upon instructions received from athe ~~test and~~Company’s measurement ~~viewpoint,~~software. ~~but~~The ~~each~~systems’ ~~offers~~broad ~~certain~~capabilities ~~benefits.~~are Aessential ~~near-field~~given ~~system~~a ~~offers~~growing ~~diagnostic capabilities~~trend ~~and~~by isautomobile ~~generally~~manufacturers ~~less~~to ~~expensive~~integrate ~~than~~advanced amicrowave ~~comparably~~technologies ~~equipped~~such ~~compact~~as ~~range~~cellular/PCS, GPS-based navigation system, ~~but~~satellite ~~a compact~~radios, ~~range~~digital ~~system~~TV isand ~~faster~~collision-avoidance ~~and~~systems ~~easier~~into totheir ~~use~~advanced next generation cars.

~~Automotive~~RCS Systems. ~~ORBIT/FR~~The ~~believes~~Company’s itRadar isCross aSection ~~leader~~measurement insystems ~~the~~transmit ~~design~~microwave ~~and~~signals ~~delivery~~towards ~~of high-performance~~a ~~test~~passive ~~and~~target ~~measurement systems for automobile manufacturers~~ and ~~manufacturers~~then ~~of automotive~~measure ~~sub-assemblies.~~the ~~The~~energy ~~Company’s~~reflected ~~systems~~back ~~incorporate~~towards ~~both~~the ~~near-field~~transmit ~~and~~source. ~~far-field technologies~~In ~~and~~an ~~are~~RCS ~~thus~~system, ~~capable~~the ofpassive ~~microwave~~target ~~sampling~~is ~~over~~typically a ~~wide~~model ~~range~~or offull ~~frequencies.~~scale Aaircraft ~~typical system~~or ~~includes~~missile ~~a large mechanical arm~~ that ~~sweeps~~is ~~over~~mounted on a ~~large~~special ~~turntable.~~“low-RCS” ~~The~~testing ~~car~~pylon ~~being~~capable ~~tested rests~~of onrotating the ~~turntable,~~target. ~~and~~Data ~~both~~collected ~~the~~at ~~turntable~~various ~~and~~rotation ~~the~~angles ~~mechanical~~and ~~arm~~frequencies ~~are~~can ~~set~~be inprocessed ~~motion~~to ~~based~~form ~~upon instructions~~an ~~received~~electromagnetic ~~from~~“image” of the ~~Company’s measurement software~~target. ~~The~~This ~~systems’~~type ~~broad~~of ~~capabilities~~information ~~are essential~~enables ~~given~~the adesign ~~growing~~engineer ~~trend by automobile manufacturers~~ to ~~integrate~~assess ~~advanced~~more ~~microwave technologies~~accurately ~~such~~the asdetailed ~~cellular/PCS,~~radar ~~GPS-based~~signature ~~navigation~~of ~~system,~~the ~~satellite~~target. ~~radios,~~The ~~digital~~Company TVbelieves ~~and collision-avoidance~~that ~~systems~~it ~~into~~is ~~their~~a ~~advanced~~market ~~next~~leader ~~generation~~in ~~cars~~this field.

~~RCS~~Radome Systems. ~~The~~A ~~Company’s~~radome ~~Radar~~is ~~Cross~~a ~~Section~~dome-shaped ~~measurement~~casing ~~systems~~that ~~transmit~~is ~~microwave~~placed ~~signals towards~~on athe ~~passive~~leading ~~target~~edge ~~and~~of ~~then~~a ~~measure~~commercial ~~the~~aircraft, ~~energy~~military ~~reflected~~aircraft ~~back~~or ~~towards~~missile ~~the~~to ~~transmit~~protect ~~source.~~the ~~In an~~radar ~~RCS~~and ~~system,~~direction-finding ~~the~~equipment. ~~passive~~A ~~target~~radome is typically amanufactured ~~model~~using fiberglass or ~~full~~other ~~scale~~materials ~~aircraft~~that orare ~~missile~~designed ~~that~~to be “transparent” to microwave signals. Testing is ~~mounted~~ onperformed aperiodically ~~special~~to ~~“low-RCS”~~ensure ~~testing~~that ~~pylon~~microwave ~~capable~~signals ofare ~~rotating~~not ~~the~~degraded ~~target.~~or ~~Data~~deflected ~~collected~~as ~~at various~~they ~~rotation~~pass ~~angles~~through ~~and~~the ~~frequencies~~radome. ~~can~~The beCompany’s ~~processed~~systems are designed to ~~form~~measure anradome ~~electromagnetic~~performance ~~“image”~~by ofanalyzing the ~~target.~~ ~~This~~path ~~type~~ of ~~information~~microwave ~~enables~~signals as they pass through the ~~design~~radome ~~engineer~~and tothen ~~assess~~comparing ~~more~~it ~~accurately~~to the ~~detailed radar~~propagation ~~signature~~path ofwhen the ~~target~~radome is not present. ~~The~~Radome ~~Company~~systems ~~believes~~use ~~that~~far-field itmeasurement ismethods abut ~~market~~rely ~~leader~~on inhigh ~~this~~positioning accuracy normally required by near-field systems.

~~Radome~~Custom Systems. AFrom ~~radome~~time isto ~~a dome-shaped casing that is placed on the leading edge of a commercial aircraft~~time, ~~military aircraft or missile to protect~~ the ~~radar~~Company designs and ~~direction-finding equipment.~~manufactures Acustom ~~radome is typically manufactured using fiberglass or other materials that are designed to be “transparent” to~~ microwave ~~signals.~~test ~~Testing~~and ismeasurement ~~performed~~systems ~~periodically~~for toa ~~ensure~~wide ~~that microwave~~variety ~~signals~~of ~~are~~uses ~~not~~and ~~degraded~~applications ~~or deflected as they pass through the radome~~worldwide. The Company’s ~~systems~~ ~~are~~broad ~~designed~~microwave toand ~~measure~~antenna ~~radome~~expertise ~~performance~~has byenabled ~~analyzing~~it ~~the~~to ~~path~~obtain ofthese ~~microwave~~contracts, ~~signals~~and ~~as they~~the ~~pass~~Company ~~through~~intends ~~the~~to ~~radome~~bid ~~and~~for ~~then~~similar ~~comparing~~jobs itin to the ~~propagation~~future ~~path~~if ~~when~~ the ~~radome~~expertise isgained ~~not present.~~in ~~Radome~~designing such systems ~~use~~is ~~far-field~~deemed ~~measurement~~to ~~methods~~be ~~but~~of ~~rely~~strategic onvalue ~~high~~to ~~positioning~~the ~~accuracy normally required by near-field systems~~Company.

~~Custom~~Multi-probe Measurement Systems. ~~From~~Through ~~time~~Microwave ~~to time~~Vision, the Company ~~designs~~has ~~and~~access ~~manufactures~~to ~~custom~~a ~~microwave~~new ~~test and~~multi-probe measurement ~~systems for a wide variety of uses and applications worldwide~~technology. ~~The~~This ~~Company’s~~technology ~~broad microwave~~allows ~~and~~for ~~antenna~~a ~~expertise~~substantial ~~has~~increase ~~enabled~~in itmeasurement tospeed. ~~obtain~~We ~~these~~believe ~~contracts,~~that ~~and~~ the ~~Company~~combination ~~intends to~~of ~~bid~~this ~~for~~technology ~~similar~~with ~~jobs in~~ the ~~future~~Company’s ~~if the expertise gained in designing such~~ systems isprovides ~~deemed to~~the beCompany ofwith ~~strategic~~a ~~value~~competitive ~~to the Company~~advantage.

~~Multi-probe~~Microwave Test and Measurement ~~Systems~~Software Products. Through ~~Microwave~~its ~~Vision~~959Spectrum and MiDAS software packages, ~~the~~ORBIT/FR offers automatic measurement software for microwave test and measurement systems. The Company’s ~~has~~software ~~access~~products toare Windows-based programs that provide the customer with a ~~new multi~~consistent user-~~probe~~friendly interface with the test and measurement ~~technology~~system. ~~This~~The ~~technology~~software ~~allows~~products ~~for~~have a ~~substantial~~robust ~~increase~~and ~~in measurement~~modular ~~speed~~structure that enables the Company to easily add features for current and future customers. WeThe ~~believe~~software ~~that~~uses far-field and/or near-field algorithms to generate accurate results, and the ~~combination~~computational ofmethodologies ~~this~~used ~~technology~~have ~~with~~gained acceptance throughout the microwave test and measurement community. The software supports the Company’s ~~systems provides~~own measurement equipment as well as equipment manufactured by third parties. The Company’s software products are designed to be “off-the-shelf,” but are versatile and can be customized by the Company’s ~~with~~or athe ~~competitive~~customer’s ~~advantage~~technical personnel to suit specific needs.

Microwave Test and Measurement Software Products. Through its 959 Spectrum and MiDAS software packages, ORBIT/FR offers automatic measurement software for microwave test and measurement systems. The Company’s software products are Windows-based programs that provide the customer with a consistent user-friendly interface with the test and measurement system. The software products have a robust and modular structure that enables the Company to easily add features for current and future customers. The software uses far-field and/or near-field algorithms to generate accurate results, and the computational methodologies used have gained acceptance throughout the microwave test and measurement community. The software supports the Company’s own measurement equipment as well as equipment manufactured by third parties. The Company’s software products are designed to be “off-the-shelf,” but are versatile and can be customized by the Company’s or the customer’s technical personnel to suit specific needs. 8

8 Index

~~Table~~Although software can vary between systems, it always consists of ~~Contents~~three primary modules: data acquisition, data analysis and report writing. The software’s data acquisition module records actual measurements as it controls the microwave measurement equipment, the positioning subsystem, and often the source antenna and/or the antenna being measured. Variables such as frequency, power level, amplitude, phase, rotary and/or linear motion, polarization, transmit/receive switching, electrical beam pointing and polarization switching are all controlled by the Company’s measurement software. The multidimensional results obtained are stored in a computer file for subsequent analysis. The software’s data analysis module processes the acquired data using sophisticated microwave and signal processing algorithms developed by the Company and the National Institute of Standards and Technology. The data analysis module transforms the acquired data into easily-understood numerical information and graphic representations, thus providing the customer with the data required to satisfy its internal requirements and those of its own customers. The software’s report writing module can be customized to meet each customer’s needs.

~~Although~~Positioner ~~software can vary between systems, it always consists of three primary modules: data acquisition, data analysis and report writing~~Subsystems. The ~~software’s~~positioner ~~data~~subsystem ~~acquisition~~is ~~module records actual measurements as it controls~~ the ~~microwave~~collection ~~measurement~~of equipment, ~~the~~that ~~positioning~~holds ~~subsystem, and often~~ the ~~source~~device ~~antenna~~under ~~and/or~~test ~~the antenna being measured. Variables such as frequency, power level, amplitude, phase, rotary~~ and~~/or~~ ~~linear~~causes ~~motion,~~it ~~polarization,~~to ~~transmit/receive~~be ~~switching, electrical~~moved ~~beam~~according ~~pointing~~to ~~and polarization switching are all controlled by~~ the ~~Company’s~~needs ~~measurement software.~~of ~~The multidimensional results obtained are stored in a computer file for subsequent analysis. The software’s data analysis module processes~~ the ~~acquired data using sophisticated microwave and signal processing algorithms developed by the Company and the National Institute of Standards and Technology~~test. ~~The~~A ~~data~~typical ~~analysis~~positioner ~~module~~subsystem ~~transforms~~may ~~the~~include ~~acquired data into easily-understood numerical information and graphic representations, thus providing~~ the ~~customer with~~following ~~the data required to satisfy its internal requirements and those of its own customers. The software’s report writing module can be customized to meet each customer’s needs.~~ components:

~~Positioner Subsystems~~Positioners. ~~The~~A positioner ~~subsystem~~ is the ~~collection~~item ofupon ~~equipment~~which ~~that holds~~ the device under test ~~and~~is ~~causes~~placed while it is being tested. The Company’s positioners are rugged, yet highly precise, devices that adjust themselves in accordance with the positioning instructions received from the measurement software. Special circuitry and mechanical design features built into the positioner enable the data acquired from the antenna under test to betravel ~~moved~~efficiently ~~according~~through the positioner to the ~~needs~~computer ofto be analyzed. The Company’s simple positioners rotate around a single axis, while the Company’s more elaborate positioners incorporate up to three axes. An automated microwave test and measurement system requires one or more positioners. AThe ~~typical~~ Company offers over 200 different positioner ~~subsystem~~models ~~may~~and ~~include~~believes that its positioners are among the ~~following~~most ~~components:~~ accurate.

~~Positioners.~~Positioner AControllers ~~positioner~~and isPower ~~the~~Control ~~item~~Units. ~~upon~~The ~~which~~Company ~~the~~manufactures ~~device~~positioner ~~under~~controllers ~~test~~and ispower ~~placed~~control ~~while~~units it(PCUs) ~~is being~~as ~~tested.~~well ~~The~~as ~~Company’s~~models ~~positioners~~that ~~are~~combine ~~rugged,~~these ~~yet~~two ~~highly~~products ~~precise,~~into ~~devices~~one ~~that~~component. ~~adjust themselves~~Working intogether, ~~accordance~~the ~~with~~positioner controller and the ~~positioning~~PCU ~~instructions~~act ~~received~~as ~~from~~the “translators” between the measurement software~~. Special~~ ~~circuitry~~ and ~~mechanical~~the ~~design~~positioner. ~~features~~The ~~built~~positioner ~~into~~controller ~~the~~receives ~~positioner~~digital ~~enable~~instructions from the ~~data~~microwave ~~acquired from~~software ~~the~~and ~~antenna~~translates ~~under~~them ~~test~~into toanalog ~~travel~~signals ~~efficiently~~understood ~~through~~by the ~~positioner~~PCU. toThese ~~the~~analog ~~computer~~signals toare ~~be analyzed.~~then ~~The~~amplified ~~Company’s~~by ~~simple~~the ~~positioners~~PCU ~~rotate~~to ~~around~~provide aprecisely ~~single~~calibrated ~~axis,~~DC ~~while~~power to the ~~Company~~positioner’s ~~more elaborate~~electric ~~positioners~~motors, ~~incorporate~~which upthen tooperate ~~three~~at ~~axes.~~a Anuser-defined ~~automated~~speed ~~microwave~~to ~~test~~move ~~and~~the ~~measurement system~~antenna ~~requires~~or ~~one~~device orunder ~~more~~test ~~positioners~~through the desired positions. The Company offers ~~over~~four ~~200~~positioner ~~different~~controller ~~positioner~~models, two PCU models and ~~believes~~four models that ~~its~~combine ~~positioners~~both ~~are~~positioner ~~among~~controller ~~the~~and ~~most accurate~~PCU.

~~Positioner~~Planar ~~Controllers~~Scanners. ~~and~~A ~~Power~~planar ~~Control~~scanner ~~Units.~~is ~~The~~a ~~Company~~rectangular ~~manufactures~~device ~~positioner controllers~~that ~~and~~enables ~~power~~a ~~control~~probe ~~units~~antenna ~~(PCUs)~~to asbe ~~well~~moved asalong ~~models~~an ~~that~~x- ~~combine~~and ~~these~~y-axis ~~two~~so ~~products~~that ~~into one~~its ~~component.~~position ~~Working~~at ~~together,~~any ~~the~~time ~~positioner~~is ~~controller~~known and ~~the~~can ~~PCU~~be ~~act~~exactly asreplicated. ~~the~~Planar ~~“translators” between~~scanners ~~the~~are ~~measurement~~mounted ~~software~~to ~~and~~enable the ~~positioner.~~probe ~~The~~to ~~positioner~~be ~~controller~~moved ~~receives~~throughout ~~digital instructions from~~ the ~~microwave~~height ~~software~~ and ~~translates~~width ~~them~~dimensions ~~into~~of ~~analog signals understood by~~ the ~~PCU~~ scanner. ~~These~~Scanners ~~analog~~enable ~~signals~~test ~~are~~engineers ~~then~~to ~~amplified~~accurately byand ~~the~~reliably ~~PCU~~analyze tomany ~~provide~~aspects ~~precisely~~of ~~calibrated DC power to~~ the ~~positioner’s~~microwave ~~electric~~signals ~~motors,~~radiating ~~which~~from ~~then operate at a user-defined speed to move~~ the antenna or device under test ~~through the desired positions~~. The Company offers ~~four~~24 ~~positioner~~standard ~~controller models,~~scanners ~~two~~ranging ~~PCU~~in ~~models~~size ~~and~~from ~~four~~3 ~~models~~feet ~~that~~by ~~combine~~3 ~~both~~feet ~~positioner~~to ~~controller~~over ~~and~~100 ~~PCU~~feet by 100 feet.

~~Planar~~Pylons ~~Scanners. A planar scanner is a rectangular device that enables a probe antenna to be moved along an x-~~ and ~~y-axis~~Model soTowers. ~~that~~Pylons ~~its position at any time is known~~ and ~~can~~model betowers ~~exactly replicated. Planar scanners~~ are ~~mounted~~used toin ~~enable~~many ~~the~~microwave ~~probe~~test toand bemeasurement ~~moved~~applications ~~throughout the height~~ and ~~width~~ ~~dimensions~~range ofin ~~the~~size ~~scanner.~~from ~~Scanners~~very ~~enable~~large ~~test engineers~~ to ~~accurately~~very ~~and~~small. ~~reliably~~Large ~~analyze many~~pylons ~~aspects~~can ofcarry ~~the~~substantial ~~microwave~~loads ~~signals~~in ~~radiating~~indoor ~~from the antenna~~ or ~~device~~outdoor ~~under~~environments, ~~test.~~and ~~The~~certain ~~Company offers~~models 24can ~~standard~~even ~~scanners~~support ~~ranging~~a infull-sized ~~size~~aircraft. ~~from~~Pylons 3designed ~~feet~~to byminimize 3measurement ~~feet~~interference toare ~~over~~almost ~~100~~always ~~feet~~used byin ~~100~~RCS ~~feet~~systems.

~~Pylons~~Other ~~and~~Microwave ~~Model~~Products ~~Towers~~. ~~Pylons~~The ~~and~~Company ~~model~~has ~~towers~~developed ~~are~~several ~~used in many~~ microwave ~~test~~products ~~and measurement~~used ~~applications and range~~ in ~~size~~the ~~from~~larger ~~very~~microwave ~~large to very small~~industry. Large pylons can carry substantial loads in indoor or outdoor environments, and certain models can even support a full-sized aircraft. Pylons designed to minimize measurement interference are almost always used in RCS systems.

~~Other~~Radial ~~Microwave~~Power ~~Products~~Combiners. The Company’s ~~has~~radial ~~developed~~power combiners offer a highly efficient electromagnetic mechanism to combine several ~~microwave~~identical ~~products~~low-energy ~~used~~signals together to make a single high-energy signal. Radial power combiners have many uses, but their most common application is in ~~the larger~~high-power microwave ~~industry~~transmitters.

~~Radial~~Antennas, ~~Power~~Probes ~~Combiners~~and Other Microwave Accessories. The Company’s ~~radial~~designs ~~power~~and ~~combiners~~manufactures ~~offer~~antennas, aprobes ~~highly~~and ~~efficient electromagnetic~~other ~~mechanism~~microwave toaccessories. ~~combine~~These ~~several~~products ~~identical~~are ~~low-energy~~used ~~signals~~in ~~together~~the toCompany’s ~~make~~microwave atest ~~single high-energy~~and ~~signal.~~measurement ~~Radial~~systems, ~~power~~and ~~combiners~~they ~~have~~are ~~many~~also ~~uses,~~sold ~~but~~to ~~their~~customers ~~most~~as ~~common application is in high~~stand-~~power~~alone ~~microwave transmitters~~items.

~~Antennas,~~Sales ~~Probes~~ and Other Microwave Accessories. The Company designs and manufactures antennas, probes and other microwave accessories. These products are used in the Company’s microwave test and measurement systems, and they are also sold to customers as stand-alone items. Marketing

~~Sales~~The Company markets and ~~Marketing~~ sells its products in the United States through direct regional sales managers including Microwave Vision’s world-wide direct sales force and through independent sales representatives that target specific geographic and strategic markets. Internationally, the Company has established sales and customer service centers in Israel and Germany and has a network of distributors, agents and representatives for sales, marketing and customer support throughout Europe and Asia.

The Company markets and sells its products in the United States through direct regional sales managers including Microwave Vision’s world-wide direct sales force and through independent sales representatives that target specific geographic and strategic markets. Internationally, the Company has established sales and customer service centers in Israel and Germany and has a network of distributors, agents and representatives for sales, marketing and customer support throughout Europe and Asia. 9

9 Index

~~Table~~The Company’s engineers and other technical staff support the efforts of ~~Contents~~the sales force. Since a customer’s engineers typically play an important role in the procurement decision, the Company’s engineers work closely with them to help them understand the advantages of the Company’s products and systems. Additional business from existing customers is pursued through the joint efforts of both the sales force and the engineers and other technical staff who has worked closely with the customer’s engineers and who understand the customer’s needs. If a customer has already purchased a microwave test and measurement system from ORBIT/FR, the Company believes it has an advantage over competitors in obtaining orders for system upgrades as well as any additional systems that the customer may wish to purchase at a later date. Typically, a substantial portion of the Company’s revenues in a given year is generated by customers for whom the Company has previously provided products or systems.

The Company’s ~~engineers~~generates ~~and other technical staff support the efforts of the~~ sales ~~force. Since~~leads afor ~~customer’s~~new ~~engineers~~customers ~~typically~~through ~~play~~referrals ~~an important role in the procurement decision, the Company’s engineers work closely with them to help them understand the advantages of the Company’s products and systems. Additional business~~ from existing customers ~~is pursued through the joint efforts of both the sales force~~ and ~~the engineers and~~ other ~~technical~~industry ~~staff who has worked closely with the customer’s engineers and who understand the customer’s needs. If a customer has already purchased a microwave test and measurement system from ORBIT/FR~~suppliers, ~~the~~its ~~Company~~reputation ~~believes it has an advantage over competitors~~ in ~~obtaining orders for system upgrades as well as any additional systems that~~ the ~~customer~~industry, ~~may~~its ~~wish~~on-line tocatalog ~~purchase~~(found at ~~a later date~~www.orbitfr.com ~~Typically~~), ain ~~substantial~~coordination ~~portion~~with ~~of the~~Microwave ~~Company’s~~Vision ~~revenues~~advertising in atrade ~~given~~publications, ~~year~~in isconferences ~~generated~~and bytrade ~~customers~~shows, ~~for~~and ~~whom~~on the ~~Company~~World ~~has previously~~Wide ~~provided products or systems~~Web.

~~The~~Customer Company generates sales leads for new customers through referrals from existing customers and other industry suppliers, its reputation in the industry, its on-line catalog (found at www.orbitfr.com), in coordination with Microwave Vision advertising in trade publications, in conferences and trade shows, and on the World Wide Web. Support

The Company is committed to providing customer satisfaction through the service and support of its products. Through its Customer ~~Support~~ Service Response Center, the Company handles warranty support, field service, technical support, training, service contracts, spare parts and user documentation issues. Through a trained customer service representative and direct phone support, the Company believes it is positioned to provide rapid solutions upon request. ORBIT/FR’s customer service capabilities are achieved by providing comprehensive training through offices located in the U.S., Europe and Israel.

The Company is committed to providing customer satisfaction through the service and support of its products. Through its Customer Service Response Center, the Company handles warranty support, field service, technical support, training, service contracts, spare parts and user documentation issues. Through a trained customer service representative and direct phone support, the Company believes it is positioned to provide rapid solutions upon request. ORBIT/FR’s customer service capabilities are achieved by providing comprehensive training through offices located in the U.S., Europe and Israel. Customers

~~Customers~~ The Company has performed several hundred world-wide installations for customers in the aerospace/defense, wireless communications, satellite and automotive industries. Representative customers that have purchased systems from the Company include:

The Company has performed several hundred world-wide installations for customers in the aerospace/defense, wireless communications, satellite and automotive industries. Representative customers that have purchased systems from the Company include:

Aerospace/Defense	Aerospatiale, Alenia Aeronautica, Allgon, Ball Aerospace, Boeing, Chelton, BAE Systems, Dassault, Elta, Ericsson Microwave, General Electric, Israel Aircraft Industry, ITT Avionics, JPL, L3 Communications, Lockheed Martin/Loral, Lufthansa, Mitsubishi Heavy Industries, NASA, Northrop-Grumman, Nurad, Pratt & Whitney, Racal Avionics, Raphael, Raytheon, Rockwell International, SAAB Missiles, SPAR Aerospace, Texas Instruments, and the United States Air Force, Army and Navy.

Wireless Communications	Alcatel, Andrew, AT&T, Bell Atlantic, BAE, Bosch, Celwave, Chelton, Daewoo, Ericsson, GTE, IBM, Intel, ITT, Korea Mobile Telecom, Lucent Technologies, Motorola, NEC, Nokia, Northern Telecom, NTT, Probrand, Qualcomm, RCA, Samsung, SiemensPlessey, Thales Antennas, Telebras and Tenovis.

Satellite	Astrium, DASA, EADS, Elenia Spazio, Harris, Lockheed Martin, Space Systems/Loral, Raytheon and TRW.

Automotive	Blaupunkt, Honda, BMW, Daimler-Chrysler, Ford, Fuba, Hyundai, Mitsubishi, SAAB and Toyota.

University	Georgia Tech, University of Hawaii, University of Hong Kong, University of Utah, UCLA, University of Illinois, Texas A&M University and Villanova University.

Aerospace/Defense		Aerospatiale, Alenia Aeronautica, Allgon, Ball Aerospace, Boeing, Chelton, BAE Systems, Dassault, Elta, Ericsson Microwave, General Electric, Israel Aircraft Industry, ITT Avionics, JPL, L3 Communications, Lockheed Martin/Loral, Lufthansa, Mitsubishi Heavy Industries, NASA, Northrop-Grumman, Nurad, Pratt & Whitney, Racal Avionics, Raphael, Raytheon, Rockwell International, SAAB Missiles, SPAR Aerospace, Texas Instruments, and the United States Air Force, Army and Navy.
Wireless Communications		Alcatel, Andrew, AT&T, Bell Atlantic, BAE, Bosch, Celwave, Chelton, Daewoo, Ericsson, GTE, IBM, Intel, ITT, Korea Mobile Telecom, Lucent Technologies, Motorola, NEC, Nokia, Northern Telecom, NTT, Probrand, Qualcomm, RCA, Samsung, SiemensPlessey, Thales Antennas, Telebras and Tenovis.
Satellite		Astrium, DASA, EADS, Elenia Spazio, Harris, Lockheed Martin, Space Systems/Loral, Raytheon and TRW.
Automotive		Blaupunkt, Honda, BMW, Daimler-Chrysler, Ford, Fuba, Hyundai, Mitsubishi, SAAB and Toyota.
University		Georgia Tech, University of Hawaii, University of Hong Kong, University of Utah, UCLA, University of Illinois, Texas A&M University and Villanova University.

The Company’s customers are located in the Americas (the United States, Canada, Brazil and Argentina), Europe (the United Kingdom, France, Germany, Israel, Italy, Holland, Spain, Austria, Denmark, Belgium, Poland, Russia, Finland, Norway, Sweden, Switzerland, Turkey and Portugal) and throughout the rest of the world (India, Japan, Korea, Thailand, Taiwan, Singapore, Indonesia, Australia, China, and South Africa). See Note 8 of the Notes to Consolidated Financial Statements for a discussion of the geographic concentration of the Company’s revenues.

10 Index

~~Table~~Production ofand ~~Contents~~Suppliers

~~Production~~The Company’s engineers, based in the United States, Germany and ~~Suppliers~~ Israel, are responsible for product design and development and for overseeing the production of the Company’s products. Although the Company maintains a production facility in Horsham, PA, most of the production of the Company’s products is performed by subcontractors. Through its wholly owned subsidiary, Advanced ElectroMagnetics, Inc., the Company manufactures anechoic foam absorbing material, an integral component of the microwave test and measurement system environment.

~~The~~Although the Company’s ~~engineers,~~produces ~~based~~many inof the ~~United~~component ~~States,~~parts ~~Germany and Israel, are responsible~~ for ~~product~~ ~~design~~its ~~and~~microwave ~~development~~test and ~~for~~measurement ~~overseeing the production of the Company’s products. Although the Company maintains a production facility in Horsham~~systems, ~~PA,~~it ~~most~~purchases ofcertain ~~the~~components ~~production~~from ofoutside ~~the Company’s~~vendors ~~products~~for isturnkey ~~performed~~microwave bytest ~~subcontractors.~~and ~~Through~~measurement ~~its wholly owned subsidiary~~systems, ~~Advanced ElectroMagnetics,~~including ~~Inc.,~~personal ~~the Company manufactures anechoic foam absorbing material~~computers, anshielded ~~integral component~~enclosures ofand ~~the~~ microwave ~~test and measurement system environment~~absorbers.

Although the Company produces many of the component parts for its microwave test and measurement systems, it purchases certain components from outside vendors for turnkey microwave test and measurement systems, including personal computers, shielded enclosures and microwave absorbers. Backlog

~~Backlog~~ At December 31, 2011 and 2010, the Company’s backlog was approximately $21.6 million and $21.4 million, respectively. The Company includes in backlog only those orders for which it has received and accepted a completed purchase order. Such orders are generally subject to cancellation by the customer with payment of a specified charge. The delivery lead time on the Company’s products and systems is generally three to six months, but can be as short as a few days and as long as 18 months or more. Because of the possibility of customer changes in delivery schedules, cancellation of orders and potential shipment delays, the Company’s backlog as of any particular date may not be representative of actual sales for any succeeding period.

AtResearch ~~December 31, 2010~~ and 2009, the Company’s backlog was approximately $21.4 million and $25.2 million, respectively. The Company includes in backlog only those orders for which it has received and accepted a completed purchase order. Such orders are generally subject to cancellation by the customer with payment of a specified charge. The delivery lead time on the Company’s products and systems is generally three to six months, but can be as short as a few days and as long as 18 months or more. Because of the possibility of customer changes in delivery schedules, cancellation of orders and potential shipment delays, the Company’s backlog as of any particular date may not be representative of actual sales for any succeeding period. Development

~~Research~~The Company believes that its future success depends on its ability to adapt to rapidly changing technological circumstances within the industries it serves and ~~Development~~ to continue to meet the needs of its customers. Accordingly, the timely development and introduction of new products is essential to maintain the Company’s competitive position. Using its internal research and development staff, augmented by external consultants, the Company develops most of its products in-house. On occasion, the Company’s research and development efforts have been conducted in direct response to the specific requirements of customers’ orders, and, accordingly, such amounts are included in cost of revenues when incurred and the related funding is included in net revenues at such time. Included in cost of revenues are customer-funded research and development costs of approximately $0 and $0.007 million for the years ended December 31, 2011 and 2010, respectively.

~~The~~Other ~~Company~~research ~~believes that its future success depends on its ability to adapt to rapidly changing technological circumstances within the industries it serves~~ and ~~to continue to meet the needs of its customers. Accordingly, the timely~~ development ~~and~~expenses ~~introduction~~ of ~~new products is essential to maintain~~ the Company’s ~~competitive~~for ~~position.~~fiscal ~~Using~~years ~~its~~ended ~~internal~~December ~~research and development staff~~31, ~~augmented~~2011 ~~by external consultants, the Company develops most of its products in-house. On occasion, the Company’s research~~ and ~~development~~2010 ~~efforts~~were ~~have~~approximately been conducted in direct response to the specific requirements of customers’ orders, and, accordingly, such amounts are included in cost of revenues when incurred and the related funding is included in net revenues at such time$1.2 ~~Included~~million ~~in cost of revenues are customer-funded research~~ and ~~development costs of approximately~~ $~~7,000~~1.3 ~~and~~million ~~$147,000 for the years ended December 31, 2010 and 2009,~~ respectively.

~~Other research and development expenses of the Company for fiscal years ended December 31, 2010 and 2009 were approximately $1,253,000 and $1,308,000, respectively.~~ Competition

~~Competition~~ The Company believes that its current systems and products compete effectively with the systems and products offered by its competitors on the basis of product functionality, speed and accuracy, reliability, price, ease of use and technical support. The market for automated microwave test and measurement products, systems and services, however, is highly competitive and is characterized by continuing advances in products and technologies. Some of the Company’s competitors have established relationships with current and potential customers of the Company. The Company also competes, on a limited basis, with the internal development groups of its existing and potential customers, many of whom design and develop parts of their own microwave test and measurement systems. The Company’s business, operating results and financial condition could be materially adversely affected by such competition. The Company’s primary competitors in the microwave test and measurement market are MI Technology, Nearfield Systems, Inc., EMC Test Systems, March Microwave.

~~The~~Proprietary Company believes that its current systems and products compete effectively with the systems and products offered by its competitors on the basis of product functionality, speed and accuracy, reliability, price, ease of use and technical support. The market for automated microwave test and measurement products, systems and services, however, is highly competitive and is characterized by continuing advances in products and technologies. Some of the Company’s competitors have established relationships with current and potential customers of the Company. The Company also competes, on a limited basis, with the internal development groups of its existing and potential customers, many of whom design and develop parts of their own microwave test and measurement systems. The Company’s business, operating results and financial condition could be materially adversely affected by such competition. The Company’s primary competitors in the microwave test and measurement market are MI Technology, Nearfield Systems, Inc., EMC Test Systems, March Microwave. Rights

~~Proprietary~~The ~~Rights~~ Company is heavily dependent on its proprietary technology. The Company relies on a combination of confidentiality agreements with its employees, license agreements, copyrights, trademarks and trade secret laws to establish and protect rights to its proprietary technology. The Company does not hold any material patents. All of the Company’s software is shipped with a security lock which limits software access to authorized users. Generally, the Company does not license or release its source code. Effective copyright and trade secret protection of the Company’s proprietary technology may be unavailable or limited in certain foreign countries.

The Company is heavily dependent on its proprietary technology. The Company relies on a combination of confidentiality agreements with its employees, license agreements, copyrights, trademarks and trade secret laws to establish and protect rights to its proprietary technology. The Company does not hold any material patents. All of the Company’s software is shipped with a security lock which limits software access to authorized users. Generally, the Company does not license or release its source code. Effective copyright and trade secret protection of the Company’s proprietary technology may be unavailable or limited in certain foreign countries. 11

11 Index

~~Table of Contents~~Employees

~~Employees~~ As of December 31, 2011, the Company had a total of 141 employees, 68 of which are in North America and 73 of which are in Europe. The Company considers its relations with its employees to be good.

AsITEM ~~of December 31, 2010, the Company had a total of 138 employees of which 79 are in North America and 59 are in Europe~~1A. ~~The~~RISK ~~Company considers its relations with its employees to be good.~~ FACTORS

~~ITEM~~Rapid 1ATechnological Change. ~~RISK~~The ~~FACTORS~~microwave test and measurement industry is characterized by rapid technological change. The Company’s future success will depend upon its ability to continually enhance its current products and to develop and introduce new products that keep pace with the increasingly sophisticated needs of its customers and the technological advancements of its competitors. There can be no assurance that the Company will be successful in developing and marketing product enhancements or new products that will adequately meet the requirements of the marketplace.

~~Rapid~~Dependence ~~Technological~~on ~~Change~~Proprietary Technology. The ~~microwave~~Company’s ~~test~~success ~~and~~is ~~measurement~~heavily ~~industry~~dependent isupon ~~characterized~~its ~~by rapid~~proprietary ~~technological change~~technology. The Company’s ~~future~~does ~~success~~not ~~will~~currently ~~depend~~have ~~upon~~any ~~its~~material ~~ability~~patents ~~to continually~~and ~~enhance~~relies ~~its~~principally ~~current~~on ~~products~~trade secret and copyright laws to ~~develop~~protect ~~and~~its ~~introduce~~technology. ~~new~~However, ~~products~~there can be no assurance that ~~keep~~these ~~pace~~ steps will prevent misappropriation of its technology. Moreover, third parties could independently develop technologies that compete with the ~~increasingly~~Company’s ~~sophisticated~~technologies. ~~needs~~Although ofthe Company believes that its ~~customers~~products and ~~the~~proprietary ~~technological~~rights ~~advancements~~do not infringe patents and proprietary rights of ~~its~~ ~~competitors.~~third ~~There~~parties, there can be no assurance that ~~the~~infringement ~~Company~~claims, regardless of merit, will not be ~~successful~~asserted inagainst ~~developing~~the ~~and marketing~~Company. ~~product~~In ~~enhancements~~addition, oreffective ~~new~~copyright ~~products~~and ~~that~~trade ~~will~~secret ~~adequately~~protection ~~meet~~of the ~~requirements~~Company’s ofproprietary ~~the marketplace~~technology may be unavailable or limited in certain foreign countries.

~~Dependence~~Operations onin ~~Proprietary Technology~~Israel. The Company’s ~~success~~maintains ispart ~~heavily~~of ~~dependent upon~~ its ~~proprietary~~ ~~technology.~~operations ~~The~~in ~~Company does not currently have any material patents and relies principally on trade secret and copyright laws to protect its technology~~Israel. As ~~However,~~a ~~there can be no assurance that these steps will prevent misappropriation of its technology. Moreover~~result, ~~third~~our ~~parties could~~business ~~independently~~may ~~develop~~be ~~technologies~~directly ~~that compete with the Company’s technologies. Although the Company believes that its products~~ and ~~proprietary~~adversely ~~rights~~impacted doby ~~not infringe patents and proprietary rights of third parties, there can be no assurance that infringement claims, regardless of merit, will not be asserted against~~ the ~~Company. In addition~~political, ~~effective~~economic ~~copyright~~ and ~~trade~~military ~~secret protection~~conditions ofaffecting ~~the Company’s proprietary technology may be unavailable or limited in certain foreign countries~~Israel.

~~Operations~~Risks inof ~~Israel~~Fixed-Price Contracts. ~~The~~Virtually ~~Company~~all ~~maintains~~of ~~part~~the ofCompany’s contracts for its ~~engineering~~systems ~~operation~~and inproducts ~~Israel~~are on a fixed-price basis. The ~~Company’s~~ ~~Israeli~~profitability ~~subsidiary~~of ~~has~~such ~~moved~~contracts ~~its~~is ~~operations~~subject to ainherent ~~new~~uncertainties ~~location~~as ~~and~~to ~~all~~the ~~general~~cost ~~and administrative~~of ~~services~~completion. ~~formerly~~In ~~provided~~addition byto ~~Alchut~~possible ~~are~~errors ~~now~~or ~~handled~~omissions byin ~~internal~~making ~~functions.~~initial Asestimates, cost overruns may be incurred as a result of unforeseen obstacles, ~~our~~including both physical conditions and unexpected problems in engineering, design or testing. Since the Company’s business may at certain times be ~~directly~~concentrated ~~and~~in ~~adversely~~a ~~impacted~~limited bynumber of large contracts, a significant cost overrun on any one contract could have a material adverse effect on the ~~political~~Company’s business, ~~economic~~operating results and ~~military conditions~~financial ~~affecting Israel~~condition.

Risks ofAssociated ~~Fixed-Price~~with ~~Contracts.~~Entering ~~Virtually~~New ~~all~~Markets. ofThe ~~the~~ Company’s ~~contracts~~has ~~for~~identified ~~its~~and ~~systems~~is ~~and products~~evaluating ~~are~~whether onto aenter ~~fixed-price~~into ~~basis~~certain complementary markets. The ~~profitability~~Company’s ofsuccess ~~such~~in ~~contracts~~these ismarkets ~~subject~~will todepend ~~inherent uncertainties~~on, asamong toother factors, the ~~cost~~Company’s ofability ~~completion. In addition~~ to ~~possible~~identify ~~errors~~markets orand ~~omissions~~develop intechnologies ~~making initial~~for ~~estimates,~~such ~~cost~~markets ~~overruns~~on ~~may be incurred as~~ a ~~result~~timely ~~of unforeseen obstacles~~basis, ~~including both~~hire ~~physical conditions~~ and ~~unexpected~~retain ~~problems~~skilled inmanagement, ~~engineering~~financial, ~~design~~marketing orand ~~testing.~~engineering ~~Since~~personnel, ~~the Company’s~~successfully ~~business~~manage ~~may~~growth atand ~~certain~~obtain ~~times~~capital besufficient ~~concentrated~~to infinance asuch ~~limited~~expansion. ~~number~~There ofcan ~~large~~be ~~contracts,~~no ~~a significant~~assurance ~~cost~~that ~~overrun on any one contract could have a material adverse effect on~~ the Company~~’s business,~~ ~~operating~~will ~~results~~successfully ~~and~~enter ~~financial~~these ~~condition~~markets.

~~Risks~~Management ~~Associated~~of ~~with Entering New Markets~~Growth. The Company ~~has~~believes ~~identified~~that ~~and~~growth iswill ~~evaluating whether~~be required to ~~enter~~maintain ~~into~~the ~~certain~~Company’s ~~complementary~~competitive ~~markets~~position. ~~The~~Future growth, coupled with the rapid evolution of the Company’s ~~success~~markets, inhas ~~these~~placed, ~~markets~~and ~~will depend~~is likely to continue to place, significant strains on its management, ~~among~~administrative, ~~other~~operating ~~factors~~and financial resources, ~~the~~as well as increased demands on its internal systems, procedures and controls. The Company’s ability to ~~identify~~manage ~~markets~~future growth will require the Company to continue to improve its financial and ~~develop~~management ~~technologies for~~controls, ~~such~~reporting ~~markets~~systems and procedures on a timely basis, ~~hire~~to ~~and~~implement ~~retain~~new ~~skilled~~systems ~~management,~~as ~~financial,~~necessary ~~marketing~~ and ~~engineering~~ ~~personnel~~to expand, ~~successfully~~train, ~~manage~~motivate ~~growth~~ and ~~obtain~~manage ~~capital~~its ~~sufficient~~sales, totechnical ~~finance~~personnel ~~such expansion~~and administrative personnel. There can be no assurance that the Company will be able to manage its growth successfully. ~~enter~~Failure ~~these~~to ~~markets~~do so could have a material adverse effect on the Company’s business, operating results and financial condition.

Management of Growth. The Company believes that growth will be required to maintain the Company’s competitive position. Future growth, coupled with the rapid evolution of the Company’s markets, has placed, and is likely to continue to place, significant strains on its management, administrative, operating and financial resources, as well as increased demands on its internal systems, procedures and controls. The Company’s ability to manage future growth will require the Company to continue to improve its financial and management controls, reporting systems and procedures on a timely basis, to implement new systems as necessary and to expand, train, motivate and manage its sales, technical personnel and administrative personnel. There can be no assurance that the Company will be able to manage its growth successfully. Failure to do so could have a material adverse effect on the Company’s business, operating results and financial condition. 12

12 Index

~~Table~~Risks Associated with International Sales. In 2011 and 2010, international sales (sales to customers outside of ~~Contents~~North America) comprised approximately 65% and 53%, respectively, of the Company’s total sales, and the Company expects its international business to continue to account for a material part of its revenues. International sales are subject to numerous risks, including political and economic instability in foreign markets, restrictive trade and export policies of foreign governments, inconsistent product regulation by foreign agencies or governments, imposition of product tariffs and burdens and costs of complying with a wide variety of international and U.S. export laws and regulatory requirements. Approximately 74% of the Company’s sales in 2011 were denominated in U.S. dollars. Accordingly, the Company believes that it does not have significant exposure to fluctuations in currency. However, fluctuations in currency could adversely affect the Company’s foreign customers.

~~Risks~~Potential ~~Associated~~Fluctuations ~~with~~in ~~International~~Quarterly ~~Sales~~Results. InThe ~~2010~~Company’s ~~and~~operating ~~2009,~~results ~~international~~have ~~sales~~varied ~~(sales~~from quarter to ~~customers~~ ~~outside~~quarter ofin ~~North~~the ~~America)~~past ~~comprised~~and ~~approximately~~may ~~53%~~vary ~~and~~significantly ~~48%,~~in ~~respectively,~~the offuture ~~the Company’s~~depending ~~total~~on ~~sales,~~factors ~~and~~such as the ~~Company~~size ~~expects~~and ~~its~~timing ~~international~~of ~~business~~significant tocontracts, ~~continue~~the tomix ~~account for~~of athird ~~material~~party ~~part~~products ofand ~~its~~the ~~revenues.~~Company’s ~~International~~proprietary ~~sales~~products ~~are~~included ~~subject~~in toa ~~numerous~~particular ~~risks~~contract, ~~including political~~customers’ ~~and~~budgetary ~~economic~~constraints, ~~instability~~increased ~~in foreign markets~~competition, ~~restrictive~~the ~~trade~~timing ~~and~~of ~~export~~new ~~policies~~product ~~of foreign~~announcements ~~governments,~~and ~~inconsistent~~changes ~~product~~in ~~regulation~~pricing policies by ~~foreign~~the ~~agencies~~Company or ~~governments~~its competitors, ~~imposition of~~market ~~product~~acceptance ~~tariffs~~of ~~and~~new ~~burdens~~ and ~~costs~~enhanced versions of ~~complying~~the ~~with~~Company’s aproducts, ~~wide~~changes ~~variety~~in ofoperating ~~international~~expenses and ~~U.S. export~~changes ~~laws~~in general economic factors and ~~regulatory~~export ~~requirements.~~license ~~Approximately~~delays ~~79%~~and ofdenials. ~~the~~The Company’s ~~sales~~expense inlevels ~~2010~~are ~~were denominated~~based, in ~~U.S. dollars. Accordingly~~part, ~~the~~on ~~Company~~its ~~believes~~expectations ~~that~~as itto ~~does~~future ~~not~~revenue ~~have~~levels. ~~significant exposure~~If tothe ~~fluctuations~~Company’s inrevenue ~~currency.~~levels ~~However,~~were ~~fluctuations~~to inbe ~~currency~~below ~~could~~expectations, ~~adversely affect~~ the Company’s ~~foreign~~operating ~~customers~~results would likely be materially adversely affected.

~~Potential~~Dependence ~~Fluctuations~~on inQualified ~~Quarterly~~Technical ~~Results~~Personnel. The Company’s operating results ~~have~~depend ~~varied~~in ~~from quarter~~large topart ~~quarter~~upon in the ~~past~~efforts ~~and~~of ~~may~~its ~~vary~~microwave, ~~significantly~~software inand ~~the~~systems ~~future~~engineers. ~~depending~~The onsuccess ~~factors~~of ~~such as~~ the ~~size~~Company’s ~~and~~business ~~timing~~therefore ofdepends ~~significant~~on ~~contracts,~~its ~~the~~ability ~~mix~~to ofattract ~~third~~and ~~party~~retain ~~products~~engineers and ~~the~~other ~~Company’s proprietary~~technical ~~products~~personnel. ~~included~~There inare a ~~particular~~limited ~~contract,~~number ~~customers’~~of ~~budgetary~~microwave ~~constraints~~engineers, ~~increased competition,~~and ~~the~~such ~~timing~~individuals ofare ~~new~~sought ~~product~~both ~~announcements~~by ~~and~~microwave ~~changes~~test inand ~~pricing~~measurement ~~policies~~companies bysuch as the Company or ~~its competitors, market acceptance of new~~ and ~~enhanced~~by ~~versions~~manufacturers of ~~the~~wireless ~~Company’s~~ products~~, changes~~ ~~in operating expenses~~ and ~~changes~~telecommunications inservice ~~general~~providers. ~~economic~~Competition ~~factors~~for ~~and~~such ~~export~~personnel ~~license~~is ~~delays and denials~~intense. The Company’s ~~expense~~has ~~levels~~at ~~are~~times ~~based,~~experienced difficulty in ~~part,~~recruiting onand ~~its~~retaining ~~expectations~~technical aspersonnel, toand ~~future~~there ~~revenue levels.~~can Ifbe ~~the~~no ~~Company’s~~assurance ~~revenue~~that ~~levels~~the ~~were~~Company towill benot ~~below~~experience ~~expectations,~~difficulties in the ~~Company’s~~future ~~operating results~~in ~~would~~attracting ~~likely~~and bein ~~materially~~retaining ~~adversely~~technical ~~affected~~personnel.

Dependence on ~~Qualified~~Key ~~Technical~~ Personnel. The ~~Company’s~~success ~~operating~~of ~~results depend in large part upon~~ the ~~efforts~~Company ofdepends ~~its~~to ~~microwave,~~a ~~software~~significant ~~and~~degree ~~systems~~upon ~~engineers.~~the ~~The~~contribution ~~success~~ of ~~the Company’s business therefore depends on~~ its ~~ability~~executive toofficers ~~attract~~ and ~~retain engineers and~~ other ~~technical~~ key personnel. There ~~are~~can abe ~~limited~~no ~~number~~assurance ofthat ~~microwave engineers, and such individuals are sought both by microwave test and measurement companies such as~~ the Company ~~and~~will bybe ~~manufacturers~~able ~~of wireless~~to ~~products~~retain ~~and~~its ~~telecommunications~~managerial ~~service~~and ~~providers.~~other ~~Competition~~key ~~for such~~ personnel ~~is intense.~~or ~~The~~to ~~Company~~attract ~~has~~additional atmanagerial ~~times experienced difficulty in recruiting~~ and ~~retaining~~other ~~technical~~ key personnel, ~~and~~if ~~there can be no assurance that the Company will not experience difficulties in the future in attracting and in retaining technical personnel~~required.

~~Dependence~~Product onLiability; ~~Key~~Risk ~~Personnel~~of Product Defects. The ~~success~~sale of products and systems by the Company ~~depends~~may toentail the risk of product liability and related claims. A product liability claim brought against the Company could have a ~~significant~~material ~~degree~~adverse effect upon the ~~contribution~~Company’s ofbusiness, ~~its~~operating ~~executive~~results ~~officers~~and financial condition. Complex software and ~~other~~system ~~key~~products, ~~personnel~~such as those offered by the Company, may contain defects or failures when introduced or when new versions are released. There can be no assurance that , despite testing by the Company, errors will not be ~~able~~found toin ~~retain~~new ~~its~~products ~~managerial~~after ~~and~~commencement ~~other~~of ~~key~~commercial ~~personnel~~shipments, resulting in loss of market share or failure to ~~attract~~achieve ~~additional managerial~~market acceptance. The Company maintains product liability insurance in the amount of $2.0 million and ~~other~~errors ~~key~~and ~~personnel~~omissions insurance in the amount of $7.0 million, although there can be no assurance that such coverage will be applicable to a particular claim or that the amounts of such insurance will be adequate if ~~required~~the Company experiences a significant claim. Although the Company has not experienced any significant claims to date related to its systems or products, the occurrence of such a claim could have a material adverse effect upon the Company’s business, operating results and financial condition.

~~Product~~Competition ~~Liability; Risk of Product Defects~~. The ~~sale~~market offor ~~products~~automated ~~and~~microwave ~~systems~~test ~~by the Company may entail the risk of product liability~~ and ~~related~~measurement ~~claims. A product liability claim brought against the Company could have a material adverse effect upon the Company’s business~~products, ~~operating results~~systems and ~~financial~~services ~~condition.~~is ~~Complex~~highly ~~software~~competitive and ~~system~~is ~~products,~~characterized ~~such as those offered~~ by ~~the Company,~~continuing ~~may~~advances ~~contain defects or failures when introduced or when new versions are released. There can be no assurance that, despite testing by the Company, errors will not be found~~ in ~~new~~ products ~~after~~ ~~commencement of commercial shipments, resulting in loss of market share or failure to achieve market acceptance. The Company maintains product liability insurance in the amount of $2.0 million~~ and ~~errors and omissions insurance in the amount of $7~~technologies.0 million, although there can be no assurance that such coverage will be applicable to a particular claim or that the amounts of such insurance will be adequate if the Company experiences a significant claim. Although the Company has not experienced any significant claims to date related to its systems or products, the occurrence of such a claim could have a material adverse effect upon the Company’s business, operating results and financial condition.

~~Competition.~~In ~~The~~general, competition in this market ~~for~~comes ~~automated~~from major microwave test and measurement ~~products~~vendors, ~~systems~~some of which have a longer operating history, significantly greater financial, technical and ~~services~~ ismarketing ~~highly~~resources, ~~competitive~~greater name recognition and isa ~~characterized~~larger byinstalled ~~continuing~~customer ~~advances~~base inthan ~~products~~the Company. These companies also have established relationships with current and ~~technologies~~ potential customers of the Company. The Company also competes, on a limited basis, with the internal development groups of its existing and potential customers, who may design and develop parts of their own microwave test and measurement systems. The Company’s business, operating results and financial condition could be materially adversely affected by such competition.

InFluctuations ~~general,~~in ~~competition~~Capital inSpending. ~~this~~The ~~market~~Company ~~comes~~is ~~from~~dependent ~~major~~upon ~~microwave~~the ~~test~~wireless communications, satellite, automotive and ~~measurement~~aerospace/defense ~~vendors, some~~industries. ofBecause ~~which~~these ~~have~~industries aare ~~longer~~characterized ~~operating~~by ~~history~~technological change, ~~significantly~~pricing ~~greater~~and ~~financial,~~gross ~~technical~~margin pressure and ~~marketing~~, ~~resources~~particularly in the aerospace/defense industry, ~~greater~~government ~~name~~budget ~~recognition~~constraints, ~~and~~they ahave ~~larger~~from ~~installed~~time ~~customer~~to ~~base~~time ~~than~~experienced ~~the Company~~sudden economic downturns. ~~These~~During ~~companies~~these ~~also~~periods, ~~have~~capital ~~established~~spending ~~relationships~~is ~~with~~frequently ~~current~~curtailed and ~~potential customers of~~ the ~~Company.~~number ~~The~~of ~~Company~~design ~~also~~projects ~~competes,~~often ondecreases. aSince ~~limited~~the ~~basis,~~Company’s ~~with~~revenues ~~the~~are ~~internal~~dependent ~~development~~upon ~~groups of~~capital ~~its~~spending ~~existing~~trends and ~~potential~~new ~~customers~~design projects, ~~who~~negative ~~may~~factors ~~design~~affecting ~~and~~these ~~develop~~industries ~~parts~~could ofhave ~~their~~a ~~own~~material ~~microwave test~~adverse ~~and~~effect ~~measurement~~on ~~systems.~~the ~~The~~ Company’s business, operating results and financial condition ~~could be materially adversely affected by such competition~~.

Fluctuations in Capital Spending. The Company is dependent upon the wireless communications, satellite, automotive and aerospace/defense industries. Because these industries are characterized by technological change, pricing and gross margin pressure and, particularly in the aerospace/defense industry, government budget constraints, they have from time to time experienced sudden economic downturns. During these periods, capital spending is frequently curtailed and the number of design projects often decreases. Since the Company’s revenues are dependent upon capital spending trends and new design projects, negative factors affecting these industries could have a material adverse effect on the Company’s business, operating results and financial condition. 13

13 Index

~~Table~~No ofDividends. ~~Contents~~The Company has never paid cash dividends on its Common Stock and does not anticipate that any cash dividends will be declared or paid in the foreseeable future.

NoIssuance ~~Dividends~~of Preferred Stock and Common Stock; Anti-Takeover Provisions. ~~The~~Pursuant to its Amended and Restated Certificate of Incorporation, the Company has ~~never~~an ~~paid~~authorized ~~cash~~class ~~dividends~~of on2,000,000 ~~its~~shares ~~Common~~of Preferred Stock which may be issued by the Board of Directors with such terms and ~~does~~such ~~not anticipate~~rights, ~~that~~preferences and designations as the Board may determine and without any ~~cash~~vote ~~dividends~~of ~~will~~the bestockholders, ~~declared~~unless otherwise required by law. Issuance of such Preferred Stock, depending upon the rights, preferences and designations thereof, may have the effect of delaying, deterring or ~~paid~~preventing a change in control of the ~~foreseeable~~Company. ~~future~~Issuance of additional shares of Common Stock could result in dilution of the voting power of the Common Stock. In addition, certain “anti-takeover” provisions of the Delaware General Corporation Law among other things, may restrict the ability of the stockholders to approve a merger or business combination or obtain control of the Company.

~~Issuance~~Market offor ~~Preferred~~Common Stock. ~~and~~The Company’s Common Stock; ~~Anti-Takeover~~is ~~Provisions.~~traded ~~Pursuant~~on the OTCBB, which limits exposure to ~~its Amended~~market analysts and, ~~Restated~~in ~~Certificate~~turn, may limit volume of ~~Incorporation,~~trading. ~~the~~Investors ~~Company~~may ~~has~~find anit ~~authorized~~more ~~class~~difficult ofto ~~2,000,000 shares~~dispose of, ~~Preferred~~or ~~Stock~~to ~~which~~obtain ~~may~~accurate bequotations ~~issued~~as byto the ~~Board~~market value of, ~~Directors~~the ~~with~~Company’s ~~such~~common ~~terms~~stock ~~and~~than ~~such rights,~~would ~~preferences~~otherwise ~~and~~be ~~designations~~the ascase were the ~~Board~~Company’s ~~may~~Common ~~determine~~Stock ~~and~~listed ~~without~~on ~~any~~a ~~vote~~more ofrecognized ~~the stockholders,~~stock ~~unless~~exchange ~~otherwise~~or ~~required~~quotation ~~by law~~service. ~~Issuance~~In ofaddition, ~~such~~trading ~~Preferred~~in the Company’s Common Stock, ~~depending~~is ~~upon~~ currently subject to certain rules under the ~~rights~~Exchange Act, ~~preferences~~which ~~and~~require ~~designations~~additional ~~thereof,~~disclosure ~~may~~by ~~have~~broker-dealers ~~the~~in ~~effect~~connection ofwith ~~delaying,~~any ~~deterring~~trades ~~or preventing~~involving a ~~change~~stock indefined ~~control~~as ofa ~~the~~“penny ~~Company~~stock.” ~~Issuance~~Penny ofstocks ~~additional~~are ~~shares~~generally ofnon-Nasdaq ~~Common~~equity ~~Stock~~securities ~~could result~~with ina ~~dilution~~market ofprice ~~the~~less ~~voting~~than ~~power~~$5.00 ofper ~~the~~share. ~~Common~~The ~~Stock.~~penny Instock ~~addition~~rules require broker-dealers selling penny stocks to make certain disclosures about such stocks to purchasers thereof, and impose sales practice restrictions on broker-dealers in certain ~~“anti~~penny stock transactions. The additional burdens imposed upon broker-~~takeover” provisions~~dealers ofby ~~the~~these ~~Delaware~~rules ~~General~~may ~~Corporation~~discourage ~~Law~~them ~~among~~from ~~other~~effecting ~~things~~transactions in the Company’s Common Stock, ~~may~~which ~~restrict~~could limit the ~~ability~~liquidity of the ~~stockholders~~common tostock ~~approve~~and athe ~~merger~~ability orof ~~business~~the ~~combination~~Company’s orstockholders ~~obtain~~to ~~control~~sell oftheir stock in the ~~Company~~secondary market.

~~Market~~ITEM ~~for Common Stock~~1B. UNRESOLVED ~~The~~STAFF Company’s Common Stock is traded on the OTCBB, which limits exposure to market analysts and, in turn, may limit volume of trading. Investors may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, the Company’s common stock than would otherwise be the case were the Company’s Common Stock listed on a more recognized stock exchange or quotation service. In addition, trading in the Company’s Common Stock is currently subject to certain rules under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a “penny stock.” Penny stocks are generally non-Nasdaq equity securities with a market price less than $5.00 per share. The penny stock rules require broker-dealers selling penny stocks to make certain disclosures about such stocks to purchasers thereof, and impose sales practice restrictions on broker-dealers in certain penny stock transactions. The additional burdens imposed upon broker-dealers by these rules may discourage them from effecting transactions in the Company’s Common Stock, which could limit the liquidity of the common stock and the ability of the Company’s stockholders to sell their stock in the secondary market. COMMENTS

~~ITEM 1B~~None. ~~UNRESOLVED STAFF COMMENTS~~

~~None~~ITEM 2. PROPERTIES

~~ITEM~~The 2Company occupies approximately 18,000 square feet of space at its headquarters in Horsham, Pennsylvania under a lease expiring in October 2015. ~~PROPERTIES~~The current annual base rent is approximately $164,000. The Company also maintains sales, engineering, technical support and program management facilities in Israel and Germany, and at its manufacturing facilities in Santee, California. The Company’s current aggregate annual rental expenses for these additional facilities are approximately $460,000.

~~The~~ITEM ~~Company occupies approximately 18,000 square feet of space at its headquarters in Horsham, Pennsylvania under a lease expiring in October 2015~~3. LEGAL The current annual base rent is approximately $157,000. The Company also maintains sales, engineering, technical support and program management facilities in Israel and Germany, and at its manufacturing facilities in Santee, California. The Company’s current aggregate annual rental expenses for these additional facilities are approximately $365,000. PROCEEDINGS

~~ITEM 3~~None. ~~LEGAL PROCEEDINGS~~

~~None~~ITEM 4. MINE SAFETY DISCLOSURES

~~ITEM~~Not ~~4. (Removed and Reserved)~~applicable

~~Table of Contents~~Index

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY ~~SECURITES~~SECURITIES

On April 11, 2003, the Company’s Common Stock was delisted from the Nasdaq Stock Market and began trading on the electronic over-the-counter quotation system of the Financial Industry Regulatory Authority (“FINRA”), the Over-the-Counter Bulletin Board (the “OTCBB”) under the symbol “ORFR.” The OTCBB is a regulated quotation service for subscribing members of FINRA that displays the real-time quotes, last-sale prices and volume information in over-the-counter securities. The OTCBB’s market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

The following table sets forth the high and low bid prices per share for the Common Stock for the periods indicated below as reported to the OTCBB by the FINRA’s member firms.

	Year ended December 31,
	2010				2009
	2011				2010
	High		Low		High		Low
First Quarter	$	23.50	$	12.0565	$	12.0150	$	01.5105
Second Quarter	$	32.5090	$	1.9330	$	13.50	$	01.3893
Third Quarter	$	32.1020	$	10.8097	$	13.2410	$	01.5780
Fourth Quarter	$	31.7020	$	20.6656	$	13.1970	$	02.6166

On March 5, ~~2011~~2012, there were 31 holders of record of the Company’s Common Stock based on information received by the Company from its stock transfer agent.

The Company has never paid any cash dividends on its Common Stock and does not intend to pay cash dividends on its Common Stock in the foreseeable future. The Company currently intends to reinvest its earnings, if any, in the development and expansion of the Company’s business. Any future declaration of cash dividends will be at the discretion of the Company’s Board of Directors and will depend upon the earnings, capital requirements and financial position of the Company, general economic conditions and other pertinent factors.

~~EQUITY COMPENSATION PLAN INFORMATION~~ 15

The following table sets forth information, as of the end of the fiscal year ended December 31, 2010, with respect to compensation plans under which the Company is authorized to issue shares of Common Stock. Index

Number of Shares

Remaining

Available for Future

Issuance

Number of Shares to

under Equity

be Issued Upon

Compensation

Exercise of

Weighted-Average

Plans (excluding

Outstanding

Exercise Price of

securities

Options,

Outstanding Options,

reflected in 1st

Plan Category

Warrants and Rights

column)

Equity compensation plan(s) approved by security holders (1)

279,250

2.41

920,750

Equity compensation plan(s) not approved by security holders

—

Total

279,250

2.41

920,750

ITEM 6. SELECTED FINANCIAL DATA

(1) This plan consists of the Orbit/FR, Inc. 1997 Stock Option Plan.

Consolidated Statement of Operations Data:	Year Ended December 31,
(amounts in thousands, except per share data)	2011			2010			2009			2008			2007
Contract revenues	$	33,603		$	36,245		$	31,246		$	23,118		$	29,292
Cost of revenues		25,424			25,514			20,483			17,103			20,044
Gross profit		8,179			10,731			10,763			6,015			9,248
General and administrative		3,158			3,113			3,005			2,768			3,119
Sales and marketing		2,638			2,920			3,565			3,655			3,569
Sales, marketing, general and administrative-MVG		1,208			1,681			1,539			—			—
Research and development		1,242			1,253			1,308			2,080			1,607
(Gain) loss on disposal of assets		—			(109	)		167			—			—
Insurance Proceeds		(132	)		—			—			—			—
Total operating expenses		8,114			8,858			9,584			8,503			8,295
Operating income (loss), net		65			1,873			1,179			(2,488	)		953
Impairment of goodwill		—			—			—		__				(80	)
Compensation charge coincident to change in control		—			—			—			(969	)		—
Other (loss), net		(122	)		(73	)		(217	)		(5	)		223
(Loss) income before income tax expense (benefit)		(57	)		1,800			962			(3,462	)		1,096
Income tax expense (benefit)		495			(497	)		(508	)		12			4
Net (loss) income	$	(552	)	$	2,297		$	1,470		$	(3,474	)	$	1,092
Other comprehensive (loss) foreign currency translation adjustment net of $26 and $32, tax benefit	$	(76	)	$	(57	)	$	—		$	—		$	—
Total comprehensive (loss) income	$	(628	)	$	2,240		$	1,470		$	(3,474	)	$	1,092
Basic and diluted (loss) income per share	$	(0.09	)	$	0.38		$	0.24		$	(0.58	)	$	0.18

Consolidated Balance Sheet Data:	December 31,
(amounts in thousands)	2011		2010		2009		2008		2007
Working capital	$	5,833	$	7,249	$	4,973	$	4,760	$	6,444
Total assets	$	24,250	$	21,932	$	20,113	$	16,552	$	17,370
Stockholders’ equity	$	9,935	$	10,534	$	8,254	$	6,707	$	9,073

~~Table~~ITEM of7. ~~Contents~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM~~Critical 6.Accounting ~~SELECTED FINANCIAL DATA~~Policies

Consolidated Statement of Operations Data:	Year Ended December 31,
(amounts in thousands, except per share data)	2010			2009			2008			2007			2006
Contract revenues	$	36,245		$	31,246		$	23,118		$	29,292		$	29,441
Cost of revenues		25,514			20,483			17,103			20,044			20,750
Gross profit		10,731			10,763			6,015			9,248			8,691
General and administrative		3,113			3,005			2,768			3,119			2,996
Sales and marketing		2,920			3,565			3,655			3,569			3,248
Sales, marketing, general and administrative-MVG		1,681			1,539
Research and development		1,253			1,308			2,080			1,607			1,443
(Gain) loss on disposal of assets		(109	)		167			—			—			—
Total operating expenses		8,858			9,584			8,503			8,295			7,687
Operating income (loss), net		1,873			1,179			(2,488	)		953			1,004
Impairment of cost in excess of net assets acquired		—			—			—			(80	)		—
Compensation charge coincident to change in control		—			—			(969	)		—			—
Other income (loss), net		(73	)		(217	)		(5	)		223			96
Income (loss) before income tax (benefit) expense		1,800			962			(3,462	)		1,096			1,100
Income tax (benefit) expense		(497	)		(508	)		12			4			(61	)
Net income (loss)	$	2,297		$	1,470		$	(3,474	)	$	1,092		$	1,161
Other comprehensive (loss)- foreign currency translation adjustment net of $32, tax benefit	$	(57	)	$	—		$	—		$	—		$	—
Total comprehensive (loss)	$	2,240		$	1,470		$	(3,474	)	$	1,092		$	1,161
Basic and diluted income (loss) per share	$	0.38		$	0.24		$	(0.58	)	$	0.18		$	0.19

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and judgments, including those related to bad debts, intangible assets, income taxes, financing operations, warranty obligations, contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Consolidated Balance Sheet Data:	December 31,
(amounts in thousands)	2010		2009		2008		2007		2006
Working capital	$	7,249	$	4,973	$	4,760	$	6,444	$	5,866
Total assets	$	21,932	$	20,113	$	16,552	$	17,370	$	17,527
Stockholders’ equity	$	10,534	$	8,254	$	6,707	$	9,073	$	7,879

The following accounting policies are the most critical and could impact our results of operations.

~~ITEM~~Revenue 7Recognition. ~~MANAGEMENT’S~~The ~~DISCUSSION~~Company ~~AND~~recognizes ~~ANALYSIS~~revenue OFand ~~FINANCIAL~~profit ~~CONDITION~~as ~~AND~~work ~~RESULTS~~progresses OFon ~~OPERATIONS~~long-term, fixed price contracts using the percentage-of-completion method, which measures the percentage of costs incurred to date to the estimated total costs for each contract when such costs can be reasonably estimated. The Company follows this method since reasonably dependable estimates of the costs applicable to various stages of a contract can be made. Recognized revenues and profit are subject to revisions as work under a contract progresses to completion. Revisions in profit estimates are charged to income in the period in which the facts that give rise to the revision become known.

~~Critical~~Bad ~~Accounting~~Debts. ~~Policies~~ The Company maintains an allowance for estimated losses resulting from the non-payment of accounts receivable. If the estimate is not sufficient to cover actual losses, the Company is required to take additional charges to its earnings.

~~Management’s~~Deferred ~~Discussion~~Income ~~and~~Taxes. ~~Analysis~~At ofDecember ~~Financial~~31, ~~Condition~~2011, ~~and Results of Operations discusses~~ the Company’s ~~consolidated~~has ~~financial~~recorded ~~statements,~~a ~~which~~deferred ~~have~~tax ~~been~~asset ~~prepared~~valuation inallowance ~~accordance with~~due ~~accounting~~to ~~principles~~uncertainty ~~generally~~with ~~accepted~~regard into the ~~United~~Company’s ~~States.~~ability ~~The preparation of these financial statements requires management~~ to ~~make~~generate ~~estimates~~sufficient ~~that~~taxable ~~affect~~income ~~the amounts reported~~ in the ~~financial~~ ~~statements~~near ~~and~~future ~~accompanying~~to ~~notes.~~realize Ona anportion ~~on-going~~of ~~basis, management evaluates~~ its ~~estimates~~ ~~and~~net ~~judgments,~~deferred ~~including~~tax ~~those~~assets ~~related~~in tothe ~~bad~~U.S. ~~debts,~~As ~~intangible~~a ~~assets,~~result ~~income~~of ~~taxes, financing~~the ~~operations,~~current ~~warranty~~year ~~obligations, contingencies and litigation~~U.S. ~~Management~~tax ~~bases~~loss, ~~its estimates~~the ~~and~~valuation ~~judgments~~allowance onat ~~historical~~December ~~experience~~31, ~~and~~2011 onwas ~~various~~increased ~~other~~to ~~factors~~62% ~~that~~of ~~are~~the ~~believed~~net ~~to be~~deferred ~~reasonable~~tax ~~under~~assets. However, ~~the~~during ~~circumstances~~2010, the ~~results~~Company ofreduced ~~which~~its ~~form~~deferred ~~the~~tax ~~basis~~valuation ~~for~~allowance ~~making~~as ~~judgments about~~a ~~the~~result ~~carrying values~~ of ~~assets~~the ~~and~~positive ~~liabilities~~financial ~~that~~results ~~are~~of ~~not~~2010 ~~readily~~and ~~apparent~~2009 ~~from~~and ~~other sources.~~based ~~Actual~~upon ~~results~~the ~~may~~Company’s ~~differ~~then ~~from~~projected ~~these~~ability ~~estimates~~to ~~under~~generate ~~different~~taxable ~~assumptions~~income orin ~~conditions~~the future.

~~The following accounting policies are the most critical and could impact our results of operations.~~ 16

Revenue Recognition. The Company recognizes revenue and profit as work progresses on long-term, fixed price contracts using the percentage-of-completion method, which measures the percentage of costs incurred to date to the estimated total costs for each contract when such costs can be reasonably estimated. The Company follows this method since reasonably dependable estimates of the costs applicable to various stages of a contract can be made. Recognized revenues and profit are subject to revisions as the contract progresses to completion. Revisions in profit estimates are charged to income in the period in which the facts that give rise to the revision become known. Index

~~Bad~~Results ~~Debts. The Company maintains an allowance for estimated losses resulting from the non-payment~~ of ~~accounts receivable. If the estimate is not sufficient to cover actual losses, the Company is required to take additional charges to its earnings.~~ Operations

16 Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

~~Table~~Revenues. Revenues for the year ended December 31, 2011 were approximately $33.6 million, a 7.2% decline from revenues of ~~Contents~~approximately $36.2 million for the year ended December 31, 2010. Geographically, as a percentage of 2010 revenues, a 7.7% increase in the European and Asia markets of $1.9 million and 0.9 million, respectively, has enabled the Company to partially off-set the 14.8% revenue reduction or approximately $5.4 million in the North American market. The increases in revenues in the European and Asian markets reflect increased business and business opportunities aided by the Microwave Vision sales and support network in those markets. The US defense market, which has shown weakness in the first three quarters of 2011, had an increase in revenues in the fourth quarter. To date in 2012, the Company has seen an increase in business opportunities in the U.S. defense market as compared to the same period in 2011.

~~Deferred~~Cost ~~Income~~of ~~Taxes~~revenues. ~~The~~Cost ~~Company~~of ~~has~~revenues ~~recorded~~for athe ~~deferred~~year ~~tax~~ended ~~asset~~December ~~valuation~~31, ~~allowance~~2011 ~~due to~~were ~~uncertainty~~approximately ~~with~~$25.4 ~~regard~~million compared to approximately $25.5 million for the ~~Company’s~~year ~~ability~~ended toDecember ~~generate~~31, ~~sufficient~~2010. ~~taxable~~Included ~~income~~in the cost of revenues for the year ended December 31, 2011 were unexpected costs on two large domestic contracts of approximately $1.3 million. This increase in costs was primarily responsible for the ~~future~~ reduction of gross margin to ~~realize~~24.4% aas ~~portion~~of December 31, 2011 from 29.6% as of ~~its~~December ~~net~~31, ~~deferred~~2010. One ~~tax~~of ~~assets~~the contracts was completed as of December 31, 2011 and the final payment was received in the first quarter of 2012. ~~Due~~The toother large domestic contract was completed by March 31, 2012. The Company believes that all costs have been recognized as of December 31, 2011. In addition, the Company’s ~~net~~anticipates ~~income~~filing ina ~~2010 and~~claim ~~2009~~for damages against a vendor on this contract whose late delivery resulted in the Company ~~has~~incurring ~~reduced~~additional ~~its~~costs ~~deferred~~on ~~tax~~this ~~asset~~contract. ~~valuation~~Gross ~~allowance~~margin percentage for the year ended December 31, 2011 was also negatively affected by the overall reduction in revenues.

OnGeneral ~~May 13,~~and ~~2008,~~administrative ~~Orbit~~expense-~~Alchut Technologies, Ltd~~others., ~~(“Alchut”)~~General ~~sold~~and ~~all~~administrative ofexpenses ~~its~~for ~~3.7 million shares of common stock of~~ the ~~Company~~year toended ~~Satimo.~~December ~~On June 30~~31, ~~2009,~~2011 ~~Microwave~~were ~~Vision~~approximately ~~SA,~~$3.2 ~~(“Microwave Vision”)~~million, ~~acquired~~compared ~~the~~to approximately $3.7 1 million ~~common~~for ~~shares of~~ the ~~Company~~year ~~through~~ended aDecember ~~reorganization involving its wholly owned subsidiary~~31, ~~Satimo~~2010. As ~~part~~a percentage of ~~that transaction~~revenues, ~~Alchut~~general ~~agreed~~and toadministrative ~~continue~~expenses ~~to provide~~for ~~administrative~~the ~~services~~year ~~pursuant~~ended toDecember a31, ~~service~~2011 ~~agreement~~increased ~~with~~to ~~our~~9.4% ~~Israeli~~from ~~subsidiary~~8.6% ~~in Israel~~ for ~~one~~the year ~~after~~ended ~~the~~December ~~closing~~31, ~~of the transaction. As of May 2009~~2010, ~~our~~primarily ~~Israeli~~reflecting ~~subsidiary had~~reduced ~~moved~~sales ~~its operations to a new location and maintains an internal administrative services function~~volume.

OnSales ~~August 14, 2009, the Company entered into an Assistance~~ and ~~Provision~~marketing ~~of Services Agreement (the “Services Agreement”) with Microwave Vision and several subsidiaries of Microwave Vision, including Satimo~~expenses. ~~Pursuant~~Sales ~~to the Services Agreement, Microwave Vision agreed to provide management, operational, sales~~ and marketing, ~~legal,~~expenses ~~technical~~for ~~and other services to~~ the Company, Satimo, and Microwave Vision’s other direct and indirect subsidiaries (collectively, the “Subsidiaries”). In consideration thereof, the Company, Satimo and each of the other Subsidiaries agreed to pay Microwave Vision a fee to be determined as of the start of each calendar year~~, commencing~~ onended ~~January 1,~~December ~~2009~~31, ~~based~~2011 onwere ~~the~~approximately ~~projected gross margins of each Subsidiary for that year~~$2.6 Inmillion ~~addition,~~compared ~~the Company agreed~~ to pay Microwave Vision an additional fee of 1% of its gross sales in consideration of the right to use the name “Microwave Vision” in the Company’s sales and marketing activities. As a result of the application of the Services Agreement effective as of January 1, 2009, the Company has recorded approximately $12.5 9 million ~~in additional expenses~~ for the year ended December 31, ~~2009 over the expenses reported in 2008. As provided by the agreement~~2010, ~~at the end of the year an adjustment is calculated based upon the realized gross margins and the expenses incurred by the Subsidiaries. As~~ a ~~result~~decrease of ~~the implementation of the Services Agreement effective as of January 1, 2009, the Company recorded~~ approximately $10.~~7 million~~3 ~~and $1.5~~ million ~~respectively in expenses related to the Sales Agreement for the years ended December 31, 2010 and 2009~~. ~~Due~~This todecrease ~~the~~reflects ~~gross~~reduced ~~margin~~sales ~~results~~rep ~~of the Company relative to the other Subsidiaries~~fees, ~~the~~reduced ~~amount of~~labor ~~expense~~costs ~~charged for the quarters ended December 31, 2010~~ and ~~2009~~reduced ~~were approximately $657,000 and $588,000, respectively, or $315,000 and $271,000 greater than the quarterly charges accrued by the Company based upon budget~~travel.

~~On November 3~~Sales, ~~2010~~marketing, ~~the~~general ~~Company’s~~and ~~AEMI~~administrative ~~subsidiary~~expenses-Microwave inVision ~~California had an oven fire that resulted in the oven being destroyed~~Group. ~~In December 2010, a portion of the oven was operational on a limited basis.~~ The Company ~~had~~has ~~sufficient~~recorded ~~inventory~~approximately to$1.2 ~~fulfill~~million ~~its orders~~ in ~~the~~sales, ~~quarter ended December 31~~marketing, ~~2010.~~general ~~A new oven has been ordered~~ and weadministrative ~~anticipate~~expenses ~~that~~for ~~it will be operational by~~ the ~~end~~year ofended ~~the~~December ~~quarter ending March~~ 31, ~~2010.~~2011 ~~Insurance~~under ~~proceeds~~the ofService ~~$134,450~~Agreement ~~were~~with ~~sufficient~~MVG. ~~to reimburse~~The ~~the~~ Company ~~for~~recorded ~~the new oven and resulted in a gain on the disposal of assets of~~ approximately $~~109,000~~1.7 ~~Insurance~~million ~~recoveries~~in ~~for~~sales, ~~other costs and business interruption coverage are still pending at December 31~~marketing, ~~2010~~general and ~~will~~administrative beexpenses ~~reported~~for ~~as revenue upon settlement with~~ the ~~insurance~~ ~~carrier.~~year ~~We anticipate that the amount will be determined no later than the quarter~~ ended ~~June 30,~~ ~~2011. No provision for this reimbursement has been reflected in the~~ December 31, 2010 ~~financial statements~~. ~~The Company anticipates that AEMI’s sales for the quarter ended March 31, 2011 will be negatively impacted by the fire.~~

17 Research and development expenses. Research and development expenses for the years ended December 31, 2011 were approximately $1.2 million compared to approximately $1.3 million for the year ended December 31, 2010. In 2011 the Company initiated significant new research and development programs which resulted in a U.S. R&D tax credit of $0.027M, a reduction to future U.S. tax liabilities.

~~Table~~Gain on Disposal of ~~Contents~~Assets. A fire on November 3, 2010 at the Company’s wholly owned subsidiary, AEMI, destroyed the oven used to dry the anechoic foam produced there. Through December 31, 2010, the Company received insurance proceeds of $0.13 million representing the replacement cost of certain machinery with a depreciated book basis of $0.03 million resulting in a gain of $0.1 million.

~~Results~~Other Insurance Proceeds. In the quarter ended June 30, 2011, the Company’s AEMI subsidiary had increased cost of ~~Operations~~ revenues in 2010 due to the impact of the oven fire in the fourth quarter of 2010. The Company received approximately $0.13 million as full reimbursement from its insurance company for these costs.

~~Year~~Other ~~Ended~~(loss),net. Other (loss), net, for the year ended December 31, ~~2010~~2011 ~~Compared~~was approximately $0.2 million, as compared to ~~Year~~$0.1 ~~Ended~~for the year ended December 31, ~~2009~~ 2010, an increase of approximately $0.1million. This increase is primarily due to increased foreign exchange losses due to the strength of the Euro during part of the year and increased bank guarantee fees.

Revenues. Revenues for the year ended December 31, 2010 were approximately $36.2 million as compared to approximately $31.2 million for the year ended December 31, 2009 an increase of approximately $5.0 million. The increase was due to increased revenues from all the Company’s markets except the EMC market. Revenues from the wireless, defense, satellite, university and the automotive markets increased approximately $1.7 million, $1.6 million, $0.9 million, $0.6 million and $0.2 million, respectively. The revenues from the EMC market were unchanged. Geographically, revenues from Europe, North America and Asia increased approximately $3.7 million, $0.9 million and $0.4 million, respectively. The increases in revenues reflect work performed on the increased contract backlog of $25.2 million at the beginning of the year 2010 versus a backlog of $18.4 at the beginning of the year 2009. 17

Cost of revenues. Cost of revenues for the year ended December 31, 2010 were approximately $25.5 million compared to approximately $20.5 million for the year ended December 31, 2009, an increase of approximately $5.0 million reflecting increased business. Gross margin percentage for the year ended December 31, 2010 decreased to 29.6% from 34.4% for the year ended December 31, 2009. This decrease was primarily due to a large contract which incurred non-recurrent additional costs which resulted in a reduction of the gross margin of 4.2%. Index

~~General~~Income ~~and administrative expense-others~~taxes. ~~General~~For ~~and administrative expenses for~~ the year ended December 31, ~~2010~~2011 ~~were~~the Company recorded income tax expense of approximately $30.1 5 million, ~~compared~~resulting from income taxes applicable to ~~approximately~~the $3net income of our Israeli subsidiary and the reduction in value of the Israeli subsidiary’s deferred tax assets due to a tax rate reduction.~~0 million~~ ~~for~~ The U.S. tax benefit relating to the ~~year~~2011 ~~ended~~operating ~~December 31~~losses of the Company in the U.S. was not recorded based on management’s current estimate that the benefit will not be utilized in the near future. As a result, ~~2009~~the Company increased the valuation allowance to 62% of its net deferred tax assets in the U.S. As a ~~percentage~~result of ~~revenues~~its operation through December 31, ~~general~~2010 and ~~administrative~~its ~~expenses~~ then estimate of its future operating results, the Company recorded an income tax benefit of $0.5 million for the year ended December 31, 2010 ~~decreased~~by reducing its valuation allowance to ~~8.6~~50% ~~from~~of 9the net deferred tax assets in the U.6S. The Company decreased its valuation allowance by approximately $0.7 million or 37% ~~for~~of the ~~year~~net ~~ended~~deferred tax asset at December 31, ~~2009~~ 2010. In addition, the Company recorded a $0.2 million benefit attributable to the reversal of accrued taxes for prior years by the Israeli subsidiary that were no longer required as those years were settled with the Israeli taxing authorities. The foregoing were offset by approximately $0.4 million of net tax charges primarily resulting from taxes currently payable and foreign tax rate changes.

~~Sales~~Other ~~and~~comprehensive ~~marketing~~(loss)-foreign ~~expenses~~currency translation adjustment. ~~Sales~~The ~~and~~Company ~~marketing~~recorded ~~expenses~~other ~~for~~comprehensive (loss)-foreign translation adjustment relating to the ~~year~~translation ~~ended~~of ~~December 31, 2010~~its German ~~were~~subsidiary’s ~~approximately~~financial ~~$2.9 million~~statements ~~compared~~into toU.S. ~~approximately~~dollars of $30.6 1 million for each of the ~~year~~years ended December 31, ~~2009~~2011 and December 31, a2010. ~~decrease~~This comprehensive loss is the result of ~~approximately~~the ~~$0.7 million.~~Euro ~~This~~exchange ~~decrease~~rate ~~reflects~~to ~~reduced~~the ~~sales rep~~dollar ~~fees,~~declining ~~reduced~~from ~~labor~~December ~~costs~~31, 2010 and ~~reduced~~December ~~travel~~31, 2009 levels, respectively. Prior to January 1, 2010 the Company did not reflect foreign translation gains or losses separately as they were not material.

~~Sales,~~Liquidity ~~marketing, general~~ and ~~administrative~~Capital expenses-Microwave Vision Group. The Company has recorded approximately $1.7 million in sales, marketing, general and administrative expenses for the year ended December 31, 2010 under the Service Agreement with MVG. The Company recorded approximately $1.5 million in sales, marketing, general and administrative expenses for the year ended December 31, 2009. Resources

~~Research~~The ~~and~~Company ~~development~~has ~~expenses.~~satisfied ~~Research~~its ~~and~~working ~~development~~capital ~~expenses~~requirements ~~for~~through ~~the~~cash ~~years~~flows ~~ended December 31~~from operations, ~~2010~~ and short ~~December 31,~~term ~~2009~~bank ~~were both approximately $1~~financing.~~3 million.~~

~~Gain~~Net oncash ~~Disposal~~generated ofby ~~Assets.~~operating ~~The~~activities ~~Company’s~~during ~~wholly~~the ~~owned~~year ~~subsidiary~~ended ~~AEMI~~December ~~had~~31, a2011 ~~fire~~was onapproximately ~~November 3,~~$1.5 ~~2010~~million ~~that~~versus ~~destroyed~~net ~~the~~cash ~~oven~~generated ~~used~~by tooperating ~~dry~~activities ~~the~~of ~~anechoic~~$1.7 ~~foam~~million ~~they~~for ~~produce.~~the ~~Through~~year ended December 31, 2010. ~~the~~The ~~Company~~most ~~has~~significant ~~received~~source ~~$134,000~~of ~~representing~~cash for the ~~replacement~~year ~~cost~~ended ofDecember ~~certain~~31, ~~machinery~~2011 ~~with a~~was ~~depreciated~~the ~~book~~increase ~~basis~~in billings in excess of ~~$25,000~~costs ~~resulting~~and inestimated aearnings ~~gain~~on uncompleted contracts of $~~109,000~~3.2 ~~Insurance~~million. ~~recoveries~~The ~~for other~~most ~~costs~~significant ~~and~~uses ~~business~~of ~~interruption~~cash ~~coverage~~for ~~are~~the ~~still~~year ~~pending~~ended at December 31, ~~2010~~2011 ~~and~~were ~~will~~the ~~be reported~~increase asin ~~revenue~~accounts ~~upon~~receivable ~~settlement~~of ~~with~~$1.0 million and the ~~insurance~~reduction ~~carrier~~of accounts payable and accrued expenses of $0. 8 million.

~~Other~~Net ~~(loss),net.~~cash ~~Other~~used ~~(loss),~~in ~~net,~~investing activities for the purchase of property and equipment for the year ended December 31, ~~2010~~2011 was ~~approximately~~ $731.3 million,~~000~~ asattributable ~~compared~~primarily to ~~$217,000~~the purchase of assets for use in manufacturing by AEMI and the ~~year~~Israeli ~~ended~~subsidiary. ~~December 31,~~In ~~2009~~addition, athe ~~decrease~~Company has invested as of ~~approximately $144~~December 31,~~000.~~ ~~This~~2011, ~~decrease~~$0.3 ismillion ~~primarily~~in ~~due~~a tonew ~~decreased~~software ~~foreign~~product ~~exchange~~that ~~losses~~is ~~due~~expected to ~~the~~be ~~strength of~~released ~~the~~in ~~dollar versus~~ the ~~Euro~~quarter ~~and~~ending ~~reduced~~June ~~bank~~30, ~~guarantee fees~~2012.

~~Income~~During ~~taxes. Income tax benefit for~~ the year ended December 31, ~~2010 was approximately $497~~2011,~~000~~ ~~compared~~the toCompany anused ~~income~~proceeds ~~tax benefit~~ of $~~508,000~~0.5 ~~for~~million ~~the~~under ~~year~~its ~~ended December 31, 2009~~$2.25 ~~The Company~~million ~~records~~Revolving ~~income~~Demand ~~tax~~Note ~~expense~~bank onfacility ~~profitable~~to ~~operations~~help ~~and~~meet ~~generally~~its ~~records~~working ~~income~~capital ~~tax benefits~~cash onrequirements. ~~losses~~In ~~where~~addition, ~~applicable~~the ~~except~~Company ~~where~~borrowed itapproximately is$0.14 ~~not~~million ~~considered~~of ~~more likely than not that~~ the ~~future~~ ~~benefit~~$0.25 ofmillion ~~such~~available ~~losses~~under ~~will~~its beTerm ~~realized~~Note-Non ~~for~~Revolving ~~income~~Line ~~tax~~of ~~purposes~~Credit into ~~which~~purchase ~~case~~ a ~~valuation allowance~~Computer isNumerical ~~recorded~~Control ~~equal~~(CNC) tomachine ~~such~~for ~~tax~~its ~~benefit. Such~~subsidiary, ~~allowances were recorded in 2008 and certain prior years~~AEMI. AsOn aSeptember ~~result~~23, of2011, ~~its~~The ~~profitability~~Term inNote-Non ~~2010~~Revolving ~~and~~Line ~~its estimate~~ of ~~the~~Credit ~~ability~~was extended to ~~generate sufficient~~August ~~future~~31, ~~taxable income in the U~~2017.~~S.,~~ ~~Israel~~The ~~and~~Bank ~~Germany~~also toextended ~~realize~~ the ~~benefit~~date ofthat ~~a portion~~the ofCompany ~~its~~can ~~previously~~draw ~~unrecognized~~on ~~deferred tax assets,~~ the ~~Company~~Term ~~decreased~~Note-Non ~~its~~Revolving ~~valuation allowance~~Line byof ~~approximately~~Credit ~~$0.7 million~~to atAugust ~~December~~ 31, ~~2010~~2012. InThe ~~addition,~~revolving ~~the~~line ~~Company~~of ~~recorded~~credit ~~a $0.2 million~~agreement ~~benefit~~requires ~~attributable~~an toannual ~~the~~“clean-up” ~~reversal~~period of ~~accrued~~30 ~~taxes~~days ~~for~~where ~~prior years by the Israeli subsidiary that are~~ no ~~longer~~loans ~~required~~under ~~as those years have been settled with~~ the ~~Israeli~~ ~~taxing~~line ~~authorities.~~may ~~The~~be ~~foregoing were offset by approximately $0~~outstanding.~~4 million of net tax charges primarily resulting from taxes currently payable and foreign tax rate changes.~~

18 Orbit/FR Engineering, LTD has established lines of credit with two Israeli banks and one Indian Bank (Israeli Branch). The line of credit from one Israeli bank has limits of NIS 378,000 (approximately $0.1 million) and $1.9 million for the issuance of bank guarantees of letters of credit in favor of customers, while the other Israeli bank has limits of $250,000 and $2.4 million for the issuance of bank guarantees of letters of credit in favor of customers. The Indian bank line of credit is $3.1 million for the issuance of bank guarantees of letters of credit in favor of customers. The interest rate charged by all the banks is LIBOR plus 2.25%. The bank agreements with all three banks do not have expiration dates but are subject to termination on a quarterly basis. As of December 31, 2011 there were no amounts outstanding under these lines of credit.

~~Table~~The Company’s functional currency for the operations of ~~Contents~~its subsidiary in Israel is the U.S. dollar. The Company’s functional currency for the operations of its German subsidiary is the Euro. The translation of foreign subsidiaries’ financial statements denominated in a functional currency other than the U.S. dollar into U.S. dollars is performed at each balance sheet date as follows: The foreign currency statement of operations is translated at the average exchange rate in effect for the period. The balance sheet asset and liability accounts are translated at the period-end exchange rate. The Company has exposure to currency fluctuations as a result of billing certain of its customers in foreign currency. The Company primarily bills its customers in U.S. dollars with the exception of GmbH which bills its customers in Euros. For the year ended December 31, 2011, approximately 74% of the Company’s revenues were billed in U.S. dollars. Most of the costs of the Company’s contracts have been, and are expected to continue to be, primarily U.S. dollar-denominated except for wages for employees of the Company’s Israeli and German subsidiaries, which are denominated in local currency. Other than GmbH, the Company intends to continue to enter primarily into U.S. dollar-denominated contracts.

Other comprehensive (loss)-foreign currency translation adjustment. The Company recorded other comprehensive (loss)-foreign translation adjustment of $0.1 million form the year ended December 31, 2010. This comprehensive (loss) is the result of the Euro exchange rate to the dollar declining from December 31, 2009 levels. Prior to January 1, 2010 the Company did not reflect foreign translation gains or losses separately as they were not material. 18

~~Liquidity and Capital Resources~~ Index

~~The~~Inflation ~~Company has historically satisfied its working capital requirements through cash flows from operations,~~ and ~~through short term bank financing.~~ Seasonality

~~Net~~The ~~cash~~Company ~~generated~~does bynot ~~operating~~believe ~~activities~~that ~~during~~inflation ~~the~~or ~~year~~seasonality ~~ended~~has ~~December 31,~~had ~~2010~~a ~~was approximately $1.7 million versus net cash generated by operations of $2.6 million for the year ended December 31, 2009. In addition to net income of $2.3 million the most~~ significant ~~sources~~effect of cash for the year ended December 31, 2010 were the decrease of accounts receivable. The most significant uses of cash for the year ended December 31, 2010 were the increase in costs and estimated earnings in excess of billings on ~~uncompleted contracts of $3.3 million and~~ the ~~reduction of~~Company’s ~~billings~~operations into ~~excess of costs and estimated earnings on uncompleted contracts of $603,000~~date.

~~Net~~Impact ~~cash used in investing activities for the year ended December 31, 2010 was $630,000 resulting primarily from the purchase~~ of ~~assets~~Recent ~~partially~~Accounting ~~offset by the insurance proceeds received by the Company for the oven destroyed in the fire.~~ Pronouncements

~~During~~Public ~~the~~companies ~~year~~in ~~ended~~the ~~December 31,~~United ~~2010,~~States ~~the~~are ~~Company~~subject ~~eliminated~~to ~~its~~the ~~outstanding~~accounting ~~borrowings under~~and ~~the~~reporting ~~lines~~requirements of ~~credit.~~various ~~On December 13~~authorities, ~~2010~~including the ~~Company~~Financial ~~signed~~Accounting aStandards ~~new~~Board ~~domestic~~(“FASB”) ~~demand~~and ~~revolving~~the ~~line~~Securities ~~of credit~~and ~~facility~~Exchange ~~agreement~~Commission ~~with Citizens Bank~~ (~~the~~“~~Bank~~SEC”). ~~The~~These ~~facility~~authorities ~~provides~~issue ~~for~~numerous ~~loans~~pronouncements, tomost ~~a maximum~~ of ~~$2.25 million.~~which ~~The~~are ~~line can also be used for the issuance of letters of credit. The interest rate on outstanding loans is at LIBOR rate plus 2.25%. The new facility does~~ not ~~contain~~applicable ~~any~~to ~~covenants regarding maintenance of financial amounts or ratios. The agreement prohibits~~ the ~~payment~~Company’s ofcurrent ~~dividends on any distribution on account of any class of capital stock in cash~~ or ~~property~~reasonably ~~without~~foreseeable ~~prior~~operating ~~written consent of the Bank~~structure. ~~The~~Below ~~line~~are ~~of credit is collateralized by~~ the ~~assets~~new ofauthoritative ~~Orbit~~pronouncements ~~Advanced~~that ~~Technologies,~~management ~~Inc.~~believes ~~and~~are ~~Advanced~~relevant ~~ElectroMagnetics, Inc.~~to ~~subsidiaries of Orbit/FR, Inc. In addition,~~ the Company’s ~~also~~current ~~signed a $250,000 asset term note non-revolving line of credit with the Bank~~operations. ~~This facility has an interest rate of prime plus two and one-half percent and allows up to a five year amortization of any advances under the facility.~~

~~Orbit/FR~~In ~~Engineering~~April 2009, ~~LTD has established lines of credit with~~ the ~~two~~FASB ~~Israeli~~issued ~~banks~~FSP ~~and one Indian Bank (Israeli Branch)~~No. ~~The~~FAS-107-1 ~~line of credit from one Israeli bank has a NIS denominated limit of 378,000~~ and ~~USD~~APB 28-1~~.9 million~~, ~~for~~Interim ~~the~~Disclosures ~~issuances~~about ofFair ~~bank~~Value ~~guarantees~~ of ~~letters~~Financial ofInstruments. ~~credit~~This inamends ~~favor of~~previous ~~customers~~guidance, ~~and~~to ~~one~~require ~~Israeli~~disclosures ~~bank~~about ~~has~~fair avalue ~~dollar denominated limit~~ of ~~$250,000~~financial ~~and~~instruments ~~$2.4 million~~ for ~~the~~ ~~issuances~~interim ofreporting ~~bank~~periods ~~guarantees~~as ofwell ~~letters~~as ~~of credit~~ in ~~favor~~annual offinancial ~~customers~~statements. ~~The~~This ~~Indian~~guidance ~~bank~~was ~~line of~~effective ~~credit is $500,000 and $3.1 million~~ for ~~the~~interim ~~issuances~~reporting ofperiods ~~bank~~ending ~~guarantees~~after ofJune ~~letters~~15, ~~of credit in favor of customers~~2009. ~~The~~This ~~interest~~guidance ~~rate~~did ~~charged by all the banks is at LIBOR plus 2.25%. The bank agreements with all three banks do~~ not have ~~expiration~~any ~~dates~~impact ~~but are subject to termination~~ on ~~a quarterly~~our ~~basis.~~consolidated Asfinancial ~~of December 31, 2010 there were no amounts outstanding under these lines of credit~~statements.

~~The~~In ~~Company~~October ~~has~~2009, ~~exposure~~the toFASB ~~currency~~issued ~~fluctuations~~revised asguidance arelated ~~result~~to ofmultiple-element ~~billing~~arrangements ~~certain~~which ofrequires ~~its contracts~~an inentity ~~foreign~~to ~~currency.~~allocate ~~When~~arrangement ~~selling~~consideration toat ~~customers~~the ininception ~~countries~~of ~~with~~an ~~less~~arrangement ~~stable~~to ~~currencies, the~~all ~~Company~~deliverables ~~bills~~based inon Urelative-selling-price.S. ~~dollars.~~This ~~For~~update eliminates the ~~year~~use ~~ended~~of ~~December 31,~~the ~~2010,~~residual ~~approximately~~method ~~79%~~ of ~~the Company’s~~allocation ~~revenues~~and ~~were~~requires ~~billed~~the relative-selling-price method in ~~U.S.~~all ~~dollars~~circumstances. ~~Most~~This ofguidance ~~the~~was ~~costs~~effective offor ~~the~~fiscal ~~Company’s~~years ~~contracts~~beginning ~~have been,~~on ~~and~~or ~~are~~after ~~expected~~September to15, ~~continue~~2010. toCompanies ~~be,~~may ~~U.S.~~use ~~dollar-denominated~~either ~~except~~prospective application for ~~wages~~revenue ~~for~~arrangements ~~employees of~~entered into, or materially modified, after the ~~Company’s~~effective ~~Israeli~~date ~~and~~or ~~German~~through ~~subsidiaries,~~retrospective ~~which~~application ~~are~~to ~~denominated~~all inrevenue ~~local~~arrangements ~~currency~~for all periods presented. The ~~Company~~ ~~intends~~revised toguidance ~~continue~~did tonot ~~enter~~have ~~into~~a ~~U.S.~~material ~~dollar-denominated~~impact ~~contracts~~on ours consolidated financial statements.

19 In October 2009, the FASB issued amended guidance that affects how entities account for revenue arrangements that contain both hardware and software elements. Products that rely on software will be accounted for under the revised multiple-element arrangement revenue recognition guidance mentioned above rather than software revenue recognition guidance. The revised guidance must be adopted no later than fiscal years beginning on or after September 15, 2010. The transition method and period for the adoption of this guidance and the revisions to the multiple-elements arrangements guidance noted above must be the same. This guidance did not have a material impact on our consolidated financial statements.

~~Table~~Beginning in 2012 under FASB accounting standards update 2011-8, the test for impairment of ~~Contents~~goodwill allows an entity the option to eliminate the second portion of the annual impairment test if on its assessment of qualitative factors it is determined that the fair value of the reporting unit is not less than its carrying amount as of the valuation date.

~~Inflation~~Management ~~and~~does ~~Seasonality~~ not believe that any other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s consolidated financial statements.

~~The Company does not believe that inflation or seasonality has had a significant effect on the Company’s operations to date.~~ 19

~~Impact of Recent Accounting Pronouncements~~ Index

~~Public~~ITEM companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”)7A. ~~These~~QUANTITATIVE ~~authorities~~AND ~~issue~~QUALITATIVE ~~numerous~~DISCLOSURE ~~pronouncements,~~ABOUT ~~most of~~MARKET which are not applicable to the Company’s current or reasonably foreseeable operating structure. Below are the new authoritative pronouncements that management believes are relevant to the Company’s current operations. RISK

InAs ~~April 2009,~~a ~~the~~smaller FASB issued FSP No. FAS-107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This amends previous guidance, to require disclosures about fair value of financial instruments for interim reporting ~~periods as well as in annual financial statements. This guidance was effective for interim reporting periods ending after June 15~~company, ~~2009. This~~we ~~guidance~~have ~~did~~elected not ~~have~~to ~~any~~provide ~~impact~~the oninformation ~~our~~required ~~consolidated~~by ~~financial~~this ~~statements~~item.

InITEM October 2009, the FASB issued revised guidance related to multiple-element arrangements which requires an entity to allocate arrangement consideration at the inception of an arrangement to all deliverables based on relative-selling-price8. ~~This~~FINANCIAL ~~update~~STATEMENTS ~~eliminates~~AND ~~the~~SUPPLEMENTARY use of the residual method of allocation and requires the relative-selling-price method in all circumstances. This guidance is effective for fiscal years beginning on or after September 15, 2010. Companies may use either prospective application for revenue arrangements entered into, or materially modified, after the effective date or through retrospective application to all revenue arrangements for all periods presented. The Company does not believe this amended guidance will have a material impact on its consolidated financial statements. DATA

InThe ~~October 2009,~~reports ~~the~~of ~~FASB~~independent ~~issued~~registered ~~amended~~public ~~guidance~~accounting ~~that~~firms ~~affects how entities account for revenue arrangements that contain both hardware~~ and ~~software~~consolidated ~~elements.~~financial ~~Products~~statements ~~that~~are ~~rely~~set ~~on software~~forth ~~will~~in bethis ~~accounted~~report for under the revised multiple-element arrangement revenue recognition guidance mentioned above rather than software revenue recognition guidance. The revised guidance must be adopted no later than fiscal years beginning on orpage ~~after September 15, 2010. The transition method and period for the adoption of this guidance and the revisions to the multiple~~F-~~elements arrangements guidance noted above must be the same~~1. ~~The Company does not believe that this guidance will have a material impact on its consolidated financial statements.~~

~~Management~~ITEM ~~does~~9. ~~not~~CHANGES ~~believe~~IN ~~that~~AND ~~any~~DISAGREEMENTS ~~other~~WITH ~~recently~~ACCOUNTANTS ~~issued,~~ON ~~but~~ACCOUNTING ~~not~~AND ~~yet~~FINANCIAL ~~effected, accounting standards if currently adopted would have a material effect on the Company’s consolidated financial statements.~~ DISCLOSURES

20 None.

~~Table~~ITEM of9A(T). CONTROLS ~~Contents~~AND PROCEDURES

~~ITEM~~(a) 7AEvaluation of disclosure controls and procedures. ~~QUANTITATIVE~~The ~~AND~~Company’s ~~QUALITATIVE~~disclosure ~~DISCLOSURE~~controls ~~ABOUT~~and ~~MARKET~~procedures ~~RISK~~(as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed by us in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to our management on a timely basis to allow decisions regarding required disclosure. The Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2011. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2011, these controls and procedures were effective.

As(b) Management’s Annual Report on Internal Control Over Financial Reporting. The management of Orbit/FR, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a ~~smaller~~process designed to provide reasonable assurance regarding the reliability of financial reporting ~~company~~and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, wein ~~have~~reasonable ~~elected~~detail, ~~not~~accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~information~~Company’s ~~required~~assets ~~by this~~that ~~item~~could have a material effect on the financial statements.

~~ITEM~~Because 8of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. ~~FINANCIAL~~All ~~STATEMENTS~~internal ~~AND~~control ~~SUPPLEMENTARY~~systems, ~~DATA~~no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

~~The~~Management ~~reports~~has ofassessed ~~independent~~the ~~registered~~effectiveness ~~public~~of ~~accounting~~the ~~firms~~Company’s ~~and~~internal ~~consolidated~~control over financial ~~statements~~ ~~and~~reporting ~~schedule~~as ~~are~~of December 31, 2011, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in ~~this~~Internal ~~report~~Control—Integrated ~~beginning~~Framework. Based on ~~page~~that ~~F-1~~assessment, management concludes that, as of December 31, 2011, the Company’s internal control over financial reporting is effective.

~~ITEM~~This 9annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. ~~CHANGES~~Management’s INreport ~~AND~~was ~~DISAGREEMENTS~~not ~~WITH~~subject ~~ACCOUNTANTS~~to ONattestation ~~ACCOUNTING~~by ~~AND~~the ~~FINANCIAL~~Company’s ~~DISCLOSURES~~registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.

~~None~~(c) Changes in Internal Control Over Financial Reporting. There have been no changes in internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the Company’s fiscal quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM ~~9A(T)~~9B. OTHER ~~CONTROLS AND PROCEDURES~~INFORMATION

~~(a) Evaluation of disclosure controls and procedures~~None. The Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed by us in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to our management on a timely basis to allow decisions regarding required disclosure. The Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2010. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2010, these controls and procedures were effective.

(b) Management’s Annual Report on Internal Control Over Financial Reporting. The management of Orbit/FR, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. 20

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate. Index

~~Management~~PART has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on that assessment, management concludes that, as of December 31, 2010, the Company’s internal control over financial reporting is effective. III

~~This~~Item ~~annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting~~10. Directors, ~~Management’s~~Executive ~~report~~Officers ~~was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities~~ and ~~Exchange~~Corporate ~~Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K~~Governance.

~~(c) Changes~~Board inof Internal Control Over Financial Reporting. There have been no changes in internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the Company’s fiscal quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Directors

~~ITEM~~The ~~9B.~~following ~~OTHER~~table ~~INFORMATION~~sets forth the name, age and principal occupation of each director.

None.

NAME	AGE	DIRECTOR SINCE	PRINCIPAL OCCUPATION
Dr. Philippe Garreau	50	2008	Chairman of the Board of the Company, President and CEO of Microwave Vision, S.A.
Per Iversen	48	2008	President and CEO of Orbit/FR, Inc.
Raymond Boch	47	2008	Global Account Director for ORACLE Corporation
Douglas Merrill	44	2008	President of Manufacturing and Supply Chain Strategies
Eric Anderson	52	2008	President of SEAKR Engineering, Inc.

21 Dr. Philippe Garreau has served as Chairman of the Board of the Company since May 2008. Dr. Garreau has held the position of President and CEO of Microwave Vision, S.A. (formerly Satimo, S.A.) since 1996. Prior to joining Microwave Vision, Dr. Garreau worked for the European Space Agency’s technology center in the Netherlands. Dr. Garreau provides the board of directors with significant knowledge of our industry.

~~Table~~Per Iversen was named a director of ~~Contents~~the Company and President and its CEO in May 2008. Prior to joining the Company, Mr. Iversen had been employed by Satimo, S.A. since 1998.now an affiliate of the Company. Most recently, Mr. Iversen was Chief Technology Officer and Director of U.S. Operations of Satimo, S.A. Prior to joining Satimo, Mr. Iversen spent seven years with the European Space Agency where he managed antenna development programs for both terrestrial and space- borne applications. Mr. Iversen has significant experience in our industry and, additionally, his position as the Company’s president and chief executive officer provides the board of directors with unique insight into the operations of the Company.

~~PART~~Raymond ~~III~~ Boch was named a director of the Company in May 2008 and is a Global Account Director for ORACLE Corporation where he has been since 2004. Prior to ORACLE, Mr. Boch spent several years dealing with international development and account management for French Telecom at Hewlett Packard. Mr. Boch provides the board of directors with significant experience in international business matters. Mr. Boch also is an independent director who is unaffiliated with Microwave Vision, the Company’s majority stockholder.

~~Item~~Douglas 10Merrill was named a director of the Company in June 2008 and is the President of Manufacturing and Supply Chain Strategies, an operations management consulting firm. ~~Directors~~Prior to Manufacturing and Supply Chain Strategies, ~~Executive~~Mr. ~~Officers~~Merrill served as Operations Manager for Husky Injection Molding from May 2005 to June 2008. Between 1991 and ~~Corporate~~2005 ~~Governance~~Mr. Merrill held various positions with General Electric Corporation, most recently serving as its Manufacturing Integration Leader for its GE Energy Global Supply Chain Management division. Mr. Merrill provides the board of directors with significant management experience in global supply chain and has expertise in accounting and financial matters. Mr. Merrill also is an independent director who is unaffiliated with Microwave Vision, the Company’s majority stockholder.

~~Board~~Eric Anderson was named a director of ~~Directors~~ the Company in June 2008 and is the President of SEAKR Engineering, Inc. where he has been employed since 1985 and currently is responsible for operations and software development. Mr. Anderson provides the board of directors with significant experience in technical and engineering matters. Mr. Anderson also is an independent director who is unaffiliated with Microwave Vision, the Company’s majority stockholder.

~~The following table sets forth the name, age and principal occupation of each director.~~ 21

		DIRECTOR
NAME	AGE	SINCE	PRINCIPAL OCCUPATION
Dr. Philippe Garreau	49	2008	Chairman of the Board of the Company, President and CEO of Microwave Vision, S.A.
Per Iversen	47	2008	President and CEO of Orbit/FR, Inc.
Raymond Boch	46	2008	Global Account Director for ORACLE Corporation
Douglas Merrill	43	2008	President of Manufacturing and Supply Chain Strategies
Eric Anderson	51	2008	President of SEAKR Engineering, Inc.

Index

~~Dr. Philippe~~Executive ~~Garreau~~Officers ~~has~~and ~~served~~Key asEmployees ~~Chairman~~ of the ~~Board of the~~ Company since May 2008. Dr. Garreau has held the position of President and CEO of Microwave Vision, S.A. (formerly Satimo, S.A.) since 1996. Prior to joining Microwave Vision, Dr. Garreau worked for the European Space Agency’s technology center in the Netherlands. Dr. Garreau provides the board of directors with significant knowledge of our industry.

~~Per~~The ~~Iversen~~following ~~was~~table ~~named~~sets aforth ~~director~~certain ofinformation ~~the~~regarding ~~Company and President and its CEO in May 2008. Prior to joining~~ the Company, Mr. Iversen had been employed by Satimo, S.A. since 1998. Most recently, Mr. Iversen was Chief Technology Officer and Director of U.S. Operations of Satimo, S.A. Prior to joining Satimo, Mr. Iversen spent seven years with the European Space Agency where he managed antenna development programs for both terrestrial and space- borne applications. Mr. Iversen has significant experience in our industry and, additionally, his position as the Company’s ~~president and chief~~ executive ~~officer~~officers ~~provides~~and ~~the~~certain ~~board~~key ~~of directors with unique insight into the operations of the Company~~employees.

~~Raymond~~The ~~Boch~~biographical ~~was~~information ~~named a director of the Company in May 2008 and is a Global Account Director~~ for ~~ORACLE Corporation where he has been since May, 2004. Prior to ORACLE,~~ Mr. ~~Boch~~ ~~spent~~Iversen ~~several~~is ~~years dealing~~set ~~with~~forth ~~international~~above ~~development~~under ~~and~~“Board ~~account management for French Telecom at Hewlett Packard. Mr. Boch provides the board~~ of ~~directors with significant experience in international business matters~~Directors”. ~~Mr. Boch also is an independent director who is unaffiliated with Microwave Vision, the Company’s majority stockholder.~~

Douglas Merrill was named a director of the Company in June 2008 and since August, 2008 has served as the President of Manufacturing and Supply Chain Strategies, an operations management consulting firm. Prior to Manufacturing and Supply Chain Strategies, Mr. Merrill served as Operations Manager for Husky Injection Molding from May 2005 to June 2008. Between 1991 and 2005 Mr. Merrill held various positions with General Electric Corporation, most recently serving as its Manufacturing Integration Leader for its GE Energy Global Supply Chain Management division. Mr. Merrill provides the board of directors with significant management experience in global supply chain and has expertise in accounting and financial matters. Mr. Merrill also is an independent director who is unaffiliated with Microwave Vision, the Company’s majority stockholder.

NAME	AGE	POSITION
Per Iversen	48	President and Chief Executive Officer
Relland Winand	57	Chief Financial Officer
John Aubin	58	Vice President, Business Development and CTO
Moshe Pinkasy	61	Managing Director, Engineering
Marcel Boumans	53	Managing Director, GmbH
William Campbell	56	Vice President, Engineering and Program Management

~~Eric~~Relland ~~Anderson~~Winand was named aChief ~~director~~Financial ofOfficer ~~the Company~~ in ~~June~~ March 2008. ~~and~~From is2003 ~~the~~to ~~President~~June ~~of SEAKR Engineering~~2007, ~~Inc. where he has been employed since 1985 and currently is responsible for operations and software development.~~ Mr. ~~Anderson~~ ~~provides~~Winand ~~the~~served ~~board of directors with significant experience~~ in ~~technical~~several ~~and~~capacities ~~engineering~~at ~~matters~~Traffic.com, MrInc. ~~Anderson~~ ~~also~~including isController, anVice ~~independent~~President ~~director~~Finance ~~who~~and ~~is unaffiliated~~Vice ~~with~~President ~~Microwave Vision, the Company’s majority stockholder~~Administration.

22 John Aubin was named Vice President Business Development and Chief Technology Officer in 2002, and served as Vice President of Measurement Systems since 1996 to 2001. From 1991 to 1996, Mr. Aubin was Vice President in charge of the Antenna Measurement Business Area for Flam & Russell.

~~Table~~Moshe Pinkasy has served as the Managing Director of ~~Contents~~Engineering since January 1997. From February 1996 to December 1996, Mr. Pinkasy was Alchut’s Manager of the Microwave Test and Measurement Business in Israel. From 1992 to 1996, Mr. Pinkasy served, in various capacities, as the Mechanical Engineering Department Manager for Alchut.

~~Executive~~Marcel ~~Officers~~Boumans has served as the Managing Director of GmbH since March 1997. Since January 1, 2000, Mr. Boumans has been responsible for sales and ~~Key~~customer ~~Employees~~support for Europe. From June 1995 to March 1997, Mr. Boumans was a Systems Design Engineer for Dornier Satelliten Systeme GmbH, the satellite systems subsidiary of Daimler-Benz Aerospace. From 1990 to 1995, Mr. Boumans was a Systems Design Engineer for Dornier GmbH, the ~~Company~~ communications and defense subsidiary of Daimler-Benz Aerospace.

~~The~~William ~~following~~Campbell ~~table~~joined ~~sets~~the ~~forth~~Company ~~certain~~as ~~information~~Vice ~~regarding~~President, ~~the~~Engineering ~~Company’s~~and ~~executive~~Program ~~officers~~ Management in December 2002. Mr. Campbell managed Optical Transponder development and ~~certain~~production ~~key~~activities ~~employees~~at JDS Uniphase Transmission Systems Division from 2000 to 2002. Prior to that, Mr. Campbell worked for BAE systems where he served as Business Area Director of High Power Transmission Systems, and other various program management activities during his 13 years at the company.

~~The~~Section ~~biographical~~16(a) ~~information~~Beneficial ~~for~~Ownership ~~Mr. Iversen~~Reporting ~~is set forth above under “Board of Directors”.~~ Compliance

NAME	AGE	POSITION
Per Iversen	47	President and Chief Executive Officer
Relland Winand	56	Chief Financial Officer
John Aubin	57	Vice President, Business Development and CTO
Moshe Pinkasy	60	Managing Director, Engineering
Marcel Boumans	52	Managing Director, GmbH
William Campbell	55	Vice President, Engineering and Program Management

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the United States Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

~~Relland~~To ~~Winand~~the ~~was~~Company’s ~~named~~knowledge, ~~Chief~~based ~~Financial~~solely ~~Officer~~on ina ~~March 2008.~~review ~~From~~of ~~2003~~the copies of such reports furnished to ~~June 2007,~~the ~~Mr. Winand~~Company ~~served~~and inwritten ~~several~~representations ~~capacities~~that atno ~~Traffic.com~~other reports were required, ~~Inc.~~during ~~including~~fiscal ~~Controller~~year ended December 31, ~~Vice~~2011, ~~President Finance~~all Section 16(a) filing requirements applicable to its officers, directors and ~~Vice~~greater ~~President~~than ~~Administration~~ten percent stockholders were complied with.

John Aubin was named Vice President Business Development and Chief Technology Officer in 2002, and served as Vice President of Measurement Systems since 1996 to 2001. From 1991 to 1996, Mr. Aubin was Vice President in charge of the Antenna Measurement Business Area for Flam & Russell. 22

Moshe Pinkasy has served as the Managing Director of Engineering since January 1997. From February 1996 to December 1996, Mr. Pinkasy was Alchut’s Manager of the Microwave Test and Measurement Business in Israel. From 1992 to 1996, Mr. Pinkasy served, in various capacities, as the Mechanical Engineering Department Manager for Alchut. Index

~~Marcel~~Code ~~Boumans has served as the Managing Director~~ of GmbH since March 1997. Since January 1, 2000, Mr. Boumans has been responsible for sales and customer support for Europe. From June 1995 to March 1997, Mr. Boumans was a Systems Design Engineer for Dornier Satelliten Systeme GmbH, the satellite systems subsidiary of Daimler-Benz Aerospace. From 1990 to 1995, Mr. Boumans was a Systems Design Engineer for Dornier GmbH, the communications and defense subsidiary of Daimler-Benz Aerospace. Ethics

~~William~~The ~~Campbell~~Company ~~joined~~has adopted the ~~Company~~ORBIT/FR, asInc. ~~Vice~~Employee ~~President,~~Ethics ~~Engineering~~Policy ~~and~~that ~~Program~~applies ~~Management~~to ~~in December 2002.~~all Mrof its officers and employees. ~~Campbell~~ ~~managed~~If ~~Optical~~the ~~Transponder~~Company ~~development~~makes ~~and~~any ~~production~~amendment ~~activities~~to ~~at JDS~~a ~~Uniphase~~provision ~~Transmission~~of ~~Systems~~the ~~Division~~Employee ~~from~~Ethics ~~2000~~Policy that applies to ~~2002.~~the ~~Prior~~Company’s toprincipal ~~that~~executive officer, ~~Mr. Campbell~~principal ~~worked for~~financial ~~BAE~~officer, ~~systems~~principal ~~where~~accounting heofficer ~~served~~or ascontroller, ~~Business~~or ~~Area~~persons ~~Director~~performing similar functions, or grants any waiver from a provision of ~~High~~the ~~Power~~Employee ~~Transmission~~Ethics ~~Systems~~Policy that applies to any such persons, ~~and other~~any ~~various~~such ~~program~~amendment ~~management~~or ~~activities~~waiver ~~during~~will ~~his~~be ~~13 years~~publicly atdisclosed ~~the~~as ~~company~~required by applicable law.

~~Section 16(~~A copy of the ORBIT/FR, Inc. Employee Ethics Policy was filed with the Securities and Exchange Commission on March 30, 2004 as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and a) ~~Beneficial~~copy ~~Ownership~~of ~~Reporting~~the ~~Compliance~~ Employee Ethics Policy will be provided to any person without charge, upon request, by contacting the Company by mail at ORBIT/FR, Inc., 506 Prudential Road, Horsham, Pennsylvania 19044, or by phone at (215) 674-5100.

~~Section 16(a)~~Director of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the United States Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Independence

ToOur Board of Directors affirmatively determines the ~~Company’s~~independence ~~knowledge,~~of ~~based~~each ~~solely~~director onand nominee for election as a ~~review~~director ofusing the ~~copies~~standards ofset ~~such~~forth ~~reports~~in ~~furnished to~~rules ~~the~~promulgated ~~Company~~by ~~and~~The ~~written~~NASDAQ ~~representations~~Stock ~~that~~Market noLLC(“NASDAQ”) ~~other~~for ~~reports~~determining ~~were~~the ~~required~~independence of a director, ~~during~~including ~~fiscal~~the ~~year ended~~consideration ~~December 31~~of any relationship which, ~~2010~~in the opinion of the Board, ~~all~~would ~~Section~~interfere ~~16(~~with the exercise of independent judgment in carrying out the director’s responsibilities as a) ~~filing~~member ~~requirements~~of ~~applicable~~the toBoard. ~~its~~During ~~officers~~the Board’s annual review of director independence, ~~directors~~ ~~and~~the ~~greater~~Board ~~than~~determined ~~ten~~that ~~percent~~each ~~stockholders~~of ~~were~~Mr. ~~complied~~Boch, ~~with~~Mr. Merrill and Mr. Anderson is an “independent” director.

23 Information Regarding Corporate Governance

~~Table~~Committees of ~~Contents~~the Board of Directors

~~Code~~The Board of ~~Ethics~~ Directors maintains a standing Compensation Committee and Audit Committee. The Board of Directors does not maintain a standing committee regarding the nomination of individuals to serve on the Board of Directors; rather the full Board of Directors fulfills this function. Applying the NASDAQ committee independence standards with respect to all of the directors of the Company, Dr. Garreau and Mr. Iversen are not independent directors .

The ~~Company~~Compensation ~~has~~Committee ~~adopted~~of the ~~ORBIT/FR,~~Board ~~Inc.~~of ~~Employee~~Directors, ~~Ethics~~subject ~~Policy~~to ~~that~~the ~~applies~~approval toof ~~all~~the Board of ~~its officers~~Directors, ~~and~~determines ~~employees.~~the Ifcompensation of the Company’s ~~makes~~executive ~~any~~officers ~~amendment~~and tooversees athe ~~provision~~administration of ~~the~~executive ~~Employee~~compensation ~~Ethics Policy~~programs. ~~that~~The ~~applies~~Compensation toCommittee ~~the~~is ~~Company’s~~comprised ~~principal~~of ~~executive~~Mr. ~~officer~~Garreau, ~~principal~~Mr. ~~financial officer~~Merrill, ~~principal~~ ~~accounting~~Mr. ~~officer~~Boch orand ~~controller,~~Mr. orAnderson. ~~persons~~Mr. ~~performing similar functions~~Merrill, orMr. ~~grants~~Boch ~~any waiver~~and ~~from~~Mr. aAnderson ~~provision~~each of whom the ~~Employee~~Board ~~Ethics~~of ~~Policy~~Directors ~~that~~has ~~applies~~determined to ~~any such persons, any such amendment or waiver will~~ be ~~publicly disclosed as required by applicable law~~independent.

AThe ~~copy~~Audit ofCommittee ~~the~~recommends ~~ORBIT/FR~~outside accountants, ~~Inc.~~reviews ~~Employee~~the ~~Ethics~~results ~~Policy~~and ~~was~~scope ~~filed~~of ~~with~~ the ~~Securities~~annual ~~and Exchange Commission on March 30~~audit, ~~2004~~the asservices anprovided ~~exhibit~~by to the Company’s ~~Annual~~independent ~~Report~~auditors onand ~~Form~~the ~~10-K~~recommendations ~~for~~of the ~~fiscal~~ ~~year~~auditors ~~ended~~with ~~December 31,~~respect ~~2003,~~to ~~and~~the aCompany’s ~~copy~~accounting ofsystems ~~the~~and ~~Employee~~controls. ~~Ethics~~During ~~Policy~~2011, ~~will~~the beAudit ~~provided~~Committee ~~to any~~conducted ~~person~~six ~~without~~meetings. ~~charge,~~The ~~upon~~Audit ~~request,~~Committee byis ~~contacting~~comprised ~~the~~of ~~Company~~Mr. byMerrill, ~~mail~~Mr. atBoch ~~ORBIT/FR,~~and ~~Inc~~Mr. Anderson, ~~506 Prudential~~each ~~Road,~~of ~~Horsham,~~whom ~~Pennsylvania~~the ~~19044,~~Board orof byDirectors ~~phone~~has atdetermined ~~(215) 674-5100~~to be independent.

~~Director~~Audit ~~Independence~~ Committee Financial Expert

~~Our~~The Board of Directors ~~affirmatively~~has ~~determines~~determined ~~the~~that ~~independence~~Mr. ofMerrill ~~each~~is ~~director~~an ~~and~~“audit ~~nominee for~~committee ~~election~~financial ~~as a director using the standards set forth in rules promulgated by The NASDAQ Stock Market LLC(“NASDAQ~~expert”) ~~for~~within ~~determining~~ the ~~independence~~meaning of ~~a director, including~~ the ~~consideration~~rules of ~~any~~ ~~relationship which, in~~ the ~~opinion~~Securities of the Board, would interfere with the exercise of independent judgment in carrying out the director’s responsibilities as a member of the Board. During the Board’s annual review of director independence, the Board determined that each of Mr. Boch, Mr. Merrill and ~~Mr. Anderson~~Exchange ~~is an “independent” director~~Commission.

~~Information~~Stockholder ~~Regarding Corporate Governance~~ Nominations

~~Committees~~The Company has not adopted any procedures by which the holders of the Company’s securities may recommend nominees to the Company’s Board of Directors .

The Board of Directors maintains a standing Compensation Committee and Audit Committee. The Board of Directors does not maintain a standing committee regarding the nominations of individuals to serve on the Board of Directors; rather the full Board of Directors fulfills this function. The Company does not currently have a separately designated nominating committee, or a committee performing similar functions. Applying the NASDAQ committee independence standards with respect to all of the directors of the Company, Dr. Garreau and Mr. Iversen are not independent directors for purposes of their membership in a nominating committee, or a committee performing similar functions, were such a committee to be separately designated and created. 23

The Compensation Committee of the Board of Directors, subject to the approval of the Board of Directors, determines the compensation of the Company’s executive officers and oversees the administration of executive compensation programs. The Compensation Committee is comprised of Mr. Garreau, Mr. Merrill, Mr. Boch and Mr. Anderson. Mr. Merrill, Mr. Boch and Mr. Anderson each of whom the Board of Directors has determined to be independent. Index

~~The~~Item Audit Committee recommends outside accountants, reviews the results and scope of the annual audit, the services provided by the Company’s independent auditors and the recommendations of the auditors with respect to the Company’s accounting systems and controls11. Executive ~~During 201009, the Audit Committee conducted four meetings~~Compensation. ~~The Audit Committee is comprised of Mr. Merrill, Mr. Boch and Mr. Anderson, each of whom the Board of Directors has determined to be independent.~~

~~Audit Committee Financial Expert~~ Overview

~~The~~Compensation ~~Board of Directors has determined that Mr. Merrill is an “audit committee financial expert” within the meaning of the rules of the Securities and Exchange Commission.~~ Philosophy

~~Stockholder~~The ~~Nominations~~ Company’s compensation program generally is designed to motivate and reward our executive officers and other personnel responsible for attaining financial objectives that will contribute to the overall goal of enhancing stockholder value. In administering the program, the Compensation Committee assesses the performance of our business and our employees relative to those objectives. The Company’s compensation program generally provides incentives to achieve annual and longer term objectives. The principal elements of the compensation plan include base salary, cash bonus awards and stock awards in the form of grants of stock options. These elements generally are blended in order to provide compensation packages which provide competitive pay, reward the achievement of financial objectives and align the interests of our executive officers and other high level personnel with those of our stockholders.

~~The~~Compensation ~~Company has not adopted any procedures by which the holders of the Company’s securities may recommend nominees to the Company’s Board of Directors.~~ Program

24 Base Salary. Base salary levels for executive officers are determined annually. In setting base salaries for officers and employees, the Compensation Committee considers the experience of the individual, the scope and complexity of the position, our size and growth rate, profitability, and the compensation paid by our competitors. The Compensation Committee generally approves, based upon in appropriate circumstances the recommendations of the Company’s Chief Executive Officer, the base salaries that are paid to the Company’s executive officers other than its Chief Executive Officer whose base salary is approved by the Compensation Committee. Overall, the Compensation Committee believes that the base salaries of its executive officers are approximately competitive with median base salary levels for similar positions with our peer companies. The Compensation Committee approved no salary adjustments for Messrs. Iversen, Aubin and Campbell.

~~Table~~Bonuses. The Company’s executive officers are eligible to receive bonus awards designed to motivate them to attain short-term and longer-term corporate and individual management goals. Bonuses are based on the attainment of ~~Contents~~specific Company performance measures established by the Compensation Committee early in the fiscal year, and by the achievement of specified individual performance objectives and the degree to which each executive officer contributes to the overall success of the Company and the management team. The annual bonus is paid in cash in an amount reviewed and approved, in appropriate circumstances on the recommendation of Mr. Iversen, by the Compensation Committee and is ordinarily paid in the first quarter following the completion of each fiscal year. For the year ended December 31, 2011, no bonuses were awarded to Messrs. Iversen, Aubin and Campbell.

~~Item~~Stock 11Awards. ~~Executive~~To promote the Company’s long-term objectives, stock awards are made to officers and employees who are in a position to make a significant contribution to our long-term success. The stock awards are made to employees and consultants pursuant to our 1997 Stock Option Plan, in the form of qualified and nonqualified stock options with an exercise price of the market price of the Company’s common stock on the date of grant. The Compensation Committee has discretion to determine which employees and consultants will be granted stock options, the number of shares to be optioned and the terms and conditions of such options. The full Board of Directors conducts the administration of the option plan with respect to options granted to directors or to executive officers. Options currently outstanding generally vest over a five year period. In selecting recipients and the size of grants, the Compensation Committee considers various factors such as the potential of the recipient, the salary of the recipient and competitive factors affecting our ability to attract and retain employees, prior grants, a comparison of awards made to officers in comparable positions at similar companies and the performance of our business. The Company did not grant stock options to the named executive officers during the year ended December 31, 2011.

~~Overview~~ 24

~~Compensation Philosophy~~ Index

~~The~~Director Company’s compensation program generally is designed to motivate and reward our executive officers and other personnel responsible for attaining financial objectives that will contribute to the overall goal of enhancing stockholder value. In administering the program, the Compensation Committee assesses the performance of our business and our employees relative to those objectives. The Company’s compensation program generally provides incentives to achieve annual and longer term objectives. The principal elements of the compensation plan include base salary, cash bonus awards and stock awards in the form of grants of stock options. These elements generally are blended in order to provide compensation packages which provide competitive pay, reward the achievement of financial objectives and align the interests of our executive officers and other high level personnel with those of our stockholders.

~~Compensation~~The ~~Program~~ following table shows certain information with respect to the compensation of all directors of the Company for the year ended December 31, 2011.

Base Salary. Base salary levels for executive officers are determined annually. In setting base salaries for officers and employees, the Compensation Committee considers the experience of the individual, the scope and complexity of the position, our size and growth rate, profitability, and the compensation paid by our competitors. The Compensation Committee generally approves, based upon in appropriate circumstances the recommendations of the Company’s Chief Executive Officer, the base salaries that are paid to the Company’s executive officers other than its Chief Executive Officer whose base salary is approved by the Compensation Committee. Overall, the Compensation Committee believes that the base salaries of its executive officers are approximately competitive with median base salary levels for similar positions with our peer companies. The Compensation Committee approved salary adjustments in March 2010, effective April 1, 2011, ~~for~~DIRECTOR ~~Messrs. Iversen, Aubin~~COMPENSATION ~~and Campbell of $45,500, $2,971 and $4,088 respectively.~~ TABLE

Bonuses. The Company’s executive officers are eligible to receive bonus awards designed to motivate them to attain short-term and longer-term corporate and individual management goals. Bonuses are based on the attainment of specific Company performance measures established by the Compensation Committee early in the fiscal year, and by the achievement of specified individual performance objectives and the degree to which each executive officer contributes to the overall success of the Company and the management team. The annual bonus is paid in cash in an amount reviewed and approved, in appropriate circumstances on the recommendation of Mr. Iversen, by the Compensation Committee and is ordinarily paid in the first quarter following the completion of each fiscal year. For the year ended December 31, 2010, bonuses were awarded to Messrs. Iversen Aubin and Campbell of $24,536, $23,067 and $21,469, respectively. Mr. Aubin’s bonus is calculated at 0.2% of North America bookings for the year and one-third of that amount discretionary by the compensation committee

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)		Total ($)
Current Directors
Dr. Philippe Garreau		—		—		—
Per Iversen		—		—		—
Raymond Boch		1,250		—		1,250
Douglas Merrill		3,250		—		3,250
Eric Andersen		2,750		—		2,750

Stock Awards. To promote the Company’s long-term objectives, stock awards are made to officers and employees who are in a position to make a significant contribution to our long-term success. The stock awards are made to employees and consultants pursuant to our 1997 Stock Option Plan, in the form of qualified and nonqualified stock options with a exercise price of the market price of the Company’s common stock on the date of grant. The Compensation Committee has discretion to determine which employees and consultants will be granted stock options, the number of shares to be optioned and the terms and conditions of such options. The full Board of Directors ~~conducts~~not ~~the administration~~receiving ofcompensation ~~the~~as ~~option~~an ~~plan~~officer ~~with respect to options granted to directors~~ or toemployee ~~executive officers. Options currently outstanding generally vest over a five year period. In selecting recipients and the size~~ of ~~grants,~~ the ~~Compensation~~Company ~~Committee~~receive ~~considers~~$500 ~~various~~per ~~factors~~meeting ~~such~~attended ~~as the potential of the recipient, the salary of the recipient~~ and ~~competitive~~$250 ~~factors~~per ~~affecting~~meeting ~~our ability~~attended ~~to attract and retain employees, prior grants, a comparison of awards made to officers in comparable positions at similar companies and the performance of our business~~telephonically. ~~The Company did not grant stock options to the named executive officers during the year ended December 31, 2010.~~

25 Compensation Tables and Related Information

~~Table~~The following tables and footnotes set forth information, for the years ended December 31, 2011 and December 31, 2010, concerning compensation awarded to, earned by or paid to (i) the Company’s Chief Executive Officer, and (ii) each of ~~Contents~~the Company’s two (2) other most highly compensated executive officers for the years ended December 31, 2011 and December 31, 2009 (the “Named Executive Officers”).

~~Director~~Summary Compensation Table

The following table shows certain information with respect to the compensation of all directors of the Company for the year ended December 31, 2010.


Name and						Option		All Other
Principal		Salary		Bonus		Awards		Compensation		Total
Position	Year	($)		($)		($)(1)		($)(2)		($)
Per Iversen	2011		201,594		—		—		12,442		214,036
Chief Executive Officer (Principal Executive Officer)	2010		155,798		24,536		—		7,707		188,041
John Aubin	2011		150,727		—		3,267		3,264		157,258
Vice President Chief Technology Officer	2010		149,541		23,067		5,600		2,956		181,164
William Campbell	2011		139,261		—		3,267		756		143,284
Vice President, Engineering and Program Management	2010		135,212		21,469		5,600		676		162,957

~~2010 DIRECTOR COMPENSATION TABLE~~ ____________

	Fees Earned or		Option
	Paid in Cash		Awards		Total
Name	($)		($)		($)
Current Directors
Dr. Philippe Garreau		—		—		—
Per Iversen		—		—		—
Raymond Boch		1,750		—		1,750
Douglas Merrill		2,750		—		2,750
Eric Andersen		2,750		—		2,750

(1)

Represents the grant date fair value of the option awards calculated in accordance with the Financial Accounting Standards Board standard on “Stock Compensation”. The valuation assumptions used for the calculation are as follows: expected life of 7 years; volatility of 7.74%; dividends of zero; and a risk free interest rate of 5.5%.

~~Directors~~(2) ~~not~~Represents ~~receiving~~contributions ~~compensation~~under asthe anCompany’s ~~officer~~401(k) orPlan. ~~employee~~In ofaddition, ~~the~~Mr. ~~Company~~Iversen ~~receive~~received $~~500~~9,750 ~~per meeting~~in ~~attended~~compensation ~~and~~for ~~$250~~the ~~per~~personal ~~meeting~~use ~~attended~~of ~~telephonically~~a Company car.

~~Compensation~~Outstanding ~~Tables~~Equity ~~and~~Awards ~~Related~~at ~~Information~~ Fiscal Year-End

The following tables and footnotes set forth information, for the years ended December 31, 2010 and December 31, 2009, concerning compensation awarded to, earned by or paid to (i) the Company’s Chief Executive Officer, and (ii) each of the Company’s two (2) other most highly compensated executive officers for the years ended December 31, 2009 and December 31, 2008 (the “Named Executive Officers”).

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date
Per Iversen		—		—		—		—
John Aubin		20,000		—		3.00	3/5/12
		15,000		—		1.95	7/9/17
William Campbell		15,000		—		3.00	11/25/12
		15,000		—		1.95	7/9/17

~~Summary Compensation Table~~ 25

Name and						Option		All Other
Principal		Salary		Bonus		Awards		Compensation		Total
Position	Year	($)		($)		($)(1)		($)(2)		($)
Per Iversen	2010		155,798		24,536		—		7,707		188,041
Chief Executive Officer (Principal Executive Officer)	2009		158,285		—		—		7,738		166,023
John Aubin	2010		149,541		23,067		5,600		2,956		181,164
Vice President Chief Technology Officer	2009		161,716		25,000		5,600		2,784		195,100
William Campbell	2010		135,212		21,469		5,600		676		162,957
Vice President, Engineering and Program Management	2009		136,214		35,000		5,600		681		177,495

Index

(1)		Represents the amount recognized for financial statement reporting purposes for the year ended December 31, 2010 in accordance with the FASB standard on “Stock Compensation”. The valuation assumptions used for the calculation are as follows: expected life of 7 years; volatility of 7.74%; dividends of zero; and a risk free interest rate of 5.5%.
(2)		Represents contributions under the Company’s 401(k) Plan. In addition, Mr. Iversen received $5,688 in compensation for the personal use of a Company car.

Employment Agreements

~~Outstanding~~Effective ~~Equity~~June ~~Awards~~2, at2008 ~~Fiscal~~and ~~Year~~executed on December 16, 2008, the Company entered into an employment agreement with Per Iversen, pursuant to which Mr. Iversen was named President and Chief Executive Officer of the Company. The agreement calls for Mr. Iversen to receive an initial base salary of $150,000, and provides that Mr. Iversen may be entitled to an annual bonus as determined by the Compensation Committee of the Company’s Board of Directors. In addition, the Board of Directors approved Mr. Iversen’s use of the company vehicle previously driven by the Company’s former CEO. Mr. Iversen’s employment agreement may be terminated by the Company for cause, which is defined as the material breach of the employment agreement by Mr. Iversen or if Mr. Iversen commits a material act of dishonesty or a material breach of trust or a fiduciary obligation with respect to the Company. Under the employment agreement, Mr. Iversen is subject to certain non-~~End~~ disclosure, non-solicitation and non-competitive covenants.

Option Awards

Number of

Securities

Underlying

Unexercised

Option

Options

Exercise

Option

(#)

Price

Expiration

Name

Exercisable

Unexercisable

($)

Date

Per Iversen

—

John Aubin

20,000

—

3.00

3/5/12

11,250

3,750

1.95

7/9/17

William Campbell

15,000

—

3.00

11/25/12

11,250

3,750

1.95

7/9/17

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

26 The following table sets forth, as of March 30, 2012, certain information with regard to beneficial ownership (as determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of outstanding shares of the Company’s Common Stock by (i) each person known by the Company to beneficially own five percent (5%) or more of the outstanding shares of the Company’s Common Stock, (ii) each director and Named Executive Officer (as defined below) individually, and (iii) all executive officers and directors of the Company as a group. Unless otherwise indicated, the address of each of the persons named in the following table is c/o Orbit/FR, Inc., 506 Prudential Road, Horsham, Pennsylvania 19044.

Name and Address of Beneficial Owner	Total Number of Shares of Common Stock Beneficial Owned (1)		Percentage of Class of Common Stock Beneficially Owned (1)
Five Percent (5%) or more Beneficial Owners Microwave Vision, SA 17, Avenue de Norvege 91 953 Coutaboeuf-France		3,700,000		61.8	%
Wellington Trust Company (2) c/o Wellington Management Company, LLP 280 Congress Street Boston, MA 02210		346,988		5.8	%
Directors Dr. Philippe Garreau (3) 17, Avenue de Norvege 91 953 Coutaboeuf-France		3,700,000		61.8	%
Raymond Boch Douglas Merrill		—		—
Eric Anderson		—		—
Named Executive Officers		—		—
Per Iversen		—		—
John Aubin (4)		35,000		*
William Campbell (5)		30,000		*
All executive officers and directors as a group (11 persons)		3,830,750		62.2	%

~~Employment Agreement 2~~ ____________

~~Effective~~* Less ~~June 2,~~than ~~2008~~1% ~~and executed on December 16, 2008, the Company entered into an employment agreement with Per Iversen, pursuant to which Mr. Iversen was named President and Chief Executive Officer~~ of the ~~Company.~~outstanding ~~The~~Common ~~agreement calls for Mr~~Stock. Iversen to receive an initial base salary of $150,000, and provides that Mr. Iversen may be entitled to an annual bonus as determined by the Compensation Committee of the Company’s Board of Directors. In addition, the Board of Directors approved Mr. Iversen’s use of the company vehicle previously driven by the Company’s former CEO. Mr. Iversen’s employment agreement may be terminated by the Company for cause, which is defined as the material breach of the employment agreement by Mr. Iversen or if Mr. Iversen commits a material act of dishonesty or a material breach of trust or a fiduciary obligation with respect to the Company. Under the employment agreement, Mr. Iversen is subject to certain non-disclosure, non-solicitation and non-competitive covenants.

~~Item~~(1) ~~12.~~The ~~Security~~securities ~~Ownership~~“beneficially owned” by an individual are determined in accordance with the definition of ~~Certain~~“beneficial ~~Beneficial~~ownership” ~~Owners~~set forth in the regulations of the United States Securities and ~~Management~~Exchange Commission (the “SEC”). Accordingly, they may include securities owned by or for, among others, the spouse and/or ~~Related~~minor ~~Stockholder~~children ~~Matters~~of the individual and any other relative who has the same home as such individual, as well as other securities as to which the individual has or shares voting or investment power or has the right to acquire under outstanding stock options within 60 days of March 30, 2012. Beneficial ownership may be disclaimed as to certain of the securities.

~~The~~(2) ~~following~~Based ~~table~~on ~~sets forth, as of March 30, 2011, certain~~ information ~~with~~set ~~regard~~forth ~~to beneficial ownership (as determined~~ in ~~accordance with Rule 13d-3 promulgated under~~ the ~~Securities Exchange~~Schedule ~~Act~~13G offiled ~~1934, as amended) of outstanding shares of the Company’s Common Stock~~ by ~~(i) each person~~Wellington ~~known~~Trust ~~by the~~ Company towith ~~beneficially own five percent (5%) or more of~~ the ~~outstanding~~Securities ~~shares of the Company’s Common Stock, (ii) each director~~ and ~~Named~~Exchange ~~Executive~~Commission ~~Officer~~on ~~(as~~February ~~defined below) individually~~14, ~~and (iii) all executive officers and directors of the Company as a group~~2012. ~~Unless otherwise indicated, the address of each of the persons named in the following table is c/o Orbit/FR, Inc., 506 Prudential Road, Horsham, Pennsylvania 19044.~~

			Percentage of
	Total Number of		Class of
	Shares of		Common
	Common		Stock
	Stock Beneficial		Beneficially
Name and Address of Beneficial Owner	Owned (1)		Owned (1)
Five Percent (5%) or more Beneficial Owners
Microwave Vision, SA 17, Avenue de Norvege 91 953 Coutaboeuf-France		3,700,000		61.8	%
Wellington Trust Company (2) c/o Wellington Management Company, LLP 280 Congress Street Boston, MA 02210		310,900		5.1	%
Directors
Dr. Philippe Garreau (3) 17, Avenue de Norvege 91 953 Coutaboeuf-France		3,700,000		61.8	%
Raymond Boch
Douglas Merrill		—		—
Eric Anderson		—		—
Named Executive Officers		—		—
Per Iversen		—		—
John Aubin (4)		31,250		*
William Campbell (5)		26,250		*
All executive officers and directors as a group (11 persons)		3,849,600		62.4	%

(3)	Represents 3,700,000 shares held by Microwave Vision, Dr. Garreau serves as the President and CEO of Microwave Vision.

*		Less than 1% of the outstanding Common Stock.
(1)		The securities “beneficially owned” by an individual are determined in accordance with the definition of “beneficial ownership” set forth in the regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they may include securities owned by or for, among others, the spouse and/or minor children of the individual and any other relative who has the same home as such individual, as well as other securities as to which the individual has or shares voting or investment power or has the right to acquire under outstanding stock options within 60 days of March 30, 2011. Beneficial ownership may be disclaimed as to certain of the securities.
(2)		Based on information set forth in the Schedule 13G filed by Wellington Trust Company with the Securities and Exchange Commission on February 14, 2011.
(3)		Represents 3,700,000 shares held by Microwave Vision, Dr. Garreau serves as the President and CEO of Microwave Vision.
(4)		Represents 31,250 shares of Common Stock issuable upon the exercise of options granted to Mr. Aubin.
(5)		Represents 26,250 shares of Common Stock issuable upon the exercise of options granted to Mr. Campbell.

(4)	Represents 35,000 shares of Common Stock issuable upon the exercise of options granted to Mr. Aubin.

27 (5) Represents 30,000 shares of Common Stock issuable upon the exercise of options granted to Mr. Campbell.

~~Table of Contents~~26

~~Item 13. Certain Relationships and Related Transactions, and Director Independence.~~Index

~~Review,~~EQUITY ~~Approval~~COMPENSATION orPLAN ~~Ratification of Transactions with Related Persons~~ INFORMATION

The ~~Board~~following oftable ~~Directors~~sets ~~has~~forth ~~adopted~~information, aas ~~policy~~of ~~regarding~~ the ~~review~~end ~~and approval~~ of ~~transactions with related persons, which provides that certain transactions in which~~ the ~~Company~~fiscal isyear aended ~~party~~December ~~must be~~31, ~~approved by (i) the Audit Committee~~2011, ~~and~~with ~~(ii)~~ respect to ~~the extent such transaction involves~~ compensation, ~~also~~plans byunder ~~the Compensation Committee. Those transactions that require review and approval include transactions to~~ which ~~any executive officer, or board member or board member nominee, or any immediate family member or affiliate of any of~~ the ~~foregoing,~~Company is aauthorized ~~party with the Company. Types of transactions excluded by the policy include transactions generally available~~ to ~~all~~ ofissue ~~our~~shares ~~employees and transactions involving solely matters~~ of ~~executive~~Common ~~compensation, which transactions need only to be approved by our compensation committee~~Stock.

Transactions subject to review under this policy may proceed if the Audit Committee finds that the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, and, to the extent they involve compensation, if they are also approved by the Compensation Committee.

Plan Category	Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in 1st column)
Equity compensation plan(s) approved by security holders (1)		204,600	$	2.27		995,400
Equity compensation plan(s) not approved by security holders		—		—		—
Total		204,600	$	2.27		995,400

~~As of December 31, 2010 Microwave Vision owned 3.7 million shares, representing approximately 61.8% of the outstanding shares, of the Company’s common stock.~~ ____________

~~Transactions~~(1) ~~with~~This ~~Related~~plan ~~Persons~~consists ~~during~~of ~~Fiscal~~the ~~Year~~Orbit/FR, ~~2010~~ Inc. 1997 Stock Option Plan.

~~Orbit-Alchut~~Item ~~Technologies, Ltd., an Israeli publicly traded corporation controlled approximately 61.8% of the Company’s stock until the sale of that stock to Satimo, S.A. on May~~ 13~~, 2008 (“Satimo”)~~. OnCertain ~~June 30,~~Relationships ~~2009, Microwave Vision acquired the 3.7 million common shares of the Company through a reorganization involving its wholly owned subsidiary, Satimo. Included in sales~~ and ~~cost~~Related ~~of revenues for the year ended December 31~~Transactions, ~~2010 are approximately $2.3 million~~ and ~~$423,000,~~ ~~respectively,~~Director ~~relating to sales to and purchases from Microwave Vision~~Independence. ~~Included in sales and cost of revenues for the year ended December 31, 2009 are approximately $588,000 and $271,000, respectively, relating to sales to and purchases from Microwave Vision.~~

~~On August 14~~Review, ~~2009,~~Approval ~~the~~or ~~Company~~Ratification ~~entered into an Assistance and Provision~~ of ~~Services~~Transactions ~~Agreement (the “Services Agreement”)~~ with ~~Microwave~~Related Vision and several subsidiaries of Microwave Vision, including Satimo. Pursuant to the Services Agreement, Microwave Vision agreed to provide management, operational, sales and marketing, legal, technical and other services to the Company, Satimo and Microwave Vision’s other direct and indirect Subsidiaries (collectively, the “Subsidiaries”). In consideration thereof, the Company, Satimo and each of the other Subsidiaries agreed to pay Microwave Vision a fee to be determined as of the start of each calendar year, commencing on January 1, 2009, based on the projected gross margins of each Subsidiary for that year subject to adjustment at year end based on actual results of operations for that year. In addition, the Company agreed to pay Microwave Vision an additional fee of 1% of its gross sales in consideration of the right to use the name “Microwave Vision” in the Company’s sales and marketing activities. As a result of the implementation of the Services Agreement effective as of January 1, 2009, the Company recorded approximately $1.7 million and $1.5 million respectively in expenses related to the Services Agreement for the years ended December 31, 2010 and 2009. As a result of the year-end adjustment, the amount of expense charged for the quarters ended December 31, 2010 and 2009 were approximately $657,000 and $588,000 or $315,000 and $271,000 respectively, greater than the quarterly charges accrued by the Company based upon budget. Persons

~~Item~~The 14Board of Directors has adopted a policy regarding the review and approval of transactions with related persons, which provides that certain transactions in which the Company is a party must be approved by (i) the Audit Committee, and (ii) to the extent such transaction involves compensation, also by the Compensation Committee. ~~Principal~~Those ~~Accountant~~transactions ~~Fees~~that require review and ~~Services~~approval include transactions to which any executive officer, or board member or board member nominee, or any immediate family member or affiliate of any of the foregoing, is a party with the Company. Types of transactions excluded by the policy include transactions generally available to all of our employees and transactions involving solely matters of executive compensation, which transactions need only to be approved by our compensation committee.

~~Accountant~~Transactions ~~Fees~~ subject to review under this policy may proceed if the Audit Committee finds that the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, and, to the extent they involve compensation, if they are also approved by the Compensation Committee.

~~The~~As ~~following~~of ~~table~~December ~~presents~~31, ~~fees~~2011 ~~for~~Microwave ~~professional~~Vision ~~services~~owned ~~rendered~~3.7 inmillion ~~the United States by Cornick~~shares, ~~Garber~~representing &approximately ~~Sandler,~~61.8% ~~LLP~~of ~~and~~the inoutstanding ~~Israel~~shares, ~~Ziv Haft for the audit~~ of the Company’s ~~annual financial~~common ~~statements, the review of the interim financial statements the preparation of its tax returns, and fees for consulting and other professional services~~stock.

	2010		2009
Audit Fees	$	166,000	$	168,000
Audit-Related Fees		47,000		66,000
Tax Fees		27,000		19,000
All Other Fees		—		4,000

Transactions with Related Persons during Fiscal Year 2011

~~All~~Orbit-Alchut ~~other~~Technologies, ~~fees~~Ltd., ~~relate~~an Israeli publicly traded corporation controlled approximately 61.8% of the Company’s stock until the sale of that stock to ~~work~~Satimo, ~~performed~~S.A. ~~under~~on ~~Sarbanes-Oxley~~May ~~Section 404~~13, ~~compliance~~ 2008 (“Satimo”). On June 30, 2009, Microwave Vision acquired the 3.7 million common shares of the Company through a reorganization involving its wholly owned subsidiary, Satimo. Included in sales and cost of revenues for the year ended December 31, 2011 are approximately $2.4 million and $0.9 million, respectively, relating to sales to and purchases from Microwave Vision. Included in sales and cost of revenues for the year ended December 31, 2010 are approximately $2.3 million and $0.4 million, respectively, relating to sales to and purchases from Microwave Vision.

28 On August 14, 2009, the Company entered into an Assistance and Provision of Services Agreement (the “Services Agreement”) with Microwave Vision and several subsidiaries of Microwave Vision, including Satimo. Pursuant to the Services Agreement, Microwave Vision agreed to provide management, operational, sales and marketing, legal, technical and other services to the Company, Satimo and Microwave Vision’s other direct and indirect Subsidiaries (collectively, the “Subsidiaries”). In consideration thereof, the Company, Satimo and each of the other Subsidiaries agreed to pay Microwave Vision a fee to be determined as of the start of each calendar year, commencing on January 1, 2009, based on the projected gross margins of each Subsidiary for that year subject to adjustment at year end based on actual results of operations for that year.. In addition, the Company agreed to pay Microwave Vision an additional fee of 1% of its gross sales in consideration of the right to use the name “Microwave Vision” in the Company’s sales and marketing activities. The Company recorded approximately $1.2 million and $1.7 million respectively in expenses related to the Services Agreement for the years ended December 31, 2011 and 2010.

~~Table of Contents~~27

~~Audit Committee Pre-Approval Policies and Procedures~~ Index

~~The~~Item ~~Company’s Audit Committee policies and procedures require the pre-approval by the Audit Committee of all fees paid to, and all services performed by, the Company’s independent accounting firm~~14. ~~The~~Principal ~~Audit~~Accountant ~~Committee~~Fees ~~approves the proposed services, including the nature, type,~~ and ~~scope of services contemplated and the related fees, to be rendered by the Company’s independent accounting firm during the year~~Services. In addition, Audit Committee pre-approval is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee.

~~Pursuant~~Accountant to the Sarbanes-Oxley Act of 2002, the fees and services provided as noted in the table above were authorized and approved by the Audit Committee in compliance with the pre-approval policies and procedures described herein. Fees

~~PART~~The IV following table presents fees for professional services rendered in the United States by Cornick, Garber & Sandler, LLP and in Israel, by BDO Ziv Haft for the audit of the Company’s annual financial statements, the review of the interim financial statements the preparation of its income tax returns, and fees for consulting and other professional services.

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE

	2011		2010
Audit Fees	$	182,000	$	166,000
Audit-Related Fees		19,000		47,000
Tax Fees		19,000		27,000
All Other Fees	–			4,000

~~(a)(1)~~All ~~Consolidated~~other ~~Financial~~fees ~~Statements~~ relate to work performed under Sarbanes-Oxley Section 404 compliance

Report of Independent Registered Public Accounting Firm			33
Report of Independent Registered Public Accounting Firm to the Shareholders of Orbit/FR Engineering, LTD.			34
Consolidated Balance Sheets at December 31, 2010 and 2009			35
Consolidated Statements of Operations for the years ended December 31, 2010 and 2009			36
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2010 and 2009			37
Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009			38
Notes to Consolidated Financial Statements			39

Audit Committee Pre-Approval Policies and Procedures

~~(a)(3)~~The ~~Exhibits~~ Company’s Audit Committee policies and procedures require the pre-approval by the Audit Committee of all fees paid to, and all services performed by, the Company’s independent accounting firms. The Audit Committee approves the proposed services, including the nature, type, and scope of services contemplated and the related fees, to be rendered by the Company’s independent accounting firms during the year. In addition, Audit Committee pre-approval is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee.

~~The~~Pursuant ~~exhibits~~to ~~filed~~the asSarbanes-Oxley ~~part~~Act of ~~this~~2002, ~~report~~the ~~are~~fees ~~listed~~and ~~under~~services ~~exhibits~~provided as ~~subsection~~noted ~~(c) of~~in ~~this Item 15~~the table above were authorized and approved by the Audit Committee in compliance with the pre-approval policies and procedures described herein.

~~(b) Exhibits~~ PART IV

3.1		Amended and Restated Certificate of Incorporation of the Company. (2)
3.2		Bylaws of the Company. (7)
4.1		Specimen Common Stock Certificate of the Company. (2)
4.2		Citizens Bank Term Note, dated December 13, 2010, in the aggregate principal amount of $250,000.
4.3		Citizens Bank Revolving Demand Note, dated December 13, 2010, in the aggregate principal amount of $2,250,000.
10.1	*	Employment Agreement dated January 1, 1997 by and between the Company and Moshe Pinkasy. (1)
10.2		1997 Equity Incentive Plan. (1)
10.3		ORBIT/FR Inc. non-debarment agreement dated February 15, 2000 (4)

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE

29 (a)(1) Consolidated Financial Statements

~~Table~~Independent ofAuditors’ ~~Contents~~Report

10.4		Consent Agreement. (8)
10.5	*	Employment Agreement dated December 16, 2008 by and between the Company and Per Iversen. (9)
10.6		Services Agreement dated August 14, 2009 among the Company, Microwave Vision Group, S.A. and the other parties thereto. (10)
10.7		Loan Agreement, dated December 13, 2010 by and between the Company and Citizens Bank of Pennsylvania (Equipment Line of Credit).
10.8		Security Agreement, dated December 13, 2010, by and between the Company and Citizens Bank of Pennsylvania (Equipment Line of Credit).
10.9		Loan Agreement, dated December 13, 2010, by and between the Company and Citizens Bank of Pennsylvania (Revolving Credit Facility).
10.10		Security Agreement, dated December 13, 2010, by and between the Company and Citizens Bank of Pennsylvania (Revolving Credit Facility).
14.1		Employee Ethics Policy. (6)
21.1		Subsidiaries of the Registrant. (3)
23.1		Consent of Cornick, Garber & Sandler, LLP.
23.2		Consent of Ziv Haft Certified Public Accountants (Isr.).
24.1		Power of Attorney (included on signature page).
31.1		Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003, of Per Iversen, President and Chief Executive Officer.
31.2		Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003, of Relland Winand, Chief Financial Officer.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003, of Per Iversen, President and Chief Executive Officer
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003, of Relland Winand, Chief Financial Officer.

Auditors’ Report to the Shareholders of ORBIT/FR Engineering, LTD.

30 Consolidated Balance Sheets at December 31, 2011 and 2010

~~Table~~Consolidated Statements of ~~Contents~~Operations for the years ended December 31, 2011 and 2010

*		Management contract, compensatory plan or arrangement
(1)		Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-25015), filed with the Commission on April 11, 1997
(2)		Incorporated by reference to Amendment 1 of the Company’s Registration Statement on Form S-1 (File No. 333-25015), filed with the Commission on May 19, 1997
(3)		Incorporated by reference to Amendment 2 of the Company’s Registration Statement on Form S-1 (File No. 333-25015), filed with the Commission on June 5, 1997
(4)		Incorporated by reference to Company’s Annual Report on Form 10-K filed on March 30, 2001
(5)		Incorporated by reference to Company’s Annual Report on Form 10-K filed on March 31, 2003
(6)		Incorporated by reference to Company’s Annual Report on Form 10-K filed on March 30, 2004
(7)		Incorporated by reference to Company’s Quarterly Report on Form 8-K filed on March 26, 2007
(8)		Incorporated by reference to Company’s Annual Report on Form 10-K filed on March 29, 2006
(9)		Incorporated by reference to Company’s Annual Report on Form 10-K filed on April 15, 2009
(10)		Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on August 19, 2009

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2011 and 2010

Consolidated Statements of Cash Flows for the years ended December 31 , 2011 and 2010

~~Table~~Notes ofto ~~Contents~~Consolidated Financial Statements

~~ORBIT/FR, Inc.~~ (a)(3) Exhibits

~~SIGNATURES~~ The exhibits filed as part of this report are listed under exhibits as subsection (c) of this Item 15.

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 28

	ORBIT/FR, Inc
Date: March 30, 2011	/s/ Philippe Garreau
	Philippe Garreau
	Chairman of the Board

Index

~~KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and~~(b) Exhibits appoints Philippe Garreau and each of them, his true and lawful attorney-in-fact and agent with full power of substitution or resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documentation in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the 30th day of March 2011.

3.1		Amended and Restated Certificate of Incorporation of the Company. (2)

3.2		Bylaws of the Company. (7)

4.1		Specimen Common Stock Certificate of the Company. (2)

4.2		Citizens Bank Term Note, dated December 13, 2010 in the aggregate principal amount of $250,000.

4.3		Citizens Bank Revolving Demand Note, dated December 13, 2010 in the aggregate principal amount of $2,250,000.

10.1	*	Employment Agreement dated January 1, 1997 by and between the Company and Moshe Pinkasy. (1)

10.2		1997 Equity Incentive Plan. (1)

10.3		ORBIT/FR Inc. non-debarment agreement dated February 15, 2000 (4)

10.4		Consent Agreement. (8)

10.5	*	Employment Agreement dated December 16, 2008 by and between the Company and Per Iversen. (9)

10.6		Services Agreement dated August 14, 2009 among the Company, Microwave Vision Group, S.A. and the other parties thereto. (10)

10.7		Loan Agreement Dated December 13, 2010 by and between the Company and Citizens Bank of Pennsylvania (Equipment Line of Credit).

10.8		Security Agreement Dated December 13, 2010 by and between the Company and Citizens Bank of Pennsylvania (Equipment Line of Credit).

10.9		Loan Agreement Dated December 13, 2010 by and between the Company and Citizens Bank of Pennsylvania (Revolving Credit Facility).

10.10		Security Agreement Dated December 13, 2010 by and between the Company and Citizens Bank of Pennsylvania (Revolving Credit Facility).

14.1		Employee Ethics Policy. (6)

21.1		Subsidiaries of the Registrant. (3)

23.1		Consent of Cornick, Garber & Sandler, LLP.

23.2		Consent of Ziv Haft Certified Public Accountants (Isr.).

24.1		Power of Attorney (included on signature page).

31.1		Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003, of Per Iversen, President and Chief Executive Officer.

31.2		Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003, of Relland Winand, Chief Financial Officer.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003, of Per Iversen, President and Chief Executive Officer

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003, of Relland Winand, Chief Financial Officer.

101.INS		Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Name Title /s/ Philippe Garreau Philippe Garreau Chairman of the Board /s/ Per Iversen Per Iversen Director, President and Chief Executive Officer (principal executive officer) /s/ Relland Winand Relland Winand Chief Financial Officer (principal accounting and financial officer) /s/ Raymond Boch Raymond Boch Director /s/ Douglas Merrill Douglas Merrill Director /s/ Eric Anderson Eric Anderson Director29

32 Index

~~Table of Contents~~____________

~~REPORT~~* OFManagement ~~INDEPENDENT~~contract, ~~REGISTERED~~compensatory ~~PUBLIC~~plan ~~ACCOUNTING~~or ~~FIRM~~ arrangement

To(1) Incorporated by reference to the ~~Stockholders~~Company’s ~~and Board~~Registration ofStatement ~~Directors Orbit/FR,~~on ~~Inc~~Form S-1 (File No. 333-25015), filed with the Commission on April 11, 1997

We(2) ~~have~~Incorporated ~~audited~~by ~~the~~reference ~~consolidated~~to ~~balance~~Amendment ~~sheets~~1 of ~~Orbit/FR, Inc. and Subsidiaries as of December 31, 2010 and December 31, 2009 and~~ the ~~related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the~~ Company’s ~~management.~~Registration ~~Our~~Statement ~~responsibility is to express an opinion~~ on ~~these consolidated~~Form ~~financial~~S-1 ~~statements~~(File ~~based on our audits~~No. ~~We did not audit the financial statements of Orbit/FR Engineering~~333-25015), ~~LTD.,~~filed awith ~~wholly owned subsidiary, which statements reflect total assets of $10,874,000 as of December 31, 2010 and $9,047,000 at December 31, 2009 and total revenues of $16,348,000 and $14,435,000 for~~ the ~~respective~~Commission ~~years~~on ~~then~~May ~~ended. Those statements were audited by other auditors whose reports have been furnished to us~~19, ~~and our opinion, insofar as it relates to the amounts included for Orbit/FR Engineering, LTD., is based solely on the reports of the other auditors.~~ 1997

~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board~~ (~~United States~~3). ~~Those~~Incorporated ~~standards~~by ~~require~~reference ~~that we plan and perform the audit~~ to ~~obtain reasonable~~Amendment ~~assurance~~2 ~~about whether the financial statements are free~~ of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the ~~circumstances, but not for the purpose of expressing an opinion on the effectiveness of the~~ Company’s ~~internal~~Registration ~~control over~~Statement ~~financial~~on ~~reporting.~~Form ~~Accordingly,~~S-1 we(File ~~express no such opinion~~No. ~~An audit also includes examining~~333-25015), onfiled awith ~~test basis, evidence supporting~~ the ~~amounts~~Commission ~~and~~on ~~disclosures~~June ~~in the financial statements~~5, 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 and the reports of the other auditors provide a reasonable basis for our opinion. 1997

In(4) ~~our~~Incorporated ~~opinion,~~by ~~based~~reference ~~on our audit and the reports of the other auditors, the consolidated financial statements referred~~ to ~~above~~Company’s ~~present~~Annual ~~fairly,~~Report inon ~~all~~Form ~~material~~10-K ~~respects,~~filed ~~the~~on ~~financial position~~March ~~of Orbit/FR~~30, Inc. and Subsidiaries as of December 31, 2010 and December 31, 2009 and the consolidated results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. 2001

/(5) Incorporated by reference to Company’s/ ~~CORNICK,~~Annual ~~GARBER~~Report &on ~~SANDLER~~Form 10-K filed on March 31, ~~LLP~~2003

(6) Incorporated by reference to Company’s Annual Report on Form 10-K filed on March 30, ~~2011 New York, NY~~ 2004

33 (7) Incorporated by reference to Company’s Quarterly Report on Form 8-K filed on March 26, 2007

~~Table~~(8) ofIncorporated ~~Contents~~by reference to Company’s Annual Report on Form 10-K filed on March 29, 2006

(~~LOGO~~9) Incorporated by reference to Company’s Annual Report on Form 10-K filed on April 15, 2009

~~REPORT~~(10) OFIncorporated ~~INDEPENDENT~~by ~~REGISTERED~~reference ~~PUBLIC~~to ~~ACCOUNTING~~the ~~FIRM~~ Company’s Quarterly Report on Form 10-Q filed on August 19, 2009

~~To the Board of Directors and Shareholders of~~ 30

~~ORBIT/FR ENGINEERING, LTD.~~ Index

~~We have audited the accompanying balance sheet of Orbit~~ ORBIT/~~Fr Engineering~~FR, ~~Ltd~~Inc. (“the Company”) as of December 31, 2010 and 2009 and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion. SIGNATURES

InPursuant ~~our opinion, the financial statements referred~~ to ~~above present fairly, in all material respects,~~ the ~~financial~~requirements ~~position~~ of ~~Orbit/FR~~section ~~Engineering,~~13 ~~Ltd.~~or as15(d) of ~~December 31,~~ ~~2010~~the ~~and~~Securities ~~2009,~~Exchange ~~and~~Act ~~the results~~ of ~~its operations~~1934, ~~changes~~the inregistrant ~~equity and~~has ~~its~~duly ~~cash~~caused ~~flows~~this ~~for~~report ~~the~~to ~~years~~be ~~then~~signed ~~ended~~on inits ~~conformity~~behalf ~~with~~by ~~accounting principles generally accepted in~~ the ~~United~~undersigned ~~States~~thereunto ofduly ~~America~~authorized.

/s/ Ziv Haft. Certified Public Accountants (Isr.) BDO Member Firm

	ORBIT/FR, Inc

Date: April 9, 2012	/s/ Philippe Garreau
	Philippe Garreau
	Chairman of the Board

~~Tel~~KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Philippe Garreau and each of them, his true and lawful attorney-~~Aviv~~in-fact and agent with full power of substitution or resubstitution, ~~Israel March 28~~for him and in his name, ~~2011~~ place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documentation in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

~~(LOGO)~~ Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the 6th day of April 2012.

34 Name Title /s/ Philippe Garreau Chairman of the Board Philippe Garreau /s/ Per Iversen Director, President and Chief Executive Officer Per Iversen (principal executive officer) /s/ Relland Winand Chief Financial Officer Relland Winand (principal accounting and financial officer) /s/ Raymond Boch Director Raymond Boch /s/ Douglas Merrill Director Douglas Merrill /s/ Eric Anderson Director Eric Anderson

~~Table of Contents~~31

~~ORBIT/FR, Inc.~~ Index

~~CONSOLIDATED~~REPORT ~~BALANCE~~OF ~~SHEETS~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~(Amounts~~To inthe ~~thousands,~~Stockholders ~~except share data)~~and

	December 31,
	2010			2009
ASSETS
Current assets:
Cash and cash equivalents	$	2,400		$	1,622
Accounts receivable, less allowance of $90 and $67 in 2010 and 2009, respectively		5,693			9,207
Inventory		2,776			2,681
Costs and estimated earnings in excess of billings on uncompleted contracts		4,941			1,668
Income tax refunds receivable		655			542
Deferred income taxes		1,437			835
Other		745			277
Total current assets		18,647			16,832
Property and equipment, net		2,296			2,093
Deferred income taxes		688			887
Cost in excess of net assets acquired		301			301
Total assets	$	21,932		$	20,113
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,781		$	3,946
Accounts payable— ultimate parent		1,697			1,482
Accrued expenses		3,728			3,355
Short-term bank financing		—			250
Customer advances		75			13
Billings in excess of costs and estimated earnings on uncompleted contracts		2,117			2,813
Total liabilities, all current		11,398			11,859
Stockholders’ equity:
Preferred stock: $.01 par value:
Authorized shares—2,000,000 Issued and outstanding shares—none		—			—
Common stock: $.01 par value:
Authorized shares—10,000,000 Issued shares—6,084,473		61			61
Additional paid-in capital		16,500			16,460
Accumulated deficit		(5,727	)		(8,024	)
Accumulated other comprehensive (loss)- Foreign currency translation adjustment net of $32, tax benefit		(57	)		—
Treasury stock—82,700 shares in 2010 and 2009, at cost		(243	)		(243	)
Total stockholders’ equity		10,534			8,254
Total liabilities and stockholders’ equity	$	21,932		$	20,113

Board of Directors

~~See~~Orbit/FR, ~~accompanying notes~~Inc.

35 We have audited the consolidated balance sheets of Orbit/FR, Inc. and Subsidiaries as of December 31, 2011 and December 31, 2010 and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of Orbit/FR Engineering, LTD., a wholly owned subsidiary, which statements include assets of $12,401,000 as of December 31, 2011 and $9,576,000 at December 31, 2010 and revenues of $14,814,000 and $12,842,000 net of intercompany eliminations for the respective years then ended. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Orbit/FR Engineering, LTD., is based solely on the reports of the other auditors.

~~Table~~We conducted our audits in accordance with the standards of ~~Contents~~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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 and the reports of the other auditors provide a reasonable basis for our opinion.

~~ORBIT~~In our opinion, based on our audit and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Orbit/FR, Inc. and Subsidiaries as of December 31, 2011 and December 31, 2010 and the consolidated results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

~~CONSOLIDATED~~/s/ ~~STATEMENTS~~CORNICK, OFGARBER ~~OPERATIONS~~& SANDLER, LLP

~~(Amounts~~April ~~in thousands~~9, ~~except share and per share data)~~2012

	Years Ended December 31,
	2010			2009
Contract revenues	$	36,245		$	31,246
Cost of revenues		25,514			20,483
Gross profit		10,731			10,763
Operating expenses:
General and administrative		3,113			3,005
Sales and marketing		2,920			3,565
Sales, marketing, general and administrative-MVG		1,681			1,539
Research and development		1,253			1,308
(Gain) loss on disposal of assets		(109	)		167
Total operating expenses		8,858			9,584
Operating income		1,873			1,179
Other (loss), net		(73	)		(217	)
Income before income tax		1,800			962
Income tax (benefit)		(497	)		(508	)
Net income	$	2,297		$	1,470
Other comprehensive (loss)-Foreign currency translation adjustment, net of $32 tax benefit		(57	)		—
Total comprehensive income	$	2,240		$	1,470
Basic and diluted income per share	$	0.38		$	0.24
Weighted average number common shares — basic		6,001,773			6,001,583
Weighted average number common shares — diluted		6,029,701			6,001,583

New York, NY

~~See accompanying notes.~~ 32

36 Index

~~Table of Contents~~(LOGO)

~~ORBIT/FR,~~REPORT ~~Inc.~~ OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~CONSOLIDATED~~To ~~STATEMENTS~~the OFBoard ~~STOCKHOLDERS’~~of ~~EQUITY~~Directors and Shareholders of

~~(Shares~~ORBIT/FR ~~and~~ENGINEERING, ~~amounts in thousands)~~LTD.

					Additional					Accumulated								Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Treasury Stock					Stockholders’
	Shares		Amount		Capital		Deficit			(Loss)			Shares		Amount			Equity
Balance, January 1, 2009	$	6,084	$	61	$	16,383	$	(9,494	)	$	—		$	83	$	(243	)	$	6,707
Net income		—		—		—		1,470			—			—		—			1,470
Stock-based compensation		—		—		77		—			—			—		—			77
Balance, December 31, 2009		6,084	$	61	$	16,460	$	(8,024	)		—			83	$	(243	)	$	8,254
Net income								2,297											2,297
Stock-based compensation		—		—		40		—			—			—		—			40
Accumulated other comprehensive (loss) — foreign currency translation adjustment $32 net of tax benefit		—		—		—		—			(57	)		—		—			(57	)
Balance, December 31, 2010		6,084	$	61	$	16,500	$	(5,727	)	$	(57	)		83	$	(243	)	$	10,534

We have audited the accompanying balance sheet of Orbit/Fr Engineering, Ltd. (“the Company”) as of December 31, 2011 and 2010 and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

~~See~~We ~~accompanying~~conducted ~~notes~~our audit 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. The Company is not required to have, nor were we engaged to perform, an audit its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

37 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Orbit/FR Engineering, LTD. as of December 31, 2011 and 2010, and the results of its operations, changes in equity and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

~~Table~~/s/ ofZiv ~~Contents~~Haft. Certified Public Accountants (Isr.) BDO Member Firm

~~ORBIT/FR~~Tel-Aviv, ~~Inc.~~ Israel

~~CONSOLIDATED~~April ~~STATEMENTS~~9, ~~OF CASH FLOWS~~2012

(~~Amounts in thousands~~LOGO)

	Year Ended December 31,
	2010			2009
Cash flows from operating activities:
Net income	$	2,297		$	1,470
Adjustments to reconcile results of operations to net cash (used in) provided by operating activities:
Depreciation		525			399
(Gain) loss on disposal of fixed assets		(109	)		66
Stock-based compensation		40			77
Deferred income tax provision		(402	)		(508	)
Changes in operating assets and liabilities:
Accounts receivable		3,437			(1,547	)
Inventory		(103	)		(327	)
Costs and estimated earnings in excess of billings on uncompleted contracts		(3,282	)		(223	)
Income tax refunds receivable		(112	)		(102	)
Other current assets		(440	)		22
Accounts payable and accrued expenses		89			1,763
Accounts payable— ultimate parent		313			1,387
Customer advances		66			(663	)
Billings in excess of costs and estimated earnings on uncompleted contracts		(603	)		743
Net cash provided by operating activities		1,716			2,557
Cash flows from investing activities:
Insurance proceeds for replacement of property and equipment		134			—
Proceeds from sale of property and equipment		(764	)		(1,239	)
Net cash (used in) investing activities		(630	)		(1,239	)
Cash flows from financing activities
Proceeds from short term bank financing					1,050
Repayments of short term bank financing		(250	)		(2,267	)
Net cash (used in) financing activities		(250	)		(1,217	)
Effect of exchange rate changes on cash and cash equivalents		(58	)		—
Net increase in cash and cash equivalents		778			101
Cash and cash equivalents at beginning of year		1,622			1,521
Cash and cash equivalents at end of year	$	2,400		$	1,622
Supplemental disclosures of cash flow information:
Net cash paid during the year for income taxes	$	291		$	267
Net cash paid during the year for interest	$	7		$	15

~~See accompanying notes.~~ Index

38 ORBIT/FR, Inc.

~~Table~~CONSOLIDATED ofBALANCE ~~Contents~~SHEETS

~~ORBIT~~(Amounts /in FRthousands, ~~Inc.~~ except share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	3,266		$	2,400
Accounts receivable, less allowance of $76 in 2011 and $90 in 2010		6,709			5,693
Inventory		2,923			2,776
Costs and estimated earnings in excess of billings on uncompleted contracts		5,256			4,941
Income tax refunds receivable		694			655
Deferred income taxes		917			1,437
Other		277			745
Total current assets		20,042			18,647
Property and equipment, net		2,974			2,296
Deferred income taxes		933			688
Goodwill		301			301
Total assets	$	24,250		$	21,932
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,313		$	3,781
Accounts payable— ultimate parent		1,519			1,697
Accrued expenses		3,364			3,728
Short-term bank financing		500			—
Current portion of long-term debt		27			—
Customer advances		228			75
Billings in excess of costs and estimated earnings on uncompleted contracts		5,258			2,117
Total current liabilities		14,209			11,398

Long term debt (less current portion above)		106			—

Stockholders’ equity:
Preferred stock: $.01 par value:
Authorized shares—2,000,000
Issued and outstanding shares—none		—			—
Common stock: $.01 par value:
Authorized shares—10,000,000
Issued shares—6,084,473		61			61
Additional paid-in capital		16,529			16,500
Accumulated deficit		(6,279	)		(5,727	)
Accumulated other comprehensive (loss)- Foreign currency translation adjustment net of $42 in 2011 and $32 in 2010, income tax benefit		(133	)		(57	)
Treasury stock—82,700 shares in 2011 and 2010, at cost		(243	)		(243	)
Total stockholders’ equity		9,935			10,534
Total liabilities and stockholders’ equity	$	24,250		$	21,932

~~(Amounts~~See inaccompanying ~~thousands, except share and per share data)~~notes.

~~1. Summary of Significant Accounting Policies~~ 34

~~Ownership and Basis of Presentation~~ Index

ORBIT/FR, Inc. (the “Company”) was incorporated in Delaware on December 9, 1996, as a wholly-owned subsidiary of Orbit-Alchut Technologies, Ltd., an Israeli publicly traded corporation (hereinafter referred to as “Alchut”). On May 13, 2008, Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo Industries, SA (Satimo) and on June 30, 2009, as a result of a corporate reorganization, Satimo became a wholly owned subsidiary of Microwave Vision, SA (“Microwave Vision”) a newly created holding company which is publicly traded on the ALTERNEXT stock exchange. The Company develops, markets, and supports sophisticated automated microwave test and measurement systems for the wireless communications, satellite, automotive, and aerospace/defense industries and manufactures anechoic foam, a microwave absorbing material that is an integral component of microwave test and measurement systems. ORBIT/FR, Inc., a holding company, supports its worldwide customers through its subsidiaries ORBIT/FR Engineering, LTD (Israel), (hereinafter referred to as “Engineering”), ORBIT/FR Europe (Germany), Advanced ElectroMagnetics, Inc. (“AEMI”, San Diego, CA), and Orbit Advanced Technologies, Inc. and Flam and Russell, Inc. (Horsham, PA). The Company sells its products to customers throughout Asia, Europe and North and South America.

~~Principles~~CONSOLIDATED ofSTATEMENTS ~~Consolidation~~ OF OPERATIONS

~~The~~(Amounts ~~consolidated~~in ~~financial~~thousands, ~~statements~~except ~~include~~share ~~the accounts of the Company~~ and ~~its~~per ~~wholly-owned subsidiaries.~~share ~~All significant intercompany accounts and transactions of the Company and its wholly-owned subsidiaries have been eliminated in consolidation.~~ data)

Use of Estimates

	Years Ended December 31,
	2011			2010
Contract revenues	$	33,603		$	36,245
Cost of revenues		25,424			25,514
Gross profit		8,179			10,731
Operating expenses:
General and administrative		3,158			3,113
Sales and marketing		2,638			2,920
Sales, marketing, general and administrative-MVG		1,208			1,681
Research and development		1,242			1,253
Gain on disposal of assets		—			(109	)
Insurance proceeds		(132	)		—
Total operating expenses-net		8,114			8,858
Operating income		65			1,873
Other (loss), net		(122	)		(73	)
(Loss) income before income tax		(57	)		1,800
Income tax expense (benefit)		495			(497	)
Net (loss) income	$	(552	)	$	2,297
Other comprehensive (loss)
Foreign currency translation adjustment net of $42 and $32 income tax benefit	$	(76	)	$	(57	)
Total comprehensive (loss) income	$	(628	)	$	2,240
Basic and diluted (loss) income per share	$	(0.09	)	$	0.38
Weighted average number common shares — basic		6,001,773			6,001,773
Weighted average number common shares — diluted		6,001,773			6,029,701

~~The~~See preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts in the financial statements and accompanying notes. ~~Actual results could differ from those estimates.~~

~~Cash and Cash Equivalents~~ 35

~~The Company classifies as cash equivalents all highly liquid instruments with original maturities of three months or less at the time of purchase.~~ Index

~~Accounts~~ORBIT/FR, ~~Receivable~~ Inc.

~~The~~CONSOLIDATED ~~Company~~STATEMENTS ~~accounts~~OF ~~for~~STOCKHOLDERS’ potential losses in accounts receivable utilizing the allowance method. In reviewing aged receivables, management considers its knowledge of customers, historical losses and current economic conditions in establishing the allowance for doubtful accounts. EQUITY

~~Inventory~~ (Shares and amounts in thousands)

Inventory is stated at the lower of cost, determined on the first-in first out method, or market.

	Common Stock				Additional Paid-in		Accumulated			Accumulated Comprehensive			Treasury Stock					Total Stockholders’
	Shares		Amount		Capital		Deficit			(Loss)			Shares		Amount			Equity
Balance, January 1, 2010		6,084		61		16,460		(8,024	)		—			83		(243	)		8,254
Net income		—		—		—		2,297			—			—		—			2,297
Stock-based compensation		—		—		40		—			—			—		—			40
Accumulated other comprehensive (loss) – foreign currency translation adjustment net of $32 income tax benefit
											(57	)							(57	)
Balance, December 31, 2010		6,084	$	61	$	16,500	$	(5,727	)		(57	)		83	$	(243	)	$	10,534
Net (loss)								(552	)										(552	)
Stock-based compensation		—		—		29		—			—			—		—			29
Accumulated other comprehensive (loss) – foreign currency translation adjustment net of $42 income tax benefit											(76	)							(76	)
Balance, December 31, 2011		6,084	$	61	$	16,529	$	(6,279	)	$	(133	)		83	$	(243	)	$	9,935

39 See accompanying notes.

~~Table of Contents~~36

~~Property and Equipment~~ Index

~~Property~~ORBIT/FR, ~~and equipment are recorded at cost~~Inc. Depreciation is computed on accelerated methods for both financial reporting and income tax reporting purposes over the estimated useful lives as follows: office equipment — 5-7 years; lab equipment — 5 years; furniture and fixtures — 7 years; transportation equipment — 5 years; leasehold improvements — life of lease.

~~Cost~~CONSOLIDATED inSTATEMENTS ~~Excess~~OF ofCASH ~~Net Assets Acquired~~ FLOWS

~~Cost in excess of net assets acquired~~ (~~“goodwill”),~~Amounts ~~represents the excess of costs over the fair value of the net assets acquired~~ in ~~connection with the Company’s acquisition of Advanced ElectroMagnetics, Inc. (AEMI~~thousands) ~~in 1997.~~

The Company has tested the goodwill of AEMI for impairment at December 31, 2010 and 2009 using the present value of future cash flow valuation method. No adjustment for the value of goodwill was necessary.

	Year Ended December 31,
	2011			2010

Cash flows from operating activities:
Net (loss) income	$	(552	)	$	2,297
Adjustments to reconcile results of operations to net cash (used in) provided by operating activities:
Depreciation		602			525
Gain on disposal of fixed assets		—			(109	)
Stock-based compensation		28			41
Deferred income tax provision		274			(402	)
Changes in operating assets and liabilities:
Accounts receivable		(1,024	)		3,437
Inventory		(149	)		(103	)
Costs and estimated earnings in excess of billings on uncompleted contracts		(332	)		(3,282	)
Income tax refunds receivable		(40	)		(112	)
Other current assets		435			(440	)
Accounts payable and accrued expenses		(812	)		89
Accounts payable— ultimate parent		(276	)		313
Customer advances		155			65
Billings in excess of costs and estimated earnings on uncompleted contracts		3,151			(603	)
Net cash provided by operating activities		1,460			1,716
Cash flows from investing activities:
Proceeds from sale of property and equipment		—			134
Purchase of property and equipment		(1,284	)		(764	)
Net cash (used in) investing activities		(1,284	)		(630	)
Cash flows from financing activities
Proceeds from short-term bank financing		1,400			—
Repayments of short-term bank financing		(900	)		(250	)
Proceeds from long-term debt		143			—
Repayment of long-term debt		(10	)		—
Net cash provided by (used in) financing activities		633			(250	)
Effect of exchange rate changes on cash and cash equivalents		57			(58	)
Net increase in cash and cash equivalents		866			778
Cash and cash equivalents at beginning of year		2,400			1,622
Cash and cash equivalents at end of year	$	3,266		$	2,400
Supplemental disclosures of cash flow information:
Net cash paid during the year for income taxes	$	515		$	291
Net cash paid during the year for interest	$	21		$	7

~~Revenue~~See ~~and~~accompanying ~~Cost Recognition~~ notes.

The Company’s principal sources of contract revenues are from engineering and design services and the production of electro-mechanical equipment. Revenues from long-term fixed-price development contracts performed principally under the Company’s control are recognized on the percentage-of- completion method, measured by the percentage of costs incurred to date to estimated total costs for each contract when such costs can be reasonably estimated. Contract costs include all direct material, labor and subcontractor costs and those indirect costs related to contract performance such as indirect labor, supplies and tool costs. Selling, general and administrative costs are charged to expense as incurred. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined. Revenues recognized in excess of amounts billed are classified under current assets as costs and estimated earnings in excess of billings on uncompleted contracts. Amounts billed to customers in excess of revenues recognized to date are classified under current liabilities as billings in excess of costs and estimated earnings on uncompleted contracts. 37

~~Revenues from electro-mechanical equipment sold to customers which are not part of a larger contract are recognized when the contract is completed and the equipment is delivered.~~ Index

~~Research~~ORBIT ~~and~~/ ~~Development~~ FR, Inc.

~~Internally~~NOTES ~~funded~~TO ~~research~~CONSOLIDATED ~~and~~FINANCIAL development costs are charged to operations as incurred. Included in cost of revenues are customer-funded research and development costs of approximately $8 and $147 for the years ended December 31, 2010 and 2009, respectively. Other research and development costs are separately reflected in the Consolidated Statement of Operations. STATEMENTS

~~Concentrations~~(Amounts ofin ~~Credit~~thousands, ~~Risk~~except share and ~~Significant~~per ~~Customers~~ share data)

~~Financial~~1. ~~instruments,~~Summary ~~which potentially subject the Company to a concentration~~ of ~~credit risk,~~Significant ~~consist~~Accounting ~~principally of cash and accounts receivable.~~ Policies

~~The~~Ownership ~~Company maintains cash~~ and ~~cash~~Basis equivalents with various major commercial institutions in the U.S. and overseas. At December 31, 2010, cash balances that are either uninsured under the Federal Deposit Insurance Corporation coverage limit per financial institution, or are located overseas without such type of ~~insurance coverage, totaled approximately $1,979. The Company does not anticipate credit risk in connection with its concentration of cash.~~ Presentation

ToORBIT/FR, ~~reduce~~Inc. ~~credit~~(the ~~risk~~“Company”) ~~relating~~was toincorporated ~~the~~in ~~Company’s~~Delaware ~~sales~~on inDecember ~~the~~9, U1996, as a wholly-owned subsidiary of Orbit-Alchut Technologies, Ltd.S, an Israeli publicly traded corporation (hereinafter referred to as “Alchut”). ~~and~~On ~~overseas~~May 13, ~~the~~2008, ~~Company performs~~Alchut ~~ongoing~~sold ~~credit~~all ~~evaluations~~ of its ~~commercial~~3.7 ~~customers’~~million ~~financial~~shares ~~condition,~~of ~~but~~common ~~generally does~~stock ~~not~~of ~~require~~the ~~collateral~~Company ~~for~~to ~~government~~Satimo Industries, SA (Satimo) and ~~domestic~~on ~~commercial~~June ~~customers.~~30, ~~For~~2009, ~~certain~~as ~~foreign commercial~~a ~~customers~~result of a corporate reorganization, ~~the~~Satimo ~~Company~~became ~~generally~~a ~~requires~~wholly ~~irrevocable~~owned ~~letters~~subsidiary of ~~credit~~Microwave inVision, ~~the~~SA ~~amount~~(“Microwave of Vision”) a newly created holding company which is publicly traded on the ~~total~~ALTERNEXT ~~contract~~stock exchange. AtThe ~~December 31~~Company develops, ~~2010~~markets, ~~there~~and ~~were~~supports ~~twenty~~sophisticated ~~four~~automated ~~bank~~microwave ~~guarantees~~test inand ~~place~~measurement systems for ~~foreign~~ ~~customers~~the ~~with~~wireless communications, satellite, automotive, and aerospace/defense industries and manufactures anechoic foam, a microwave absorbing material that is an ~~aggregate~~integral ~~value~~component of ~~approximately~~microwave $4test and measurement systems. ORBIT/FR,~~655~~ Inc. ~~One~~, ~~customer~~a ~~accounted~~holding ~~for~~company, 10supports its worldwide customers through its subsidiaries ORBIT/FR Engineering, LTD (Israel), (hereinafter referred to as “Engineering”), ORBIT/FR Europe (Germany), Advanced ElectroMagnetics, Inc.6% of(“AEMI”, ~~the~~San Diego, CA), and Orbit Advanced Technologies, Inc. and Flam and Russell, Inc. (Horsham, PA). The Company’s ~~consolidated revenue~~sells ~~for~~its ~~the~~products ~~year~~to ~~ended~~customers ~~December~~throughout 31Asia, ~~2010~~Europe and North and South America.

40 Principles of Consolidation

~~Table~~The consolidated financial statements include the accounts of ~~Contents~~the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions of the Company and its wholly-owned subsidiaries have been eliminated in consolidation. The Company’s functional currency for the operations of its subsidiary in Israel is the U.S. dollar. The Company’s functional currency for the operation of its German subsidiary is the Euro. The translation of foreign subsidiaries’ financial statements denominated in a functional currency other than the U.S. dollar into U.S. dollars is performed at each balance sheet date as follows: The foreign currency statement of operations is translated at the average exchange rate in effect for the period. The balance sheet asset and liability accounts are translated at the period-end exchange rate. The resulting translation gain or loss is recorded as a separate component of stockholders’ equity. The change in the cumulative translation gains or losses from the preceding period is separately reported net of income tax effect, on the statement of operations under the caption “Other comprehensive income (loss) – foreign currency translation adjustment”, unless such change is considered immaterial (in which case it is included in foreign exchange transaction gains or losses).

~~Warranty~~Use ~~Expense~~ of Estimates

The ~~Company~~preparation ~~provides~~of ~~for~~financial ~~warranty~~statements ~~costs~~in onconformity ~~its~~with ~~products.~~accounting ~~Product~~principles ~~warranty~~generally ~~periods~~accepted ~~generally extend~~in ~~for~~the ~~one~~United ~~year~~States ~~from~~requires management to make estimates and assumptions that affect the ~~date~~amounts ofin ~~sale~~the financial statements and accompanying notes. ~~The~~Actual ~~warranty~~results ~~expense~~could isdiffer ~~not~~from ~~material~~those estimates.

~~Income~~Cash ~~Taxes~~ and Cash Equivalents

The Company ~~uses~~classifies ~~the~~as ~~liability~~cash ~~method~~equivalents toall ~~account~~highly ~~for~~liquid ~~income~~instruments ~~taxes.~~with ~~Accordingly,~~original ~~deferred income~~maturities ~~taxes~~of ~~reflect~~three ~~the~~months ~~net~~or ~~tax~~less ~~effect~~at ~~of temporary differences between~~ the ~~carrying~~time ~~amounts~~ of ~~assets~~ ~~and liabilities for financial reporting purposes and the amounts reportable for income tax purposes~~purchase. ~~The Company files a consolidated federal income tax return with its domestic subsidiaries and separate income tax returns in Israel and Germany for its foreign subsidiaries.~~

~~Foreign~~Accounts ~~Currency Translation~~ Receivable

The Company’s ~~functional~~accounts ~~currency~~ for ~~the~~potential ~~operations~~losses ~~of its subsidiary~~ in ~~Israel~~accounts isreceivable ~~the~~utilizing ~~U.S. dollar. The Company’s functional currency for~~ the ~~operations~~allowance ~~of its German subsidiary is the Euro~~method. ~~Foreign~~ ~~currency~~In ~~transaction~~reviewing ~~gains~~aged ~~and losses net~~receivables, ~~both~~management ~~realized~~considers ~~and~~its ~~unrealized,~~knowledge ~~are recognized currently in the consolidated statements~~ of ~~operations.~~customers, ~~Prior~~historical tolosses ~~2010 unrealized gains~~ and ~~losses arising~~current ~~from~~economic ~~the~~conditions ~~translation of financial statements~~ in ~~consolidation,~~establishing ~~which~~the ~~would~~allowance befor ~~recognized~~doubtful ~~as “other comprehensive income” within stockholders’ equity, have not been material~~accounts.

For the years ended December 31, 2010 and 2009, approximately 21% and 14%, respectively, of the Company’s revenue was billed in currencies other than the U.S. dollar. The majority of the costs of the Company’s contracts have been from U.S. dollar denominated transactions. 38

~~Income Per Share Amounts~~ Index

Basic income (loss) per share is calculated by dividing the net income (loss) by the weighted average common shares outstanding for the period. Diluted income per share is calculated by dividing net income by the weighted average common shares outstanding for the period plus the effect of outstanding stock options when they are considered dilutive. Outstanding stock options were not considered dilutive in 2009. Inventory

~~Stock~~Inventory is stated at the lower of cost, determined on the first-~~Based~~in ~~Compensation~~ first out method, or market.

~~The~~Property Company has stock-based employee compensation plans, which are described more fully in Note 12. Prior to January 1, 2006, the Company accounted for stock options issued pursuant to its stock option plans (the “Plans”) under recognition and measurement provisions of APB Opinion No. 25, as permitted by subsequent standards issued by the Financial Standards Accounting Board. Effective January 1, 2006, the Company adopted the fair value provisions for share-based awards, and compensation costs. All share based awards granted subsequent to January 1, 2006, are based on the grant-date fair value estimated in accordance with the provisions of the Financial Standards Accounting Board and recognized on a straight line basis over the shorter of the vesting or requisite service periods. Equipment

~~Fair~~Property ~~Value~~and ofequipment ~~Financial~~are ~~Instruments~~ recorded at cost. Depreciation is computed on accelerated methods for both financial reporting and income tax reporting purposes over the estimated useful lives as follows: office equipment — 5-7 years; lab equipment — 5 years; furniture and fixtures — 7 years; transportation equipment — 5 years; leasehold improvements — life of lease.

Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and bank financing reported in the consolidated balance sheets equal or approximate fair value due to their short maturities. Goodwill

41 Goodwill represents the excess of costs over the fair value of the net assets acquired in connection with the Company’s acquisition of Advanced ElectroMagnetics, Inc. (AEMI) in 1997.

~~Table~~The Company has tested the goodwill of ~~Contents~~AEMI for impairment at December 31, 2011 and 2010 using the present value of future cash flow valuation method. No adjustment for the value of goodwill was necessary.

~~Impact~~Revenue ofand ~~Recent~~Cost ~~Accounting Pronouncements~~ Recognition

~~Public~~The ~~companies~~Company’s inprincipal ~~the~~sources ~~United~~of ~~States~~contract revenues are ~~subject~~from toengineering ~~the~~and ~~accounting~~design services and ~~reporting~~the ~~requirements~~ production of ~~various~~electro-mechanical ~~authorities~~equipment. Revenues from long-term fixed-price development contracts performed principally under the Company’s control are recognized on the percentage-of- completion method, ~~including~~measured by the ~~Financial~~percentage ~~Accounting~~of ~~Standards~~costs ~~Board~~incurred ~~(“FASB”)~~to date to estimated total costs for each contract when such costs can be reasonably estimated. Contract costs include all direct material, labor and ~~the Securities~~subcontractor costs and ~~Exchange~~those ~~Commission~~indirect ~~(“SEC”).~~costs ~~These~~related ~~authorities~~to ~~issue~~contract ~~numerous~~performance ~~pronouncements~~such as indirect labor, ~~most of~~supplies ~~which~~and tool costs. Selling, general and administrative costs are ~~not~~charged ~~applicable~~to expense as incurred. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and revenue and are recognized in the ~~Company’s~~period ~~current~~in orwhich ~~reasonably~~the ~~foreseeable~~revisions ~~operating~~are ~~structure~~determined. ~~Below~~ Revenues recognized in excess of amounts billed are ~~the~~classified ~~new~~under ~~authoritative~~current ~~pronouncements~~assets ~~that~~as ~~management~~costs ~~believes~~and ~~are~~estimated ~~relevant~~earnings in excess of billings on uncompleted contracts. Amounts billed to ~~the Company’s~~customers in excess of revenues recognized to date are classified under current ~~operations~~liabilities as billings in excess of costs and estimated earnings on uncompleted contracts.

InRevenues ~~April 2009,~~from ~~the FASB issued FSP No. FAS~~electro-~~107-1~~mechanical ~~and~~equipment ~~APB~~sold ~~28-1, Interim Disclosures about Fair Value of Financial Instruments. This amends previous guidance,~~ to ~~require~~customers ~~disclosures~~which ~~about~~are ~~fair value~~not part of ~~financial~~a ~~instruments~~larger ~~for~~contract ~~interim~~are ~~reporting~~recognized ~~periods~~when asthe ~~well~~contract asis incompleted ~~annual~~and ~~financial statements.~~the ~~This~~equipment ~~guidance~~is ~~was effective for interim reporting periods ending after June 15, 2009~~delivered. ~~This guidance did not have any impact on our consolidated financial statements.~~

InResearch October 2009, the FASB issued revised guidance related to multiple-element arrangements which requires an entity to allocate arrangement consideration at the inception of an arrangement to all deliverables based on relative-selling-price. This update eliminates the use of the residual method of allocation and requires the relative-selling-price method in all circumstances. This guidance is effective for fiscal years beginning on or after September 15, 2010. Companies may use either prospective application for revenue arrangements entered into, or materially modified, after the effective date or through retrospective application to all revenue arrangements for all periods presented. The Company does not believe this amended guidance will have a material impact on its consolidated financial statements. Development

InInternally ~~October 2009,~~funded ~~the~~research ~~FASB~~and ~~issued~~development ~~amended~~costs ~~guidance~~are ~~that~~charged ~~affects~~to ~~how~~operations ~~entities~~as ~~account~~incurred. ~~for revenue~~Included ~~arrangements~~in ~~that~~cost ~~contain~~of ~~both~~revenues ~~hardware~~are ~~and~~customer-funded ~~software~~research ~~elements.~~and ~~Products~~development ~~that~~costs ~~rely~~of ~~on software~~approximately ~~will~~$0 beand ~~accounted~~$7 for ~~under~~ the ~~revised multiple-element arrangement revenue recognition guidance mentioned above rather than software revenue recognition guidance. The revised guidance must be adopted no later than fiscal~~ years ~~beginning~~ended onDecember ~~or after September 15~~31, ~~2010.~~2011 ~~The transition method~~ and ~~period~~2010, ~~for~~respectively. ~~the~~Other ~~adoption~~research ~~of this guidance~~ and ~~the~~development ~~revisions~~costs toare ~~the~~separately ~~multiple-elements arrangements~~reflected ~~guidance~~in ~~noted above must be~~ the ~~same.~~Consolidated ~~The~~Statement ~~Company~~of ~~does not believe that this guidance will have a material impact on its consolidated financial statements~~Operations.

~~Management~~Concentrations ~~does~~of ~~not~~Credit ~~believe~~Risk ~~that~~and ~~any~~Significant ~~other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s consolidated financial statements.~~ Customers

2.Financial ~~Inventory~~ instruments, which potentially subject the Company to a concentration of credit risk, consist principally of cash and accounts receivable.

~~Inventory~~The ~~consists~~Company ofmaintains cash and cash equivalents with various major commercial institutions in the ~~following:~~ U.S. and overseas. At December 31, 2010, cash balances that are either uninsured under the Federal Deposit Insurance Corporation coverage limit per financial institution, or are located overseas without such type of insurance coverage, totaled approximately $2.9 million. The Company does not anticipate credit risk in connection with its concentration of cash.

	December 31,
	2010		2009
Work-in-process	$	140	$	509
Parts and components		2,636		2,172
Total	$	2,776	$	2,681

To reduce credit risk relating to the Company’s sales in the U.S. and overseas, the Company performs ongoing credit evaluations of its commercial customers’ financial condition, but generally does not require collateral for government and domestic commercial customers. For certain foreign commercial customers, the Company generally requires irrevocable letters of credit in the amount of the total contract. At December 31, 2011, there were twenty eight bank guarantees in place for foreign customers with an aggregate value of approximately $5,465.

42 39

~~Table of Contents~~Index

3.Warranty ~~Property and Equipment~~ Expense

~~Property~~The ~~and~~Company ~~equipment~~provides ~~consists~~for ofwarranty costs on its products. Product warranty periods generally extend for one to two years from the ~~following:~~ date of sale. The warranty expense to date has not been material.

	December 31,
	2010		2009
Lab and computer equipment	$	2,864	$	2,411
Office equipment		884		742
Transportation equipment		61		45
Furniture and fixtures		65		10
Fixed assets in process		72		125
Leasehold improvements		651		627
Total		4,597		3,960
Less accumulated depreciation		2,301		1,867
Property and equipment, net	$	2,296	$	2,093

Income Taxes

4The Company records income tax expense on profitable operations and generally records income tax benefits on losses where applicable except where it is not considered more likely than not that the future benefit of such losses will be realized for income tax purposes in which case a valuation allowance is recorded equal to such tax benefit. ~~Accrued~~The ~~Expenses~~ Company uses the liability method to account for income taxes. Accordingly, deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts reportable for income tax purposes. The Company files a consolidated federal income tax return with its domestic subsidiaries and separate income tax returns in Israel and Germany for its foreign subsidiaries.

~~Accrued~~Foreign ~~expenses~~Currency ~~consist of the following:~~ Translation

	December 31,
	2010		2009
Contract costs	$	72	$	58
Compensation		1,673		1,525
Commissions		628		450
Royalties		71		58
Warranty		574		452
Customer advances and deferred revenue		240		241
Other		470		571
Total	$	3,728	$	3,355

For the years ended December 31, 2011 and 2010, approximately 26% and 21%, respectively, of the Company’s revenue was billed in currencies other than the U.S. dollar. The majority of the costs of the Company’s contracts have been from U.S. dollar denominated transactions. Transactions with the Company’s parent are predominantly in Euros. The majority of the costs incurred in performing the Company’s contracts have been denominated in U.S. dollars.

5The Company records transaction in connection with the foreign currency invoices received, collected, issued or paid at the exchange rate in effect at the date of the transaction. ~~Short~~Receivables ~~Term~~and ~~Bank~~payables ~~Financing~~ denominated in foreign currency are re-measured at each balance sheet date. The differences resulting from unrealized changes in foreign exchange rates are recorded as foreign gain or loss, which is included as a component of “Other income (loss), net” on the consolidated statement of operations. When a transaction is collected or paid within an accounting period, a realized foreign exchange gain or loss is recorded based on the rate at the date of settlement and the previous carrying amount of the receivable or payable. The Company occasionally enters into forward exchange currency contracts and their carrying amount is measured at each balance sheet date. The change in carrying amount is recoded as a foreign exchange gain or loss. The aggregate foreign exchange transaction gain was $15 for the year ended December 31, 2011 and $22 for the year ended December 31, 2010.

OnAs of December 13 31, ~~2010~~2011, the Company ~~signed~~had anet ~~new~~liabilities ~~$2.25 million domestic demand line~~ of ~~credit facility agreement with Citizens Bank~~4.5 ~~The~~million ~~revolving~~shekels, ~~line~~(approximately ~~can also be used to support the issuance of letters of credit~~$1. ~~The interest rate on loans under the line is at LIBOR rate plus~~ 2~~.25%.~~ ~~The new facility does not contain any financial covenants and is collateralized by the assets of Orbit Advanced Technologies~~million), ~~Inc.~~ and ~~Advanced Electromagnetics, Inc~~0.5 ~~subsidiaries~~million ~~of Orbit/FR~~Euros, ~~Inc.~~(approximately ~~The agreement prohibits the payment of dividends on or any distribution on account of any class of capital stock in cash or property without prior written consent of the Bank~~$0.6 ~~In addition~~million), ~~the Company~~subject ~~also signed a $250,000 asset term note non-revolving line of credit with Citizens Bank. This facility has an interest rate of prime plus two and one-half percent and allows up~~ to aforeign ~~five~~exchange ~~year amortization of any advances under the facility starting at the time of each advance.~~ fluctuation

~~Orbit/FR~~Income ~~Engineering,~~Per ~~LTD~~Share has established lines of credit with the two Israeli banks and one Indian Bank (Israeli Branch). The line of credit from one Israeli bank has a NIS denominated limit of 378 and USD 1,900 for the issuances of bank guarantees of letters of credit in favor of customers and one Israeli bank has a US dollar denominated limit of $250 and $2,400 for the issuances of bank guarantees of letters of credit in favor of customers. The Indian bank line of credit is $500 and $3,000 for the issuances of bank guarantees of letters of credit in favor of customers. The interest rates charged by all the banks are at LIBOR plus 2.25%. There were no outstanding balances due at December 31, 2010 and 2009 under the lines of credit. The bank agreements with all three banks do not have expiration dates but are subject to termination on a quarterly basis based upon the Company’s financial performance for the quarter. These lines of credit are collateralized by the assets of Orbit/FR Engineering, LTD., a subsidiary of Orbit/FR, Inc. Amounts

43 Basic income (loss) per share is calculated by dividing the net income (loss) by the weighted average common shares outstanding for the period. Diluted income per share is calculated by dividing net income by the weighted average common shares outstanding for the period plus the effect of outstanding stock options when they are considered dilutive. Outstanding stock options were anti- dilutive in 2011 and had no effect on earnings per share in 2010.

~~Table~~Stock-Based ~~of Contents~~Compensation

6The Company has stock-based employee compensation plans, which are described more fully in Note 12. ~~Related~~Prior ~~Party~~to ~~Transactions~~ January 1, 2006, the Company accounted for stock options issued pursuant to its stock option plans (the “Plans”) under recognition and measurement provisions of APB Opinion No. 25, as permitted by subsequent standards issued by the Financial Standards Accounting Board. Effective January 1, 2006, the Company adopted the fair value provisions for share-based awards, and compensation costs. All share based awards granted subsequent to January 1, 2006, are based on the grant-date fair value estimated in accordance with the provisions of the Financial Standards Accounting Board and recognized on a straight line basis over the shorter of the vesting or requisite service periods.

Included in sales and cost of revenues for the year ended December 31, 2010 are approximately $2.3 million and $423 respectively relating to sales to and purchases from Microwave Vision. Included in sales and cost of revenues for the year ended December 31, 2009, are approximately $530 and $683, respectively, relating to sales to and purchases from Microwave Vision for the year ended December 31, 2009. 40

On August 14, 2009, the Company entered into an Assistance and Provision of Services Agreement (the “Services Agreement”) with Microwave Vision and several subsidiaries of Microwave Vision, including Satimo. Microwave Vision owns 3.7 million shares of common stock of the Company, which it acquired through a reorganization involving its wholly owned subsidiary, Satimo. Satimo originally acquired its shares of common stock of the Company from Orbit-Alchut Technologies, Ltd. on May 13, 2008. Pursuant to the Services Agreement, Microwave Vision agreed to provide management, operational, sales and marketing, legal, technical and other services to the Company, Satimo, and Microwave Vision’s other direct and indirect Subsidiaries (collectively, the “Subsidiaries”). In consideration thereof, the Company, Satimo and each of the other Subsidiaries agreed to pay Microwave Vision a fee to be determined as of the start of each calendar year, effective on January 1, 2009, based on the projected gross margins of each Subsidiary for that year, subject to adjustment at year-end based on each entities gross margin (as defined) for the year. In addition, the Company agreed to pay Microwave Vision an additional fee of 1% of its gross sales in consideration of the right to use the name “Microwave Vision” in the Company’s sales and marketing activities. The Company has recorded approximately $1.7 million and $1.5 million respectively in expenses related to the Services Agreement for the years ended December 31, 2010 and 2009. As a result of the year-end adjustment, the amount of expense charged for the quarters ended December 31, 2010 and 2009 was approximately $657,000 and $588,000 or $315,000 and $271,000 respectively, greater than the quarterly charges accrued by the Company based upon budget. Index

7.Fair ~~Commitments~~Value ~~and~~of ~~Contingencies~~ Financial Instruments

~~The~~Cash ~~Company~~and ~~leases~~cash ~~its~~equivalents, ~~operating~~accounts ~~facilities~~receivable, ~~and~~accounts ~~certain~~payable, ~~equipment~~accrued ~~under~~expenses ~~non-cancelable operating~~and ~~lease~~bank ~~agreements~~financing ~~which~~reported ~~expire~~ in ~~various years through 2015. Rent expense for~~ the ~~years ended~~consolidated ~~December 31,~~balance ~~2010~~sheets ~~and~~equal ~~2009~~or ~~was~~approximate ~~approximately~~fair ~~$913~~value ~~and~~due ~~$906,~~to ~~respectively.~~their ~~Future~~short ~~minimum lease~~maturities ~~payments under non-cancelable operating leases with initial terms of one year~~ or ~~more~~recent ~~are as follows:~~ incurrence.

Year ending December 31:
2011	$	698
2012		510
2013		367
2014		265
2015		183
Total	$	2,023

Impact of Recent Accounting Pronouncements

~~Under~~Public ~~the~~companies ~~terms~~in of the ~~Chief~~United ~~Scientist~~States ~~grant~~are insubject ~~Israel, Engineering is obligated~~ to ~~pay royalties~~the ataccounting aand ~~rate~~reporting ofrequirements 2% of ~~revenues~~various ~~generated~~authorities, ~~from~~including the ~~sale~~Financial ofAccounting ~~certain~~Standards ~~products~~Board up(“FASB”) toand the ~~amount of~~Securities ~~the~~and ~~grant.~~Exchange ~~For~~Commission ~~the~~(“SEC”). ~~years~~These ~~ended~~authorities ~~December 31,~~issue ~~2010~~numerous ~~and 2009~~pronouncements, ~~royalties~~most ~~under~~of ~~this~~which ~~program~~are ~~were approximately~~not ~~$17~~applicable ~~and~~to ~~$8, respectively. At December 31, 2010,~~ the Company’s ~~had~~current anor ~~outstanding contingent~~reasonably ~~obligation~~foreseeable tooperating ~~the Chief Scientist of $87~~structure. ~~Such~~Below ~~contingent~~are ~~obligation~~the isnew ~~payable~~authoritative ~~in future~~pronouncements ~~periods~~that ~~based~~management ~~upon~~believes ~~annual~~are ~~sales~~relevant ofto ~~products~~the ~~developed~~Company’s ~~under~~current ~~the grants~~operations.

AtIn ~~December 31,~~April ~~2010~~2009, the ~~Company~~FASB ~~has~~issued ~~outstanding~~FSP ~~letters~~No. FAS-107-1 and APB 28-1, Interim Disclosures about Fair Value of ~~credit~~Financial inInstruments. ~~the~~This ~~favor~~amends previous guidance, to require disclosures about fair value of ~~customers and~~financial ainstruments ~~landlord~~for ~~totaling~~interim $5reporting periods as well as in annual financial statements. This guidance was effective for interim reporting periods ending after June 15,~~955~~ 2009. This guidance did not have any impact on our consolidated financial statements.

AsIn aOctober ~~result~~2009, of the ~~fire~~FASB issued revised guidance related to multiple-element arrangements which ~~occurred~~requires an entity to allocate arrangement consideration at the ~~Company’s~~inception ~~AEMI~~of ~~subsidiary~~an inarrangement ~~California~~to all deliverables based on ~~November 3,~~ ~~2010,~~relative-selling-price. This update eliminates the ~~Company~~use ~~has~~of ~~incurred~~the ~~additional~~residual ~~clean-up~~method of allocation and ~~other~~requires ~~costs~~the ~~which~~relative-selling-price ~~are~~method ~~subject~~in ~~to ongoing~~all ~~insurance~~circumstances. ~~claims~~This atguidance ~~December 31,~~was ~~2010.~~effective ~~Through~~for ~~December 31,~~fiscal ~~2010~~years ~~the~~beginning ~~Company~~on ~~has~~or ~~received $134~~after September 15, ~~representing~~2010. ~~the~~Companies ~~replacement~~may ~~cost~~use ofeither ~~certain~~prospective ~~machinery~~application ~~with~~for arevenue ~~depreciated~~arrangements ~~book~~entered ~~basis~~into, ofor ~~$25 resulting~~materially inmodified, aafter ~~gain~~the ofeffective ~~$109.~~date ~~Insurance~~or ~~recoveries~~through ~~for~~retrospective ~~other~~application ~~costs~~to ~~and~~all ~~business~~revenue ~~interruption coverage~~arrangements ~~are~~for ~~still~~all ~~pending~~periods atpresented. ~~December 31,~~The ~~2010~~revised ~~and~~guidance ~~will~~did benot ~~reported~~have asa ~~revenue~~material ~~upon~~impact ~~settlement with~~on ~~the~~its ~~insurance~~consolidated ~~carrier~~financial statements.

44 In October 2009, the FASB issued amended guidance that affects how entities account for revenue arrangements that contain both hardware and software elements. Products that rely on software will be accounted for under the revised multiple-element arrangement revenue recognition guidance mentioned above rather than software revenue recognition guidance. The revised guidance must be adopted no later than fiscal years beginning on or after September 15, 2010. The transition method and period for the adoption of this guidance and the revisions to the multiple-elements arrangements guidance noted above must be the same. This guidance did not have a material impact on ours consolidated financial statements.

8.Management ~~Segment~~does ~~and~~not ~~Geographic~~believe ~~Information~~ that any other recently issued, but not yet effected, accounting standards if currently adopted would have a material effect on the Company’s consolidated financial statements.

~~The Company operates exclusively in one industry segment, the business of developing, marketing and supporting sophisticated automated microwave test and measurement systems~~2. In addition to its principal operations and markets in the United States, the Company conducts sales, customer support and service operations to other geographic locations in Europe, Asia, and North America. The following table represents financial information by geographic region for the years ended December 31, 2010 and 2009. Inventory

	North
	America		Europe		Asia		Total
2010
Sales to unaffiliated customers	$	17,102	$	11,869	$	7,274	$	36,245
Cost of revenues to unaffiliated customers		12,079		8,409		5,026		25,514
Gross profit unaffiliated customers	$	5,023	$	3,460	$	2,248	$	10,731
Net property and equipment	$	1,059	$	1,237	$	—	$	2,296
Total assets	$	12,087	$	9,813	$	—	$	21,900
2009
Sales to unaffiliated customers	$	16,152	$	8,208	$	6,886	$	31,246
Cost of revenues to unaffiliated customers		10,316		5,362		4,805		20,483
Gross profit unaffiliated customers	$	5,836	$	2,846	$	2,081	$	10,763
Net property and equipment	$	812	$	1,281	$	—	$	2,093
Total assets	$	11,452	$	8,661	$	—	$	20,113

Inventory consists of the following:

In the table above “North America” includes property and assets of all domestic operations, and “Europe” includes property and assets of the subsidiaries in Germany and Israel.

	December 31,
	2011		2010
Work-in-process	$	243	$	140
Parts and components		2,680		2,636
Total	$	2,923	$	2,776

~~9. Income Taxes~~ 41

~~Pretax income was applicable to the following jurisdictions:~~ Index

	Year ended December 31,
	2010		2009
United States	$	57	$	665
Foreign		1,743		297
Total	$	1,800	$	962

3. Property and Equipment

~~The~~Property ~~components~~and ofequipment ~~income~~consists ~~tax~~of ~~(benefit) are~~the ~~as follows~~following:

	Year ended December 31,
	December 31,
	2010			2009
	2011			2010
Currently Payable (Refundable):
Lab and computer equipment	$	3,635		$	2,864
Federal state and local taxes within the U.S.	$	95		$	—
Office equipment		1,030			884
Foreign		(190	)		—
Transportation equipment		61			61
Total		(95	)		—
Furniture and fixtures		68			65
Deferred:
Project- in-process		400			72
Federal		(382	)		(539	)
Leasehold improvements		680			651
Foreign		(20	)		31
Total		5,874			4,597
Total		(402	)		(508	)
Less accumulated depreciation		2,900			2,301
Total income tax (benefit)	$	(497	)	$	(508	)
Property and equipment, net	$	2,974		$	2,296

~~A reconciliation of income tax (benefit) at the U~~4.S. ~~Federal~~Accrued ~~statutory tax rate and the actual income tax (benefit) is as follows:~~ Expenses

	Year ended December 31,
	2010			2009
Tax expense at statutory U.S. Federal rate	$	612		$	327
State and local taxes within the U.S.		35			17
Reversal of previous tax accruals		(218	)		—
Decrease in deferred tax asset valuation allowance		(668	)		(1,181	)
Net additional prior years’ foreign income taxes resulting from tax examination		—			274
Decrease in tax rate on foreign deferred tax assets		(152	)		—
Foreign tax rate difference compared to U.S. tax rate		(125	)		31
Other, net		19			24
Total income tax (benefit)	$	(497	)	$	(508	)

Accrued expenses consists of the following:

	December 31,
	2011		2010
Contract costs	$	211	$	72
Compensation		1,436		1,673
Commissions		620		628
Royalties		25		71
Warranty		437		574
Customer advances and deferred revenue		219		240
Other		416		470
Total	$	3,364	$	3,728

~~Table~~5. ~~of Contents~~Debt

The ~~tax~~components ~~effects~~ of ~~temporary~~debt ~~differences~~shown ~~that~~in ~~give~~the ~~rise~~accompanying tobalance asheet ~~significant~~are ~~portion~~as ~~of deferred tax assets and liabilities consist of the following~~follows:

	December 31,
	2010			2009
	2011			2010
Deferred tax assets:
Short term bank financing	$	500		$	--
U.S. net operating loss and tax credit carryforwards	$	2,688		$	2,912
Total long term debt	$	133		$	--
MVG expense not currently deductible		287
Less: current portion		(27	)		--
Allowance for doubtful accounts		31			24
Total long-term debt, net of current portion	$	106		$	--
Accrued warranty reserves		100			63
Inventory reserve		15			21
Accrued compensation		161			174
Stock-based compensation		71			113
Unearned service revenue		86			86
Foreign, including German and Israel net operating loss carryforwards		569			827
Total deferred tax assets		4,008			4,220
Deferred tax liabilities:
Depreciation		(174	)		—
Purchase accounting basis differences		(124	)		(124	)
Total deferred tax liabilities		(298	)		(124	)
Net deferred tax asset		3,710			4,096
Less valuation allowance		(1,586	)		(2,374	)
Net deferred tax asset	$	2,124		$	1,722

AsOn of December 31 13, 2010, the Company ~~has~~signed ~~net~~a ~~operating~~one ~~loss~~year ~~carryforwards~~$2.25 million domestic demand line of ~~approximately $7,806~~credit ~~for~~facility ~~U.S.~~agreement ~~federal~~with ~~income~~Citizens ~~tax~~Bank. The ~~purposes~~revolving ~~which~~line ~~expire~~can ~~through~~also ~~2024.~~be Onused ~~May 13,~~to ~~2008,~~support ~~Alchut~~the ~~sold all~~issuance of ~~its~~letters 3of credit.~~7 million~~ ~~shares~~The ofinterest ~~common~~rate ~~stock~~on ofloans under the ~~Company~~line tois ~~Satimo~~at LIBOR rate plus 2.25%. ~~Due~~This tofacility ~~the~~does ~~change~~not ~~in ownership~~contain ofany ~~the~~financial ~~Company~~covenants ~~utilization~~and ofis acollateralized ~~portion~~by the assets of ~~these~~Orbit ~~net~~Advanced ~~operating~~Technologies, ~~loss~~Inc. ~~carryforward~~and ~~is limited~~Advanced ~~pursuant~~Electromagnetics, toInc. ~~Section 382~~subsidiaries of Orbit/FR, Inc. The agreement prohibits the ~~Internal~~payment ~~Revenue~~of ~~Code~~dividends toon ~~approximately~~or ~~$1,315~~any adistribution ~~year,~~on ~~plus~~ account of any ~~losses~~class ~~incurred~~of ~~after~~capital ~~May 13,~~stock ~~2008.~~in ~~The~~cash ~~Company~~or ~~has~~property awithout ~~net~~prior ~~operating~~written ~~loss~~consent ~~carryforward~~of ~~in Germany~~the Bank. The revolving line of ~~approximately~~credit ~~$431~~agreement ~~and~~requires an ~~Israeli~~annual ~~net~~“clean-up” ~~operating~~period ~~loss carryforward~~ of ~~approximately~~30 ~~$621, both~~days ofwhere ~~which~~no ~~are~~loans ~~available~~under ~~indefinitely.~~the Inline ~~2010~~may ~~and~~be ~~2009~~outstanding. In addition, the Company ~~decreased~~also ~~its~~signed ~~valuation allowance~~a on$0.25 ~~its~~million ~~deferred~~asset ~~tax~~term ~~assets~~note bynon-revolving ~~$668~~line ~~and~~of ~~$1,098,~~credit ~~respectively~~of ~~due~~credit towith ~~the~~Citizens ~~Company’s~~Bank. ~~estimate of~~This ~~its~~facility ~~ability~~has toan ~~generate~~interest ~~sufficient~~rate ~~future~~of ~~taxable~~prime ~~income~~plus intwo ~~the~~and ~~U.S.,~~one-half ~~Israel~~percent and ~~Germany~~allows up to ~~realize~~ a ~~portion~~five year amortization of ~~its~~any ~~deferred~~advances ~~tax~~under ~~assets~~the facility starting at the time of each advance.

The Company’s US tax returns for 2007 through 2010 are open to examination by the Internal Revenue Service. The open years for state tax examination vary from 2006 through 2010. The Company’s German and Israeli tax years open to examination are 2007 through 2010. 42

The Company has not provided for federal income taxes applicable to the undistributed earnings of its foreign subsidiaries of approximately $1.0 million as of December 31, 2010, since these earnings are considered permanently reinvested. Index

10The Company borrowed $0.14 ~~Retirement~~million ~~Plans~~ of the $0.25 million available under its Term Note-Non Revolving Line of Credit to purchase a Computer Numerical Control (CNC) machine for its subsidiary Advanced Electromagnetics, Inc. The current portion of this long term debt is $0.027 million and is included in current liabilities. The long term debt portion is $0.106 million. The note is payable in 60 equal installments and has an interest rate of 4.28%. The principal payments at December 31, 2011 are $0.03 million per annum through 2015 and $0.1 million in 2016. On September 23, 2011 the Term Note-Non Revolving Line of Credit was extended to August 31, 2017. The Bank also extended the date that the Company can draw on the Term Note-Non Revolving Line of Credit to August 31, 2012.

~~The~~Orbit/FR ~~Company~~Engineering, LTD has ~~retirement~~established ~~plans~~lines ~~which~~of ~~cover~~credit ~~substantially~~with ~~all~~the Utwo Israeli banks and one Indian Bank (Israeli Branch).S The line of credit from one Israeli bank has a limit of NIS 0.378 ~~employees~~million ~~who~~(approximately ~~have attained~~$0.1 million) and $1.9 million, for the ~~age~~issuances of 21bank guarantees of letters of credit in favor of customers and ~~have~~one ~~completed~~Israeli ~~3 months~~bank has a limit of ~~service~~$0.25 ~~Eligible~~million ~~employees~~and ~~make~~$2.4 ~~voluntary contributions~~million tofor the ~~plans~~issuances upof tobank ~~specified~~guarantees ~~percentages~~ of ~~their~~letters ~~annual~~of ~~compensation~~credit asin ~~defined~~favor ~~in the~~of ~~plans~~customers. ~~Under~~The ~~the~~Indian ~~plans,~~bank ~~the~~line ~~Company~~of ~~makes~~credit ~~discretionary~~is ~~matching~~$3.0 ~~contributions~~million for ~~determinable each~~the ~~plan~~issuances ~~year~~of ~~and~~bank ~~additional~~guarantees ~~contributions~~of ~~based~~letters onof ~~annual~~credit ~~eligible~~in ~~compensation~~favor ~~for~~of ~~each participant~~customers. The ~~plans~~interest ~~are~~rates ~~funded~~charged onby aall ~~current~~the ~~basis~~banks are at LIBOR plus 2.25%. ~~For~~There ~~the~~was ~~years~~no ~~ended~~outstanding balance due at December 31, ~~2010~~2011 and ~~2009,~~ 2010 under the lines of credit. The bank agreements with all three banks do not have expiration dates but are subject to termination on a quarterly basis based upon the Company’s ~~contributions~~financial toperformance for the ~~plans~~quarter. ~~were~~These ~~$47~~lines ~~and~~of ~~$45~~credit are collateralized by the assets of Orbit/FR Engineering, ~~respectively~~LTD. , a subsidiary of Orbit/FR, Inc.

116. ~~Long-Term~~Related ~~Contracts~~ Party Transactions

~~Long-term~~Included ~~contracts~~ in ~~process~~sales ~~accounted~~and ~~for~~cost ~~using~~of revenues for the ~~percentage-~~year ended December 31, 2011 are approximately $2.5 million and $0.9 million respectively relating to sales to and purchases from Microwave Vision. Included in sales and cost of~~-completion~~ ~~method~~revenues for the year ended December 31, 2010, are ~~as follows:~~ approximately $2.3 million and $0.4 million, respectively, relating to sales to and purchases from Microwave Vision.

	December 31,
	2010			2009
Accumulated expenditures on uncompleted contracts	$	58,597		$	45,179
Estimated earnings thereon		18,310			13,335
Total		76,907			58,514
Less: applicable progress billings		(74,083	)		(59,659	)
Net	$	2,824		$	(1,145	)
The long-term contracts are shown in the accompanying balance sheets as follows:
Costs and estimated earnings on uncompleted contracts in excess of billings	$	4,941		$	1,668
Billings on uncompleted contracts in excess of costs and estimated earnings		(2,117	)		(2,813	)
Net	$	2,824		$	(1,145	)

On August 14, 2009, the Company entered into an Assistance and Provision of Services Agreement (the “Services Agreement”) with Microwave Vision and several subsidiaries of Microwave Vision, including Satimo. Microwave Vision owns 3.7 million shares of common stock of the Company, which it acquired through a reorganization involving its wholly owned subsidiary, Satimo. Satimo originally acquired its shares of common stock of the Company from Orbit-Alchut Technologies, Ltd. on May 13, 2008. Pursuant to the Services Agreement, Microwave Vision agreed to provide management, operational, sales and marketing, legal, technical and other services to the Company, Satimo, and Microwave Vision’s other direct and indirect Subsidiaries (collectively, the “Subsidiaries”). In consideration thereof, the Company, Satimo and each of the other Subsidiaries agreed to pay Microwave Vision a fee to be determined as of the start of each calendar year, effective on January 1, 2009, based on the projected gross margins of each Subsidiary for that year, subject to adjustment at year-end based on each entities’ gross margin (as defined) for the year. In addition, the Company agreed to pay Microwave Vision an additional fee of 1% of its gross sales in consideration of the right to use the name “Microwave Vision” in the Company’s sales and marketing activities. The Company has recorded approximately $1.2 million and $1.7 million respectively in expenses related to the Services Agreement for the years ended December 31, 2011 and 2010.

46 7. Commitments and Contingencies

~~Table~~The Company leases its operating facilities and certain equipment under non-cancelable operating lease agreements which expire in various years through 2016. Rent expense for the years ended December 31, 2011 and 2010 was approximately $1.1 million and $0.9 million, respectively. Future minimum lease payments under non-cancelable operating leases with initial terms of ~~Contents~~one year or more are as follows:

12. Stock Option Plan

Year ending December 31:
2012	$	860
2013		669
2014		409
2015

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