10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the Fiscal Year Ended December 31, 2008

OR

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

ORBIT/FR, Inc.

(Exact Name of Registrant as Specified in its Charter)

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

(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

     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

     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 þ       No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

     Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Act)

     Yes o       No þ

     As of June 30, 2008, 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 $4,488,067 (based on the closing price of the Common Stock on June 30, 2008 of $1.95 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 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 April 15, 2009, 6,001,573 shares of Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     The information required to be disclosed in Part III of this Annual Report on Form 10-K will be provided by the Registrant in an amendment to this Annual Report on Form 10-K that will be filed with the Commission no later than April 29, 2009.

ORBIT/FR, Inc.

Index

	Page No.
PART I.
Item 1. Business	3
Item 1A. Risk Factors	13
Item 1B. Unresolved Staff Comments	16
Item 2 Properties	16
Item 3 Legal Proceedings	17
Item 4 Submission of Matters to a Vote of Security Holders	17
Item 4.1 Executive Officers and Key Employees	17
PART II.
Item 5 Market for the Registrant’s Common Equity and Related Stockholder Matters	18
Item 6 Selected Financial Data	21
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7a Quantitative and Qualitative Disclosure About Market Risk	26
Item 8 Financial Statements and Supplementary Data	26
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	26
Item 9A(T) Controls and Procedures	26
Item 9B Other Information	27
PART III	28
PART IV
Item 15 Exhibits, Financial Statement Schedule, and Reports on Form 8-K	28

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PART I

Forward-Looking Statements

     This 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 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.

ITEM 1. BUSINESS

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.

     Since its founding, the Company has expanded from distributing individual microwave test and measurement components to providing a wide range of fully integrated 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 a customer’s specific needs.

     The Company markets and sells its systems to customers in the United States and throughout the world. Within its targeted industries, the Company’s customers include aerospace/defense systems integrators and product manufacturers that incorporate microwave technology, such as Lockheed Martin, Raytheon, Northrop Grumman, BAE, L3 Communications, Alenia, Astrium, Lufthansa and Boeing; manufacturers of wireless systems and products, such as Motorola, Nokia, Ericsson, Samsung, Sony and Qualcomm; telecommunications service providers that rely on microwave technology, such as AT&T, NTT and British Telecom; and automobile and automotive subassembly manufacturers such as Daimler-Chrysler, Ford, BMW and Hyundai. The Company’s customers also include the United States government and several foreign governments.

     The Company’s primary objective is to strengthen its 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 objectives are: (i) offering comprehensive high quality solutions to customers; (ii) maintaining its technological leadership; (iii) focusing on standard systems and proprietary off-the-shelf products: (iv) pursuing growth in international markets; and (v) leveraging its technological expertise to expand into complementary markets.

     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.

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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 subsidiary, 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.

     Technologies was incorporated in 1985 as a wholly-owned subsidiary of Alchut to provide sales and customer support for Alchut’s products in the United States, including positioning subsystems. In 1991, Technologies began to focus on the development and design of its own proprietary microwave test and measurement products and systems. In 1994, Technologies recognized the potential for providing customers with fully integrated microwave test and measurement solutions and began incorporating its software technology with hardware from third-party manufacturers, including Alchut. Technologies continues to subcontract certain production services to Alchut through Engineering but retains the right to select any other production subcontractor.

     Engineering was incorporated in Israel in December 1996 as a wholly-owned subsidiary of Alchut at which time Alchut transferred all of the assets relating to its microwave test and measurement business to Engineering. Engineering is principally responsible for overseeing the development, 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 market.

     In October 1997, Orbit FR Europe, GmbH was incorporated in Germany. GmbH develops compact range measurement systems and components, and is responsible for sales, marketing and customer support to the European market.

     On June 28, 1996, Technologies purchased all of the issued and outstanding shares of Flam & Russell for approximately $1,043,000. The acquisition of Flam & Russell augmented the Company’s product mix, staff of microwave and software engineers and customer base. Flam & Russell has been active in the microwave test and measurement field since 1981.

     On June 17, 1997, the Company purchased all of the issued and outstanding shares of AEMI, contemporaneously with the completion of its initial public offering, for approximately $1.2 million. One-half of the purchase price was payable in cash and the other half was payable by issuance of shares of the Company’s Common Stock at the initial offering price of $8.25 per share. AEMI manufactures anechoic foam, a microwave absorbing material that is an integral component of microwave test and measurement systems.

     On September 6, 2005, the Company announced that it had reached a final settlement with the Office of Defense Trade Controls Compliance, Directorate of Defense Trade Control (DDTC) of the United States Department of State, terminating as of August 29, 2005 the statutory debarment that prohibited the Company’s direct or indirect participation in exports subject to the International Traffic in Arms Regulations (ITAR) since November 2, 1999. Accordingly, under the terms of the agreement DDTC has resumed the normal processing of license applications involving the Company.

     On March 12, 2008, Alchut entered into an agreement with Satimo, a French corporation, to sell all of its shares of common stock of the Company, which represented approximately 62% of the Company’s outstanding common stock to Satimo. The Company was not a party to the agreement between Alchut and Satimo.

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Industry Overview

     The 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.

     Within the wireless communications, satellite, automotive and aerospace/defense industries, test and measurement products and systems are used during all stages of a product’s life cycle, including product development, pre-production qualification, production testing and product maintenance. Given the broad scope of testing procedures, it is not uncommon for a manufacturer or service provider to own and operate more than one microwave test and measurement system.

     Aerospace/Defense. The need within the aerospace/defense community for accurate and secure communications and tracking systems led to the emergence of microwave test and measurement companies in the 1960’s. Recent growth in Homeland Security and Department of Defense budgets are expected to provide additional opportunities for the Company.

     The industry’s tracking requirements, such as air traffic control, precision guided weapons, and data links and stealth aircraft, led to the development of Radar Cross Section (“RCS”) and the test and measurement of radomes. RCS involves the 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. Radome testing evaluates the impact of a radome (the dome-shaped casing that is placed on the leading edge of an aircraft or missile to protect the radar and direction-finding equipment) on the microwave signals that pass through it.

     Wireless Communications. The wireless communications industry has grown in recent years as a result of the development of cost-effective digital technologies and the gradual global deregulation of the telecommunications industry. Wireless communications products include cellular/PCS handsets and base stations, pagers, wireless PDAs, and Bluetooth, Wi-Fi and Wi-Max products, and RFIDs (RF tags). The Company expects continued growth within the wireless communications industry in the future due to an increase in available spectrum, new generations of cellular systems, the adoption of efficient new digital technologies and the development of “smart” antennas.

     Growing worldwide demand for wireless communications products and services 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-competitive, rapidly changing markets in which the performance and reliability of their systems and products are essential to achieve and maintain competitive advantage. The accurate transmission and reception of microwave signals are fundamental to the performance of wireless systems and products. To ensure the successful transfer of voice or data from one point to another and to minimize poor reception, cross talk and dropped calls, manufacturers and service providers conduct extensive testing of both cellular handsets and wireless base stations for signal quality, direction, strength and interference.

     Satellite. Satellite-related markets have grown over the past several years, driven by the emergence of advanced communication technologies offering cost-effective global voice, video and data transmission, GPS, internet access and tracking capabilities. Satellites provide several advantages over

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terrestrial communications networks, including rapid installation and deployment, no incremental cost as distances increase and higher rates of data transmission.

     To ensure that satellite-based communications systems are effective and reliable, it is essential that both satellites and “earth stations” transmit and receive microwave signals accurately. The accuracy requirements for these satellite systems are critical, and failure to detect a design error 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 to manufacture, launch and insure a satellite can exceed approximately $200 million. Accordingly, sophisticated microwave test and measurement systems are critical to satellite and earth station manufacturers, as well as their subcontractors and sub-assembly manufacturers, to ensure that their products work properly.

     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.

The ORBIT/FR 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 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.

     The Company offers a wide range of standard and custom microwave test and measurement solutions for specialized aerospace/defense-related 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.

The ORBIT/FR Strategy

     The Company’s 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:

     Offering Comprehensive Turnkey Solutions to Customers. 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 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

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may periodically acquire companies with complementary products and services that can be integrated with the Company’s existing or proposed products and systems, as it did with its acquisitions of Flam & Russell and AEMI. 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 margins.

     Maintaining Technological Leadership. The Company believes that it has sophisticated and diversified technological capabilities and intends to strengthen its technologies by continuously designing and developing new software releases and hardware upgrades which offer greater performance and higher precision.

     Focusing on Standard Products and Proprietary Off-the Shelf Products. Given the diversified needs of the Company’s customers, no two microwave test and measurement systems are identical. However, the Company seeks to keep the costs of customization to a minimum by designing and delivering specific types of systems that maximize the use 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 reliable products.

     Continued focus on Expanding U.S. Aerospace/Defense Market. As a result of its reputation and diverse product line, the Company maintains relationships with the U.S. government and several of the leading defense contractors. With expected increases in Homeland Security and Department of Defense budgets, the Company expects to expand this relationship.

     Pursuing Growth in International Markets. Approximately 47%% and 65% of the Company’s revenues during 2008 and 2007, respectively, were derived from international customers (customers outside of North America). The Company believes that in addition to domestic growth as a result of increases in Department of Defense and Homeland Security budgets, the international microwave test and measurement marketplace will also grow over the next several years, due in large part to worldwide economic development, governmental policies aimed at improving the communications infrastructure in developing countries and the increasing globalization of commerce. The Company has devoted and intends to continue to devote significant efforts to increasing its share of the international market for microwave test and measurement 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 it has a competitive advantage due to the duty-free status of its products manufactured in Israel and sold into the European Union.

     Leveraging Technological Expertise to Expand into Complimentary Markets. The Company intends to leverage its technological expertise in microwave test and measurement systems to expand into complementary markets that the Company believes offer high growth potential and where the Company’s technology provides competitive advantages.

     Microwave 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.

Systems and Products

     Since its founding, the Company has expanded from distributing individual microwave test and 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.

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The Company believes that one of its principal strengths is its experienced design team that solves complex technical and practical problems.

     Microwave Test and Measurement Systems. The Company designs, manufactures 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 customers in use of the systems. Although most customers purchase fully integrated turnkey microwave test and measurement systems, the Company also sells its hardware and 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 can be adapted for many uses, and the 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 $500,000, but large systems have been sold for over $3 million.

     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 base-stations, field service/delivery equipment, satellite earth stations and 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 user-friendly and cost-effective solutions for their antenna measurement needs. The systems test 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; production; and maintenance. 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:

Far-field:	Traditional method generally used outdoors
Near-field:	Cost-effective indoor method using mathematical conversion tools
Compact Range:	High-end indoor method using a microwave reflector

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

     Cellular/PCS/Pager Systems. ORBIT/FR seeks to be a leader in the design and delivery of high-performance test and measurement systems for manufacturers of cellular/PCS handsets, pagers, and PDAs. The Company has developed a standard system called “PowerCell” based on its spherical near-field technology that the Company sells as a turnkey, off-the-shelf product. The system consists of a Dielectric Belt Driven Rotator (DBDR) positioning system, and the Company’s software and receiver, constructed in a small anechoic chamber. The positioning subsystem allows a probe to trace a sphere around the handset or pager held by a mannequin, thus fully sampling the complete microwave properties of the device under test. The PowerCell system is compliant with the CTIA standards.

     Cellular/PCS Base Station Systems. The Company develops and sells test and measurement systems used to assess the microwave performance characteristics of 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.

     Satellite Systems. The Company develops and sells microwave test and measurement systems for satellite communication and broadcast systems which test the satellite performance of the satellite’s antennas. These systems also test the transmit and receive characteristics of the active array antennas used on most modern satellites and can have the ability to identify and diagnose malfunctions within

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these complex antennas. The Company’s satellite test systems utilize either near-field or compact range technology. Both technologies are equally effective from a test and measurement viewpoint, but each offers certain benefits. A near-field system offers diagnostic capabilities and is generally less expensive than a comparably equipped compact range system, but a compact range system is faster and easier to use.

     Automotive Systems. ORBIT/FR believes it is a leader in the design and delivery of high-performance test and measurement systems for automobile manufacturers and manufacturers of automotive sub-assemblies. The Company’s systems incorporate both near-field and far-field technologies and are thus capable of microwave sampling over a wide range of frequencies. A typical system includes a large mechanical arm that sweeps over a large turntable. The car being tested rests on the turntable, and both the turntable and the mechanical arm are set in motion based upon instructions received from the Company’s measurement software. The systems’ broad capabilities are essential given a growing trend by automobile manufacturers to integrate advanced microwave technologies such as cellular/PCS, GPS-based navigation system, satellite radios, digital TV and collision-avoidance systems into their advanced next generation cars.

     RCS Systems. The Company’s Radar Cross Section measurement systems transmit microwave signals towards a passive target and then measure the energy reflected back towards the transmit source. In an RCS system, the passive target is typically a model or full scale aircraft or missile that is mounted on a special “low-RCS” testing pylon capable of rotating the target. Data collected at various rotation angles and frequencies can be processed to form an electromagnetic “image” of the target. This type of information enables the design engineer to assess more accurately the detailed radar signature of the target. The Company believes that it is a market leader in this field.

     Radome Systems. A radome is a dome-shaped casing that is placed on the leading edge of a commercial aircraft, military aircraft or missile to protect the radar and direction-finding equipment. A radome is typically manufactured using fiberglass or other materials that are designed to be “transparent” to microwave signals. Testing is performed periodically to ensure that microwave signals are not degraded or deflected as they pass through the radome. The Company’s systems are designed to measure radome performance by analyzing the path of microwave signals as they pass through the radome and then comparing it to the propagation path when the radome is not present. Radome systems use far-field measurement methods but rely on high positioning accuracy normally required by near-field systems.

     Custom Systems. From time to time, the Company designs and manufactures custom microwave test and measurement systems for a wide variety of uses and applications worldwide. The Company’s broad microwave and antenna expertise has enabled it to obtain these contracts, and the Company intends to bid for similar jobs in the future if the expertise gained in designing such systems is deemed to be of strategic value to the Company.

     Microwave Test and Measurement Software Products. Through its 959Spectrum 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.

     Although software can vary between systems, it always consists of 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

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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.

     Positioner Subsystems. The positioner subsystem is the collection of equipment that holds the device under test and causes it to be moved according to the needs of the test. A typical positioner subsystem may include the following components:

     Positioners. A positioner is the item upon which the device under test is 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 travel efficiently through the positioner to the computer to 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. The Company offers over 200 different positioner models and believes that its positioners are among the most accurate.

     Positioner Controllers and Power Control Units. The Company manufactures positioner controllers and power control units (PCUs) as well as models that combine these two products into one component. Working together, the positioner controller and the PCU act as the “translators” between the measurement software and the positioner. The positioner controller receives digital instructions from the microwave software and translates them into analog signals understood by the PCU. These analog signals are then amplified by the PCU to provide precisely calibrated DC power to the positioner’s electric motors, which then operate at a user-defined speed to move the antenna or device under test through the desired positions. The Company offers four positioner controller models, two PCU models and four models that combine both positioner controller and PCU.

     Planar Scanners. A planar scanner is a rectangular device that enables a probe antenna to be moved along an x- and y-axis so that its position at any time is known and can be exactly replicated. Planar scanners are mounted to enable the probe to be moved throughout the height and width dimensions of the scanner. Scanners enable test engineers to accurately and reliably analyze many aspects of the microwave signals radiating from the antenna or device under test. The Company offers 24 standard scanners ranging in size from 3 feet by 3 feet to over 100 feet by 100 feet.

     Pylons and Model Towers. Pylons and model towers are used in many microwave test and measurement applications and range in size from very large to very small. 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 Microwave Products. The Company has developed several microwave products used in the larger microwave industry.

     Radial Power Combiners. The Company’s radial power combiners offer a highly efficient electromagnetic mechanism to combine several identical low-energy signals together to make a single high-energy signal. Radial power combiners have many uses, but their most common application is in high-power microwave transmitters.

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     Antennas, 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.

Sales and Marketing

     The Company markets and sells its products in the United States through direct regional sales managers 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’s engineers and other technical staff support the efforts of 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 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), advertising in trade publications, participation in conferences and trade shows, and on the World Wide Web.

Customer Support

     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

     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.

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Satellite	Astrium, DASA, EADS, Elenia Spazio, Harris, Lockheed Martin, Space Systems/Loral, Raytheon and TRW.
Automotive	Blaupunkt, 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 (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. For the years ended December 31, 2008 and December 31, 2007, a large European customer accounted for approximately 6% and 18%, respectively, of consolidated revenues. No single customer accounted for more than 10% of the Company’s 2008 consolidated revenues.

Production and Suppliers

     The Company’s engineers, based in the United States, Germany and 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. Alchut is currently the Company’s principal subcontractor for electro-mechanical production, primarily in connection with the manufacturing of positioners. The Company believes that as a result of its co-location and relationship with Alchut, they offered the best available combination of quality, reliability and price. Effective April 2009, however, the Company has the right to select any subcontractor, including Alchut. 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.

     Although the Company produces most 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

     At December 31, 2008 and 2007, the Company’s backlog was approximately $18.4 million and $12.1 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.

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Research and Development

     The Company 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 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 $33 and $203 for the years ended December 31, 2008 and 2007, respectively.

     Other research and development expenses of the Company for fiscal years ended December 31, 2008 and 2007 were approximately $2,080 and $1,607, respectively.

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., ETS, March Microwave.

Proprietary Rights

     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.

Employees

     As of December 31, 2008, the Company had a total of 110 employees. The Company considers its relations with its employees to be good.

ITEM 1A. RISK FACTORS

     Rapid Technological Change. The 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.

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     Dependence on Proprietary Technology. The Company’s success is heavily dependent upon its proprietary technology. The Company does not currently have any material patents and relies principally on trade secret and copyright laws to protect its technology. However, there can be no assurance that these steps will prevent misappropriation of its technology. Moreover, third parties could independently develop technologies that compete with the Company’s technologies. Although the Company believes that its products and proprietary rights do 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, effective copyright and trade secret protection of the Company’s proprietary technology may be unavailable or limited in certain foreign countries.

     Dependence on Alchut; Operations in Israel The Company presently maintains a number of relationships with Alchut, the former majority stockholder of the Company. Alchut is the Company’s principal subcontractor for electro-mechanical production, primarily in connection with the production of positioners. In addition, Alchut provides general and administrative services for the Company’s operations in Israel. Effective January 1, 2004, the Company and Alchut entered into an agreement under which Alchut will continue to provide these services for at least one year. Alchut has continued to provide these services. Alchut maintains its production operations, and the Company maintains part of its engineering operations, in Israel. As a result, the Company may be directly influenced by the political, economic and military conditions affecting Israel.

     On May 13, 2008, Orbit-Alchut Technologies, Ltd., (“Alchut”) sold all of its 3.7 million shares of common stock of the Company to Satimo, SA. As part of that transaction, Alchut has agreed to continue to provide the services for a period of one year after the closing of the transaction. Currently the Company’s subsidiary in Israel has signed a lease and is in the process of moving its operations to a new location. The Company anticipates that all the general and administrative services previously provided by Alchut will be in place at the expiry of the one year service agreement on May 13, 2009.

     As a result of the change in ownership of the Company utilization, of the Company’s domestic net operating loss carryforwards is limited pursuant to Section 382 of the Internal Revenue Code. Such limitation may have an effect on future results of operations.

     Risks of Fixed-Price Contracts. Virtually all of the Company’s contracts for its systems and products are on a fixed-price basis. The profitability of such contracts is subject to inherent uncertainties as to the cost of completion. In addition to possible errors or omissions in making initial estimates, cost overruns may be incurred as a result of unforeseen obstacles, including both physical conditions and unexpected problems in engineering, design or testing. Since the Company’s business may at certain times be concentrated in a limited number of large contracts, a significant cost overrun on any one contract could have a material adverse effect on the Company’s business, operating results and financial condition.

     Risks Associated with Entering New Markets. The Company has identified and is evaluating whether to enter into certain complementary markets. The Company’s success in these markets will depend on, among other factors, the Company’s ability to identify markets and develop technologies for such markets on a timely basis, hire and retain skilled management, financial, marketing and engineering personnel, successfully manage growth and obtain capital sufficient to finance such expansion. There can be no assurance that the Company will successfully enter these markets.

     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 and technical personnel. There can be no assurance that the Company will be able to manage its growth

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successfully. Failure to do so could have a material adverse effect on the Company’s business, operating results and financial condition.

     Risks Associated with International Sales. In 2008 and 2007, international sales (sales to customers outside of North America) comprised approximately 47% and 65%, 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 81% of the Company’s sales in 2008 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.

     Potential Fluctuations in Quarterly Results. The Company’s operating results have varied from quarter to quarter in the past and may vary significantly in the future depending on factors such as the size and timing of significant contracts, the mix of third party products and the Company’s proprietary products included in a particular contract, customers’ budgetary constraints, increased competition, the timing of new product announcements and changes in pricing policies by the Company or its competitors, market acceptance of new and enhanced versions of the Company’s products, changes in operating expenses and changes in general economic factors and export license delays and denials. The Company’s expense levels are based, in part, on its expectations as to future revenue levels. If the Company’s revenue levels were to be below expectations, the Company’s operating results would likely be materially adversely affected.

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

     Dependence on Key Personnel. The success of the Company depends to a significant degree upon the contribution of its executive officers and other key personnel. There can be no assurance that the Company will be able to retain its managerial and other key personnel or to attract additional managerial and other key personnel if required.

     Product Liability; Risk of Product Defects. The sale of products and systems by the Company may entail the risk of product liability and related claims. A product liability claim brought against the Company could have a material adverse effect upon the Company’s business, operating results and financial condition. Complex software and system products, 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 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 $7.0 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. The market for automated microwave test and measurement products, systems and services is highly competitive and is characterized by continuing advances in products and technologies.

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In general, competition in this market comes from major microwave test and measurement vendors, some of which have a longer operating history, significantly greater financial, technical and marketing resources, greater name recognition and a larger installed customer base than the Company. These companies also 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, 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.

     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.

     No Dividends. 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.

     Issuance of Preferred Stock and Common Stock; Anti-Takeover Provisions. Pursuant to its Amended and Restated Certificate of Incorporation, the Company has an authorized class of 2,000,000 shares of Preferred Stock which may be issued by the Board of Directors with such terms and such rights, preferences and designations as the Board may determine and without any vote of the stockholders, 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 preventing a change in control of the Company. 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.

     Market for Common Stock. The 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.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

     The Company occupies approximately 18,000 square feet of space at its headquarters in Horsham, Pennsylvania under a lease expiring in October 2015. The current annual base rent is approximately $145,000. The Company also maintains sales, engineering, technical support and

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program management facilities in Israel and Germany, and its manufacturing facilities in Santee, California. The Company’s current aggregate annual rental expenses for these additional facilities are approximately $316,000.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not currently subject to any additional material legal proceedings and is not aware of any other threatened litigation unasserted claims or assessments that could have a material adverse effect on the Company’s business, operating results, or financial condition.

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

     None.

ITEM 4.1 EXECUTIVE OFFICERS AND KEY EMPLOYEES

     The following table sets forth certain information regarding the Company’s executive officers and certain key employees.

NAME	AGE		POSITION
Per Iversen		44	President and Chief Executive Officer
Relland Winand		54	Chief Financial Officer
John Aubin		55	Vice President, Business Development and CTO
Moshe Pinkasy		58	Managing Director, Engineering
Marcel Boumans		50	Managing Director, GmbH
William Campbell		53	Vice President, Engineering and Program Management
Scott Martin		45	Managing Director, Advanced ElectroMagnetics, Inc.

     Per Iversen was named President and Chief Executive Officer in June 2008. Mr. Iversen had been employed by Satimo S.A. since 1998, and had been Chief Technology Officer and Director of US Operations. 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.

     Relland Winand was named Chief Financial Officer in March, 2008. From 2003 to 2007, Mr. Winand served in several capacities at Traffic.com, Inc. including Controller, Vice President Finance and Vice President Administration.

     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.

     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.

     Marcel 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

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was a Systems Design Engineer for Dornier GmbH, the communications and defense subsidiary of Daimler-Benz Aerospace.

     William Campbell joined the Company as Vice President, Engineering and Program Management in December 2002. Mr. Campbell managed Optical Transponder development and production activities 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.

     Scott Martin joined the Company as Managing Director of Advanced ElectroMagnetics, Inc. in June, 2006. Mr. Martin was previously Director of Operations for Micromanioulator from 2004 to 2006. Prior to that Mr. Martin was a Vice President and General Manager for Hytek Microsystems

PART II

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

     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,
	2008				2007
	High		Low		High		Low
First Quarter	$	2.72	$	1.85	$	2.65	$	2.08
Second Quarter	$	2.55	$	1.62	$	2.45	$	1.80
Third Quarter	$	1.95	$	1.35	$	2.10	$	1.60
Fourth Quarter	$	1.83	$	0.35	$	2.12	$	1.80

     On February 23, 2009, there were 32 holders of record of the Company’s Common Stock. Based on information received by the Company from its stock transfer agent, the Company believes that there are approximately 705 beneficial owners of its Common Stock.

     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.

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EQUITY COMPENSATION PLAN INFORMATION

     The following table sets forth information, as of the end of the fiscal year ended December 31, 2008, with respect to compensation plans under which the Company is authorized to issue shares of Common Stock.

	Number of Shares to				Number of Shares Remaining
	be Issued Upon		Weighted-Average		Available for Future Issuance
	Exercise of		Exercise Price of		under Equity Compensation
	Outstanding Options,		Outstanding Options,		Plans (excluding securities
Plan Category	Warrants and Rights		Warrants and Rights		reflected in 1st column)
Equity compensation plan(s) approved by security holders (1)		482,700	$	2.44		717,300
Equity compensation plan(s) not approved by security holders		—		—		—
Total		482,700	$	2.44		717,300

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

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Stock Performance Graph

          The graph below compares the cumulative total stockholder return on the Company’s Common Stock for the period from December 31, 2002 to December 31, 2008, with the cumulative total return of the NASDAQ Composite Index. Since historical peer group and industry or line-of-business data is not available, the graph below compares the cumulative total stockholder return on the Company’s Common Stock with the cumulative total return of Schmitt Industries, Inc., a publicly traded manufacturer of electronic and mechanical components for machine tool products and laser-measurement systems that has a market capitalization similar to that of the Company. The comparison assumes $100 was invested on December 31, 2000 in the Company’s Common Stock and in the foregoing index and assumes reinvestment of dividends.

COMPARISON OF CUMULATIVE TOTAL RETURNS

     

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ITEM 6. SELECTED FINANCIAL DATA

Consolidated Statement of Operations Data:	Year Ended December 31,
(amounts in thousands, except per share data)	2008			2007			2006			2005			2004
Contract revenues	$	23,118		$	29,292		$	29,441		$	22,905		$	21,185
Cost of revenues		17,103			20,044			20,750			15,540			13,567
Gross profit		6,015			9,248			8,691			7,365			7,618
General and administrative		2,768			3,119			2,996			2,427			2,618
Sales and marketing		3,655			3,569			3,248			3,325			2,901
Research and development		2,080			1,607			1,443			1,188			1,008
Total operating expenses		8,503			8,295			7,687			6,940			6,527
Operating (loss) income, net		(2,488	)		953			1,004			425			1,091
Impairment of cost in excess of net assets acquired		—			(80	)		—			—			—
Compensation charge coincident to change in control		(969	)		—			—			—			—
Other income (loss), net		(5	)		223			96			(51	)		(108	)
(Loss) income before income tax (benefit) expense		(3,462	)		1,096			1,100			374			983
Income tax (benefit) expense		12			4			(61	)		(244	)		31
Net (loss) income	$	(3,474	)	$	1,092		$	1,161		$	618		$	952
Basic and diluted (loss) income per share	$	(0.58	)	$	0.18		$	0.19		$	0.10		$	0.16

Consolidated Balance Sheet Data:	December 31,
(amounts in thousands)	2008		2007		2006		2005		2004
Working capital	$	4,760	$	6,444	$	5,866	$	4,598	$	4,185
Total assets	$	16,676	$	17,370	$	17,527	$	14,531	$	13,116
Stockholders’ equity	$	6,707	$	9,073	$	7,879	$	6,718	$	6,100

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

Critical Accounting Policies

          Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses 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

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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.

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

          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.

          Bad 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.

          Deferred Income Taxes. The Company has recorded a deferred tax valuation allowance due to uncertainty with regard to the Company’s ability to generate sufficient taxable income in the future to realize a portion of its net deferred tax assets. Due to the net loss in 2008 the Company has increased its deferred tax valuation allowance. However, during 2007 the Company reduced its deferred tax valuation allowance as a result of the positive financial results during 2007 and the previous three years and based upon the Company’s projected ability to generate taxable income in the future.

          Recent Events. During 2004, the Israeli Ministry of Defense (IMOD) implemented a policy temporarily suspending the export of all Israeli military and commercial use products to certain countries in the Far East, which has affected our Israeli subsidiary’s ability to deliver products manufactured for a $1.2 million contract. Although it has received approximately $588,000 of advance payments on that contract, all related activity had been reserved for in the Company’s financial statements. The Company has repaid to the customer the amount of advance payments received. All costs remaining in inventory were charged to cost of revenues in the first quarter of 2008. The Company, in the fourth quarter of 2008, received a $500,000 payment from the IMOD as settlement for costs incurred at the time of the export suspension. That payment net of the costs originally included in cost of revenues is included in other income in the 2008 Consolidated Statements of Operations.

     On May 13, 2008, Orbit-Alchut Technologies, Ltd., (“Alchut”) sold all of its 3.7 million shares of common stock of the Company to Satimo. As part of that transaction, Alchut has agreed to continue to provide services under their service agreement with the subsidiary in Israel for a period of one year after the closing of the transaction. Currently the subsidiary in Israel has signed a lease and is in the process of moving its operations to the new location. The Company anticipates that all the general and administrative services previously provided by Alchut will be in place at the expiration of the one year service agreement on May 13, 2009.

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Results of Operations

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

          Revenues. Revenues for the year ended December 31, 2008 were approximately $23.1 million as compared to approximately $29.3 million for the year ended December 31, 2007 a decrease of approximately $6.2 million. This decrease was due to decreased revenues from the defense market of approximately $3.9 million and the wireless market of $2.7 million. The decrease in revenues was partially offset by increased revenues in the automotive market of approximately $0.5 million. Geographically, revenues from Europe and Asia decreased approximately $5.5 million and $2.7 million, respectively. The decreased revenues in Europe reflect the substantial completion of a large contract for a European customer in 2007. Revenues from North America increased approximately $2.0 million.

          Cost of revenues. Cost of revenues for the year ended December 31, 2008 were approximately $17.1 million compared to approximately $20.0 million for the year ended December 31, 2007, a decrease of approximately $2.9 million reflecting both reduced business and reduced gross margins. Gross margin percentage for the year ended December 31, 2008 decreased to 26.0% from 31.6% for the year ended December 31, 2007. This decrease primarily reflects lower margin Asian business. In addition, the gross margin percentage of the Company’s North America business decreased from 46.4% to 34.9% reflecting lower gross margin on the customer service business. These gross margin decreases were partially offset by an increase in the gross margin of the European business due to the substantial completion of a large contract in the prior year with low gross margin.

          General and administrative expenses. General and administrative expenses for the year ended December 31, 2008 were approximately $2.8 million, compared to approximately $3.1 million for the year ended December 31, 2007. As a percentage of revenues, general and administrative expenses for the year ended December 31, 2008 increased to 12.0% from 10.6% for the year ended December 31, 2007. . This reduction of general and administrative expenses is due primarily to reduced salaries, fringe benefits and allocated indirect costs such as utilities and freight.

          Sales and marketing expenses. Sales and marketing expenses for the year ended December 31, 2008 were approximately $3.7 million compared to approximately $3.6 million for the year ended December 31, 2007, an increase of approximately $100,000. This increase reflects increased marketing costs, advertising costs and proposal costs.

          Research and development expenses. Research and development expenses for the year ended December 31, 2008 were approximately $2.1 million, compared to approximately $1.6 million for the year ended December 31, 2007, an increase of approximately $500,000. Increased 2008 costs are primarily the result of improvements made to the Company’s software related products and increased efforts to improve the Company’s absorber products.

          Compensation charge. A non-cash charge of $969,000 was recorded by the Company in the twelve month period ended December 31, 2008 related to a payment of such amount by Alchut to the Company’s former CEO, Israel Adan, in consideration of the cancellation of certain stock options held by Mr. Adan and the waiver of Mr. Adan’s right to receive certain payments under his employment agreement with the Company, in each case in connection with the sale of 3.7 million shares of common stock of the Company by Alchut to Satimo on May 13, 2008. The amount paid to Mr. Adan by Alchut has been treated as a capital contribution in the Company’s balance sheet and compensation expense in the Company’s consolidated statement of operations.

          Other (loss) income net. Other (loss) income, net, for the year ended December 31, 2008 was an expense of approximately $5,000 as compared to income of approximately $223,000 in the year ended December 31, 2007, a decrease of approximately $238,000. The decrease in other income, net, is

23

primarily due to increased interest expense as borrowings under the lines of credit have increased, reduced foreign currency transaction gains recognized by the Company’s domestic subsidiaries that have cash deposits and customer billings denominated in Euros, and foreign currency transaction losses recognized by foreign subsidiaries for cash deposits and customer billings denominated in Euros. These amounts were partially offset by income realized by the Company for a payment received by the Israeli Ministry of Defense for reimbursement of cost incurred due to an export suspension of a foreign contract. The amount of payment included is net of the costs originally included in cost of revenues.

          Income taxes. Income tax expense for the year ended December 31, 2008 was approximately $12,000 compared to an income tax expense of $4,000 for the year ended December 31, 2007, an increase of approximately $8,000. The Company records income tax expense on profitable operations and income tax benefits on losses where applicable. As a result of its losses incurred during 2008, the Company increased its valuation allowance related to the deferred income tax benefit resulting from its net operating loss carry forwards by approximately $1.4 million at December 31, 2008.

Liquidity and Capital Resources

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

          Net cash used by operating activities during the years ended December 31, 2008 and December 31, 2007 was approximately $1,756,000 and 802,000, respectively. The net loss for the year ended December 31, 2008 of approximately $3,474,000 reduced by non-cash charges of $363,000 for depreciation expense and $1,108,000 for compensation costs was the largest user of cash. The most significant sources of cash from operations were the decrease of costs and estimated earnings in excess of billings on uncompleted contracts of approximately $647,000, reflecting billings on contracts where revenue has been recognized and the increase in billings in excess of costs and estimated earnings on uncompleted contracts of approximately $1,106,000 which is the result of favorable payment terms on contracts as billings are generated in excess of revenue recognized.

          Net cash used in investing activities for the year ended December 31, 2008 was $144,000 resulting from the purchase of property and equipment of $212,000 offset by the sale of property and equipment of $68,000, as compared to $745,000 used in investing activities in 2007. In 2007, the Company purchased a laser tracker for approximately $250,000. The laser tracker is used to align and calibrate antenna measurement systems. The Company also invested $122,000 for a testing chamber at the Horsham facility.

          The Company made use of its lines of credit to provide cash for its working capital requirements. During the year ended December 31, 2008, the Company increased its borrowings under the lines of credit by $1,207,000 resulting in a total of $1,467,000 outstanding as of December 31, 2008. The amounts outstanding under the domestic line of credit were $648,000 and $0 as of December 31, 2008 and December 31, 2007, respectively. The Company’s domestic line of credit expires on April 30, 2009. The Company anticipates that the line of credit will be renewed on or before April 30, 2009. The Company has established lines of credit with the two Israeli banks. Both lines of credit have NIS denominated limits of 7,000,000 and 1,500,000 respectively. The interest rates charged by both banks are LIBOR plus 2.25%. The outstanding balance due at December 31, 2008 and 2007 was $819 and $260 respectively. These lines of credit are collateralized by the assets of Orbit Engineering, LTD. a subsidiary of Orbit/FR, Inc.

          The Company has exposure to currency fluctuations as a result of billing certain of its contracts in foreign currency. When selling to customers in countries with less stable currencies, the Company bills in U.S. dollars. For the year ended December 31, 2008, approximately 81% of the Company’s revenues were billed in U.S. dollars. Most of the costs of the Company’s contracts, including costs subcontracted to the former Parent, have been, and will continue to be, U.S. dollar-denominated except for wages for employees of the Company’s Israeli and German subsidiaries, which are denominated in local currency. The Company intends to continue to enter into U.S. dollar-denominated contracts.

24

Inflation and Seasonality

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

Impact of Recent Accounting Pronouncements

               In September 2006, FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, established a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The transition adjustment, measured as the difference between the carrying amounts and the fair values of those financial instruments at the date this Statement is initially applied, should be recognized as a cumulative effect adjustment to the opening balance of retained earnings for the fiscal year in which this Statement is initially applied. The adoption of this Statement did not have any immediate material impact on the Company.

          In February 2007, the Financial Accounting Standards Board (“FASB”) issued statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115.” This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The fair value option established by this statement permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity reports its unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement was effective as of the beginning of the Company’s year ended December 31, 2008 and did not have any material impact on the Company’s financial position and results of operations.

          In December 2007, the Financial Accounting Standards Board (“FASB”) simultaneously issued SFAS No. 141R, “Business Combinations (2007 Amendment),” and SFAS 160, “Non-controlling Interests in Consolidated Financial Statements, an Amendment of ARB 51.” Both standards update United States guidance on accounting for “non-controlling interests,” sometimes referred to as minority interests, which interests represent a portion of a subsidiary not attributable, directly or indirectly, to a parent. In consolidated financial statements SFAS 160 requires this identification of ownership interests held in subsidiaries by parties other than the parent be clearly identified, labeled and presented in consolidated financial position within equity (rather than ”mezzanine” between liabilities and equity) separately from amounts attributed to the parent, with net income attributable to the parent and to the minority interests clearly identified and presented on the face of consolidated statement of income. The standards also provide guidance in situations where the parent’s ownership interest in a subsidiary changes while the parent retains its controlling financial interest. SFAS 160 also provides guidance on recording a gain or loss based on fair value in situations involving deconsolidation of a subsidiary. Entities must provide sufficient disclosures that distinguish between interests of the parent and that of the non-controlling interest. Both standards are effective for fiscal years and interims beginning on or after December 15, 2008 (that is January 1, 2009) for entities with calendar years. Earlier adoption is prohibited. Management is evaluating the impact these standards will have on the Company’s financial position and results of operations, but they are not expected to have any immediate impact at the date of adoption since all subsidiaries are currently 100% owned.

          Management does 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.

25

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

          See Item 7 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” above.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The reports of independent registered public accounting firms and consolidated financial statements and schedule are set forth in this report beginning on page F-1.

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

          None.

ITEM 9A(T). CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. 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, 2008. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2008, these controls and procedures were effective.

(b) Change in Internal Controls. 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.

          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

26

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.

          Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, 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, 2008, the Company’s internal control over financial reporting is effective.

          This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary 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.

          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, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

27

PART III

          The information required to be disclosed under Part III of this Annual Report on Form 10-K will be provided by the Company in an amendment to this Form 10-K to be filed by the Company with the Commission no later than April 29, 2009.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE

(a)(1) Consolidated Financial Statements

	Independent Auditors’ Reports
	Auditors’ Report to the Shareholders of ORBIT/FR Engineering, LTD.
	Consolidated Balance Sheets at December 31, 2008 and 2007
	Consolidated Statements of Operations for the years ended December 31, 2008 and 2007
	Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008 and 2007
	Consolidated Statements of Cash Flows for the years ended December 31, 2008 and 2007
	Notes to Consolidated Financial Statements
(a)(3)	Exhibits
	The exhibits filed as part of this report are listed under exhibits as subsection (c) of this Item 15.

(b) Exhibits

2.1	Stock Purchase Agreement dated March 31, 1997 by and among Advanced ElectroMagnetics, Inc., Anechoic Systems, Inc., Gabriel A. Sanchez, Barbara Sanchez and the Company. (1)
2.2	Share Exchange Agreement dated December 31, 1996 by and among Orbit-Alchut Technologies, Ltd., Orbit Advanced Systems, Ltd. and the Company. (1)
2.3	Asset Acquisition Agreement dated December 31, 1996 by and between Orbit-Alchut Technologies, Ltd. and Orbit F.R. Engineering, Ltd. (1)
2.4	Inventory Acquisition Agreement dated January 1, 1997 by and between Orbit-Alchut Technologies, Ltd. and Orbit F.R. Engineering, Ltd. (1)
2.5	Stock Purchase Agreement dated June 28, 1996 by and among Orbit Advanced Technologies, Inc., The Samuel T. Russell Trust, Richard P. Flam, Rickey E. Hartman, Lois A. R. Charles, Dorothy Russell, John Aubin, Norma D. Kegg and Flam & Russell, Inc. (1)
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)
10.1*	Employment Agreement dated February 15, 1997 by and between the Company and Aryeh Trabelsi. (1)

28

10.2*	Employment Agreement dated January 1, 1997 by and between the Company and Moshe Pinkasy. (1)
10.3	1997 Equity Incentive Plan. (1)
10.4	Services Agreement dated January 1, 1997 by and among Orbit-Alchut Technologies, Ltd., Orbit F.R. Engineering, Ltd. and the Company. (1)
10.5	ORBIT/FR Inc. non-debarment agreement dated February 15, 2000 (4)
10.6	Consulting agreement dated July 24, 2002 by and between the Company and Gurion Meltzer. (5)
10.7*	Employment Agreement dated September 5, 2002 by and between the Company and Ze’ev Stein. (5)
10.8*	Amended and Restated Employment Agreement dated June 20, 2003 by and between the Company and Israel Adan (5)
10.9	Management Agreement dated January 1, 2003 by and between the Company and Ze’ev Stein Properties, LTD. (6)
10.10	Consent Agreement. (8)
10.11*	Employment Agreement dated December 16, 2008 by and between the Company and Per Iversen.
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 Hoberman, Miller, Goldstein & Lesser, CPA’s, P.C.
23.3	Consent of Kost, Forer Gabbay & Kasierer.
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.

*	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

29

ORBIT/FR, Inc.

SIGNATURES

          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.

	ORBIT/FR, Inc
Date: April 15, 2009	/s/ Philippe Garreau
	Philippe Garreau
	Chairman of the Board

          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-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 14^st day of April 2009.

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	Director

30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and
Board of Directors
Orbit/Fr, Inc.

     We have audited the consolidated balance sheet of Orbit/FR, Inc. and Subsidiaries as of December 31, 2008 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year 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 audit. We did not audit the financial statements of Orbit/FR Engineering, LTD., a wholly owned subsidiary, which statements reflect total assets of $7,532,000 as of December 31, 2008 and total revenues of $9,009,000 for the year then ended. Those statements were audited by other auditors whose report has 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 report of the other auditors.

     We conducted 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 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, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion.

     In our opinion, based on our audit and the report 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, 2008 and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Cornick, Garber & Sandler, LLP

April 13, 2009
New York, NY

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and
Board of Directors
Orbit/FR, Inc.

We have audited the consolidated balance sheet of Orbit/FR, Inc. and Subsidiaries as of December 31, 2007 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year 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 audit. We did not audit the financial statements of Orbit/FR Engineering, Ltd., a wholly owned subsidiary, which statements reflect total assets of $7,944,000 as of December 31, 2007 and total revenues of $14,530,000 for the year then ended. Those statements were audited by other auditors whose report has 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 report of the other auditors.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United Sates). Those standards require that we plan and perform the audits 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, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report 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, 2007, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Hoberman, Miller, Goldstein, & Lesser, CPA’s, P.C.

March 14, 2008
New York, NY

F-2

n Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 67067, Israel n Phone: 972-3-6232525
Fax: 972-3-5622555

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

ORBIT/FR ENGINEERING, LTD.

          We have audited the accompanying balance sheets of Orbit/Fr Engineering, Ltd. (“the Company”) as of December 31, 2008 and 2007, and the related statements of income, changes in shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2008. 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 audits.

          We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s 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, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

Tel-Aviv, Israel	/S/ KOST FORER GABBAY & KASIERER
March 31, 2009	A Member of Ernst & Young Global

F-3

ORBIT/FR, Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

	December 31,
	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	1,521		$	2,214
Accounts receivable, less allowance of $45 and $215 in 2008 and 2007, respectively		7,660			6,790
Inventory		2,353			2,437
Costs and estimated earnings in excess of billings on uncompleted contracts		1,445			2,092
Income tax refunds receivable		440			263
Deferred income taxes		1,011			670
Other		299			275
Total current assets		14,729			14,741
Property and equipment, net		1,319			1,541
Deferred income taxes		327			787
Cost in excess of net assets acquired		301			301
Total assets	$	16,676		$	17,370
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,174		$	2,555
Accounts payable—current and former ultimate parent		95			717
Accrued expenses		3,364			3,062
Short-term bank financing		1,467			260
Customer advances		675			495
Billings in excess of costs and estimated earnings on uncompleted contracts		2,070			964
Deferred income taxes		124			244
Total liabilities, all current		9,969			8,297
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		16,383			15,275
Accumulated deficit		(9,494	)		(6,020	)
Treasury stock—82,900 shares, at cost		(243	)		(243	)
Total stockholders’ equity		6,707			9,073
Total liabilities and stockholders’ equity	$	16,676		$	17,370

See accompanying notes.

F-4

ORBIT/FR, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)

	Years Ended December 31,
	2008			2007
Contract revenues	$	23,118		$	29,292
Cost of revenues		17,103			20,044
Gross profit		6,015			9,248
Operating expenses:
General and administrative		2,768			3,119
Sales and marketing		3,655			3,569
Research and development		2,080			1,607
Total operating expenses		8,503			8,295
Operating (loss) income		(2,488	)		953
Impairment of costs in excess of net assets acquired		—			(80	)
Compensation charge coincident to change in control		(969	)		—
Other (loss) income, net		(5	)		223
(Loss) income before income tax (benefit) expense		(3,462	)		1,096
Income tax expense		12			4
Net (loss) income	$	(3,474	)	$	1,092
Basic and diluted (loss) income per share	$	(0.58	)	$	0.18
Weighted average number common shares — basic		6,001,573			6,001,573
Weighted average number common shares – diluted		6,001,573			6,057,609

See accompanying notes.

F-5

ORBIT/FR, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Shares and amounts in thousands)

					Additional										Total
	Common Stock				Paid-in		Accumulated			Treasury Stock					Stockholders’
	Shares		Amount		Capital		Deficit			Shares		Amount			Equity
Balance, January 1, 2007		6,084	$	61	$	15,173	$	(7,112	)		83	$	(243	)	$	7,879
Net income		—		—				1,092			—		—			1,092
Stock based compensation		—		—		102		—			—		—			102
Balance, December 31, 2007		6,084		61		15,275		(6,020	)		83		(243	)		9,073
Net (loss)		—		—		—		(3,474	)		—		—			(3,474	)
Compensation charge coincident to change in control						969										969
Stock-based compensation		—		—		139		—			—		—			139
Balance, December 31, 2008		6,084	$	61	$	16,383	$	(9,494	)		83	$	(243	)	$	6,707

See accompanying notes.

F-6

ORBIT/FR, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

	Year Ended December 31,
	2008			2007
Cash flows from operating activities:
Net (loss) income	$	(3,474	)	$	1,092
Adjustments to reconcile results of operations to net cash (used in) provided by operating activities:
Depreciation		363			390
Loss (gain) on disposal of fixed assets		3			(15	)
Non-cash and stock-based compensation		1,108			102
Impairment of costs in excess of net assets acquired		—			80
Deferred income tax provision		—			(207	)
Changes in operating assets and liabilities:
Accounts receivable		(871	)		(1,021	)
Inventory		84			719
Costs and estimated earnings in excess of billings on uncompleted contracts		647			(612	)
Income tax refunds receivable		(176	)		72
Other current assets		(24	)		(124	)
Accounts payable and accrued expenses		(79	)		593
Accounts payable—current and former ultimate parent		(623	)		(116	)
Income taxes payable		—			(47	)
Customer advances		180			(1,737	)
Billings in excess of costs and estimated earnings on uncompleted contracts		1,106			29
Net cash (used in) operating activities		(1,756	)		(802	)
Cash flows from investing activities:
Proceeds from sale of property and equipment		68			—
Purchase of property and equipment		(212	)		(745	)
Net cash (used in) investing activities		(144	)		(745	)
Cash flows from financing activities
Proceeds from short term bank financing		1,507			460
Repayments of short term bank financing		(300	)		(600	)
Net cash (used in) provided by financing activities		1,207			(140	)
Net (decrease) in cash and cash equivalents		(693	)		(1,687	)
Cash and cash equivalents at beginning of year		2,214			3,901
Cash and cash equivalents at end of year	$	1,521		$	2,214
Supplemental disclosures of cash flow information:
Net cash paid during the year for income taxes	$	308		$	84
Net cash paid during the year for interest	$	42		$	25

See accompanying notes.

F-7

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

1. Summary of Significant Accounting Policies

Ownership and Basis of Presentation

          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, a publicly traded company 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 world wide 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).

Principles of Consolidation

          The consolidated financial statements include the accounts of 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.

Use of Estimates

          The 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

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

Accounts Receivable

          The Company accounts for potential losses in accounts receivable utilizing the allowance method. In reviewing aged receivables, management considers their knowledge of customers, historical losses and current economic conditions in establishing the allowance for doubtful accounts.

Inventory

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

F-8

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

1. Summary of Significant Accounting Policies (continued)

Property and Equipment

          Property and equipment are 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.

Cost in Excess of Net Assets Acquired

          Cost in excess of net assets acquired (“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.

          The Company tested the goodwill of AEMI for impairment at December 31, 2008 and 2007 using the present value of future cash flow valuation method. In 2007, the Company recorded impairment charge to goodwill of $80. No adjustment for the value of goodwill was necessary in 2008.

Revenue and Cost Recognition

          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. 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 from electro-mechanical equipment sold to customers which are not part of a larger contract are recognized when the contract is substantially completed. 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 received from clients in excess of revenues recognized to date are classified under current liabilities as billings in excess of costs and estimated earnings on uncompleted contracts.

Research and Development

          Internally funded research and development costs are charged to operations as incurred. Included in cost of revenues are customer-funded research and development costs of approximately $33 and $203 for the years ended December 31, 2008 and 2007, respectively. Other research and development costs are separately reflected in the Consolidated Statement of Operations.

Concentrations of Credit Risk and Significant Customers

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

F-9

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

1. Summary of Significant Accounting Policies (continued)

     The Company maintains cash and cash equivalents with various major commercial institutions in the U.S. and overseas. At December 31, 2008, cash balances that are either uninsured under the Federal Deposit Insurance Corporation coverage limit of $250,000 per financial institution, or are located overseas without such type of insurance coverage, totaled approximately $1,148. The Company does not anticipate credit risk in connection with its concentration of cash.

     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, 2008, there were eight bank guarantees in place for foreign customers with an aggregate value of approximately $1,998. For the years ended December 31, 2008 and December 31, 2007, one customer accounted for approximately 6% and 18%, respectively, of consolidated revenues.

Warranty Expense

     The Company provides for warranty costs on sales of its own product. Product warranty periods generally extend for one year from the date of sale.

Income Taxes

     The 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.

     Effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no adjustments required upon adoption of FIN 48.

F-10

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

1. Summary of Significant Accounting Policies (continued)

Foreign Currency Translation

     The Company’s functional currency for operations in Israel is the U.S. dollar. The Company’s functional currency for operations of its German subsidiary is the Euro. Foreign currency transaction gains and losses net, both realized and unrealized, are recognized currently in the consolidated statements of operations. Unrealized gains and losses arising from the translation of financial statements in consolidation, which would be recognized in “other comprehensive income” within stockholders’ equity, historically have not been material and have been omitted.

     For the years ended December 31, 2008 and 2007, approximately 19% and 20%, respectively, of the Company’s revenue was billed in currencies other than the U.S. dollar. Substantially all of the costs of the Company’s contracts, including costs subcontracted to Alchut, have been U.S. dollar denominated transactions.

Income (Loss) Per Share Amounts

     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 dilutive effect of stock options. The effect of outstanding stock options on net losses would be anti-dilutive and is not included in the presentation of diluted loss per share.

Stock-Based Compensation

     The 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 SFAS No. 123. Effective January 1, 2006, the Company adopted the fair value provisions for share-based awards pursuant to SFAS No. 123(R), and compensation costs for 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 SFAS No. 123(R) and recognized on a straight line basis over the shorter of the vesting or requisite service periods.

Fair Value of Financial Instruments

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

F-11

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

1. Summary of Significant Accounting Policies (continued)

Impact of Recent Accounting Pronouncements

     In September 2006, FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, established a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The transition adjustment, measured as the difference between the carrying amounts and the fair values of those financial instruments at the date this Statement is initially applied, should be recognized as a cumulative effect adjustment to the opening balance of retained earnings for the fiscal year in which this Statement is initially applied. The adoption of this Statement did not have any immediate material impact on the Company.

     In February 2007, the Financial Accounting Standards Board (“FASB”) issued statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115.” This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The fair value option established by this statement permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity reports its unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This Statement was effective as of the beginning of the Company’s year ended December 31, 2008 and did not have any material impact on the Company’s financial position and results of operations.

     In December 2007, the Financial Accounting Standards Board (“FASB”) simultaneously issued SFAS No. 141R, “Business Combinations (2007 Amendment),” and SFAS 160, “Non-controlling Interests in Consolidated Financial Statements, an Amendment of ARB 51.” Both standards update United States guidance on accounting for “non-controlling interests,” sometimes referred to as minority interests, which interests represent a portion of a subsidiary not attributable, directly or indirectly, to a parent. In consolidated financial statements SFAS 160 requires this identification of ownership interests held in subsidiaries by parties other than the parent be clearly identified, labeled and presented in consolidated financial position within equity (rather than “mezzanine” between liabilities and equity) separately from amounts attributed to the parent, with net income attributable to the parent and to the minority interests clearly identified and presented on the face of consolidated statement of income. The standards also provide guidance in situations where the parent’s ownership interest in a subsidiary changes while the parent retains its controlling financial interest. SFAS 160 also provides guidance on recording a gain or loss based on fair value in situations involving deconsolidation of a subsidiary. Entities must provide sufficient disclosures that distinguish between interests of the parent and that of the non-controlling interest. Both standards are effective for fiscal years and interims beginning on or after December 15, 2008 (that is January 1, 2009) for entities with calendar years. Earlier adoption is prohibited. Management is evaluating the impact these standards will have on the Company’s financial position and results of operations, but they are not expected to have any immediate impact at the date of adoption since all subsidiaries are currently 100% owned.

F-12

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

     Management does 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.

2. Inventory

    Inventory consists of the following:

	December 31,
	2008		2007
Work-in-process	$	273	$	637
Parts and components		2,080		1,800
Total	$	2,353	$	2,437

3. Property and Equipment

    Property and equipment consists of the following:

	December 31,
	2008		2007
Lab and computer equipment	$	2,709	$	2,642
Office equipment		943		808
Transportation equipment		45		130
Furniture and fixtures		10		10
Fixed assets in process		—		14
Leasehold improvements		140		138
		3,847		3,742
Less accumulated depreciation		2,528		2,201
Property and equipment, net	$	1,319	$	1,541

F-13

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

4. Accrued Expenses

    Accrued expenses consist of the following:

	December 31,
	2008		2007
Contract costs	$	298	$	152
Compensation		1,433		1,665
Commissions		465		299
Royalties		58		56
Warranty		308		384
Customer advances and deferred revenue		433		108
Other		369		398
Total	$	3,364	$	3,062

5. Short Term Bank Financing

     The Company’s $1,250 domestic line of credit with interest payable on the outstanding balance at the bank’s prime rate plus one half percent (3.75% at December 31, 2008), expires on April 30, 2009. The outstanding balance due at December 31, 2008 and 2007 was $648 and $0, respectively. The line of credit is collateralized by the assets of Orbit Advanced Technologies, Inc. a subsidiary of Orbit/FR, Inc. The Company anticipates that the line of credit will be renewed on or before April 30, 2009. Loans under this line of credit are also subject to a subjective acceleration clause. The Company has established lines of credit with the two Israeli banks. Both lines of credit have NIS denominated limits of 7,000 and 1,500, respectively. The interest rates charged by both banks are LIBOR plus 2.25%. The outstanding balance due at December 31, 2008 and 2007 was $819 and $260, respectively. The bank agreements with both 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 Engineering, LTD., a subsidiary of Orbit/FR, Inc.

6. Related Party Transactions

     Engineering and Alchut have an agreement, whereby Engineering purchases from Alchut electrical and mechanical production services. In addition, Alchut provides other administrative services, including but not limited to, bookkeeping, computer, legal, accounting, cost management, information systems, and production support. Engineering pays Alchut for these services based upon a rate of cost of production services plus 18%. Engineering has been leasing office space from Alchut on an annual basis, for a rental of $73 per year. These agreements are to be evaluated on an annual basis, and are intended to be at market value.

     On May 13, 2008, Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo. As part of that transaction, Alchut has agreed to continue to provide the services for a period of one year after the closing of the transaction. The subsidiary in Israel has signed a lease and is in the process of moving its operations to the new location. The Company anticipates that all the general and administrative services previously provided by Alchut will be in place at the expiration of the one year service agreement, May 13, 2009. In February 2009, the Company provided Alchut the required three months termination notice which after the notice period, allows the Company to use any subcontractor including Alchut.

F-14

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

6. Related Party Transactions (continued)

     The Company was charged $357 and $187 in 2008 and 2007, respectively, by Alchut for administrative services. In addition, an Israeli corporation wholly-owned by the Company’s former Chairman of the Board, charged $55 and $133 to the Company under a management services agreement in 2008 and 2007, respectively. This agreement was terminated on May 13, 2008 when Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo. A non-cash charge of $969,000 was recorded by the Company in the three month period ended June 30, 2008 related to a payment by Alchut to the Company’s former CEO in consideration of the cancellation of certain stock options held by him and the waiver of his right to receive certain payments under his employment agreement with the Company, in each case in connection with the sale of 3.7 million shares of common stock of the Company by Alchut to Satimo on May 13, 2008. The amount paid to the former CEO has been treated as a capital contribution in the Company’s balance sheet and compensation expense in the consolidated statement of operations.

     Included in cost of revenues for the years ended December 31, 2008 and 2007 are approximately $1,041 and $1,261, respectively, relating to the production services provided by Alchut.

     Included in sales and cost of revenues for the year ended December 31, 2008 are approximately $98 and 238, respectively, relating to sales to and purchases from Satimo, subsequent to May 13, 2008.

7. Commitments and Contingencies

     The Company leases its operating facilities and certain equipment under non-cancelable operating lease agreements which expire in various years through 2015. Rent expense for the years ended December 31, 2008 and 2007 was approximately $634 and $616, respectively. Future minimum lease payments under non-cancelable operating leases with initial terms of one year or more are as follows:

Year ending December 31:
2009	$	402
2010		402
2011		392
2012		314
2013		171
Thereafter		330
Total	$	2,011

     As a result of the Company’s Consent Agreement with the Office of Defense Trade Controls Compliance, Director of Defense Trade Controls, (DDTC), which settled its statutory debarment prohibiting direct and indirect exports of International Trade in Arms Regulations products, the Company has agreed to pay a penalty of $100 in three equal annual installments. In 2007 the final installment of $33 was paid.

     Under the terms of the Chief Scientist grant, the Company is obligated to pay royalties at a rate of 2% of revenues generated from the sale of certain products up to the amount of the grant. For the years ended December 31, 2008 and 2007, royalties under this program were approximately $1 and $4, respectively. At December 31, 2008, the Company had an outstanding contingent obligation to the Chief Scientist of $503. Such contingent obligation is payable in future periods based upon annual sales of products developed under the grants.

     At December 31, 2008, the Company has outstanding letters of credit in the favor of customers and a landlord totaling $1,998.

F-15

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

8. Segment and Geographic Information

     The Company operates exclusively in one industry segment, the business of developing, marketing and supporting sophisticated automated microwave test and measurement systems. 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, 2008 and 2007.

	North America		Europe		Asia		Total
2008
Sales to unaffiliated customers	$	12,169	$	4,610	$	6,339	$	23,118
Cost of revenues to unaffiliated customers		7,917		3,586		5,600		17,103
Gross profit unaffiliated customers	$	4,252	$	1,024	$	739	$	6,015
Net property and equipment	$	615	$	704	$	—	$	1,319
Total assets	$	9,446	$	7,230	$	—	$	16,676
2007
Sales to unaffiliated customers	$	10,129	$	10,126	$	9,037	$	29,292
Cost of revenues to unaffiliated customers		5,425		8,445		6,174		20,044
Gross profit unaffiliated customers	$	4,704	$	1,681	$	2,863	$	9,248
Net property and equipment	$	702	$	839	$	—	$	1,541
Total assets	$	10,432	$	6,938	$	—	$	17,370

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

9. Income Taxes

     Pretax (loss) income for the years ended December 31 was applicable to the following jurisdictions:

	2008			2007
Domestic	$	(2,446	)	$	666
Foreign		1,016	)		430
Total	$	(3,462	)	$	1,096

F-16

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

9. Income Taxes (continued)

     The tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities consist of the following:

	December 31,
	2008			2007
Deferred tax assets:
U.S. net operating loss and tax credit carryforwards	$	3,258		$	2,305
Allowance for doubtful accounts		16			78
Accrued warranty reserves		56			49
Inventory reserve		8			8
Accrued compensation		95			78
Stock-based compensation		85			—
Unearned service revenue		65			37
Foreign, including German and Israel net operating loss carryforwards		1,227			963
Total deferred tax assets		4,810			3,518
Deferred tax liabilities:
Long-term contracts		—			(120	)
Purchase accounting basis differences		(124	)		(124	)
Total deferred tax liabilities		(124	)		(244	)
Net deferred tax asset		4,686			3,274
Less valuation allowance		(3,472	)		(2,061	)
Net deferred tax asset	$	1,214		$	1,213

     As of December 31, 2008, the Company has net operating loss carryforwards of approximately $9,482 for U.S. federal income tax purposes which expire through 2024. On May 13, 2008, Alchut sold all of its 3.7 million shares of common stock of the Company to Satimo. Due to the change in ownership of the Company utilization of these net operating loss carryforwards are limited pursuant to Section 382 of the Internal Revenue Code to approximately $1,315 a year, plus any losses incurred after May 13, 2008. The Company also has a German net operating loss carryforward of approximately $1,751 and an Israeli net operating loss carryforward of approximately $305, both of which will be available indefinitely.

     Also, as of December 31, 2008, the Company has net operating loss carryforwards of approximately $283 and tax credits of approximately $114, which the Company acquired in its acquisition of Flam & Russell, Inc. The tax benefit of these losses and credits may also be limited both in time and amount due to limitations imposed by Section 382 of the Internal Revenue Code. These net operating loss and credit carryforwards expire during in 2009.

     In 2008, the Company increased its valuation allowance on its deferred tax asset by $1,411 due to the uncertainty with regard to the Company’s ability to continue to generate sufficient taxable income in the U.S. Israel and Germany in the future to realize a portion of its deferred tax assets.

F-17

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

9. Income Taxes (continued)

The components of income tax expense are as follows:

	Year ended December 31,
	2008		2007
Current:
State and local taxes within the U.S.	$	12	$	28
Foreign		—		183
Total		12		211
Deferred:
Federal		—		(80	)
Foreign		—		(127	)
Total		—		(207	)
Total income tax expense (benefit)	$	12	$	4

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

	Year ended December 31,
	2008			2007
Tax (benefit) expense at statutory U.S. Federal rate	$	(1,166	)	$	373
Losses for which no tax benefit was recognized		1,125			—
Utilization of foreign loss carryforwards		(39	)		—
Book/tax differences		—			(56	)
(Decrease) in deferred tax valuation allowance		—			(310	)
Foreign tax rate difference to U.S. tax rate		80			(28	)
State and local taxes within the U.S.		8			28
Other, net		4			(3	)
Total income tax expense	$	12		$	4

F-18

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

10. Retirement Plans

     The Company has retirement plans which cover substantially all U.S. employees who have attained the age of 21 and have completed 3 months of service. Eligible employees make voluntary contributions to the plans up to specified percentages of their annual compensation as defined in the plans. Under the plans, the Company makes discretionary matching contributions determinable each plan year and additional contributions based on annual eligible compensation for each participant. The plans are funded on a current basis. For the years ended December 31, 2008 and 2007, the Company’s contributions to the plans were $51 and $55, respectively.

11. Long-Term Contracts

     Long-term contracts in process accounted for using the percentage-of-completion method are as follows:

	December 31,
	2008			2007
Accumulated expenditures on uncompleted contracts	$	35,168		$	33,949
Estimated earnings thereon		9,158			8,992
		44,326			42,941
Less: applicable progress billings		44,951			41,813
Total	$	(625	)	$	1,128
The long-term contracts are shown in the accompanying balance sheets as follows:
Costs and estimated earnings on uncompleted contracts in excess of billings	$	1,445		$	2,092
Billings on uncompleted contracts in excess of costs and estimated earnings		(2,070	)		(964	)
Total	$	(625	)	$	1,128

12. Stock Option Plan

     In March 1997, the Board of Directors adopted, and the Company’s stockholders approved, the Company’s 1997 Equity Incentive Plan (the “Incentive Plan”) which provides for awards of 800,000 shares of the Company’s stock. Options granted generally vest over five years and typically have a life of ten years. The purpose of the Incentive Plan is to promote the long-term retention of the Company’s key employees and certain other persons who are in a position to make significant contributions to the success of the Company. The Incentive Plan permits grants of incentive stock options (“ISOs”), options not intended to qualify as ISOs (“nonqualified options”), stock appreciation rights (“SARs”), restricted, unrestricted and deferred stock awards, performance awards, loans and supplemental cash awards, and combinations of the foregoing (all referred to as “Awards”).

     Effective December 31, 2005, the Board of Directors approved acceleration of the vesting of all outstanding unvested options so that all such options shall be deemed fully vested as of that date.

F-19

ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

12. Stock Option Plan (continued)

     On March 13, 2007, the Board of Directors amended the Plan increasing the number of shares of common stock under the Plan from 800,000 to 1,200,000. In addition, the Board of Directors amended the Plan extending its duration indefinitely with the stipulation that ISO’s will no longer be granted under the Plan.

     In July of 2007, the Board of Directors approved two grants of non qualified stock options for 84,300 and 435,100 shares to key employees, management and Board members of the Company. These grants resulted in stock-based compensation expense of $128 and $102 for the years ended December 31, 2008 and December 31, 2007, respectively.

     In March of 2008, the Board of Directors approved a grant of non-qualified stock options for 30,000 shares to the Company’s Chief Financial Officer. This grant resulted in stock-based compensation of $11 for the year ended December 31, 2008.

     Detailed information concerning the Stock Option Plan is as follows at December 31:

	2008					2007
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Options			Price		Options			Price
Options authorized		1,200,000					1,200,000
Outstanding, beginning of year		1,040,100		$	2.44		690,200		$	2.95
Options granted		30,000			2.55		519,400			1.95
Options forfeited		(587,400	)		2.45		(169,500	)		3.00
Options outstanding, end of year		482,700			2.44		1,040,100			2.44
Options exercisable, end of year		249,425		$	2.72		505,700		$	2.93
Weighted average remaining contractual life (years)					6.69					6.61
Weighted average fair value of options granted at market value				$	2.55				$	—
Range of exercise prices per share, options outstanding				$	1.35-$6.63				$	1.35-$6.63

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ORBIT / FR, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)

12. Stock Option Plan (continued)

     The Company uses the Black-Scholes option valuation model for use in estimating the fair value of its stock options. This model was developed for traded options which have no vesting restrictions and are fully transferable. Option models require input of highly subjective assumptions including future stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective assumptions can materially affect the fair value estimates, in management’s opinion, the Black-Scholes model does not necessarily provide a reliable measure of the fair value the Company’s stock options.

     The following weighted-average significant assumptions were utilized by the Company in ascertaining the fair value of its options issued each year.

	2008			2007
Risk free interest rate		4.3	%		5.5	%
Dividend yield		0.0	%		0.0	%
Volatility factor of expected price of the Company’s common stock (average)		8.0	%		6.23	%
Average life (years)		7.0			7.0

13. Stockholders’ Equity

Common Stock

     The holders of shares of Common Stock are entitled to one vote for each share on record on any matters to be voted on by the stockholders. The holders of Common Stock are entitled to receive dividends if declared by the Board of Directors and to share ratably in the assets of the Company legally available for distribution to its stockholders in the event of liquidation, dissolution or winding-up of the Company. Holders of Common Stock have no preemptive, subscription, redemption or conversion rights.

Preferred Stock

     The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of shares of Preferred Stock in series and may, at the time of issuance, determine the rights, preferences and limitations of each series. The holders of Preferred Stock would normally be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the Common Stock. The issuance of Preferred Stock could decrease the amount of earnings and assets available for distribution to the holders of Common Stock or could adversely affect the rights and powers, including voting rights, of the holders of Common Stock.

Treasury Stock

     On June 24, 1998, the Company’s Board approved the repurchase of up to 300,000 shares of its stock. The Company has repurchased 82,900 shares for $243 through December 31, 2008.

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EX-10.11

EXHIBIT 10.11

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of the 2nd day of June, 2008 by and between Per O. Iversen, a resident of Atlanta (the “Employee”), and Orbit/FR, Inc., a Delaware corporation (the “Company”).

          WHEREAS, Employee is employed by the Company as its President and CEO and the parties wish to enter into this Agreement to govern the continuing terms of such employment.

          NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and intending to be legally bound, the parties, subject to the terms and conditions set forth herein, agree as follows:

     1. Employment and Term. The Company hereby employs Employee, and Employee hereby accepts employment with the Company, as President and Chief Executive Office (the “Position”) for a period (the “Term”) commencing on the date hereof and continuing until terminated pursuant to the provisions of Section 8 hereof.

     2. Duties. During the Term, Employee shall serve the Company faithfully and to the best of his ability and shall devote his full time, attention, skill and efforts to the performance of the duties required by or appropriate for the Position. Employee will be reporting directly to the Company’s Chairman and Board of Directors.

     3. Other Business Activities. During the Term, Employee will not, without the prior written consent of the Board of Directors of the Company in its sole discretion, directly or indirectly engage in any other business activities or pursuits whatsoever, except activities in connection with charitable or civic activities, personal investments and serving as an executor, trustee or in other similar fiduciary capacity; provided, that such activities do not interfere with his performance of his responsibilities and obligations pursuant to this Agreement.

     4. Compensation. The Company shall pay Employee, and Employee hereby agrees to accept, as compensation for all services rendered hereunder and for Employee’s covenants provided for in Sections 5, 6 and 7 hereof, the compensation set forth in this Section 4.

          4.1. Base Salary. The Company shall pay Employee a base salary at the annual rate of One Hundred Fifty thousand dollars ($150,000) (the “Base Salary”). The Base Salary shall be inclusive of all applicable income and other taxes and charges that are required by law to be withheld by the Company, are requested to be withheld by Employee, and shall be

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withheld and paid in accordance with the Company’s normal payroll practice for its similarly situated employees from time to time in effect.

          4.2. Bonus Program. Employee may be entitled to an annual bonus (the “Bonus”) based upon the achievement (during any calendar year) of such written individual and corporate annual objectives (the “Objectives”) as the Board of Directors may from time to time establish. Employee acknowledges that such Objectives may be amended from time to time without Employee’s consent. Employee further acknowledges that any Bonus shall be deemed earned on the last day of the applicable calendar year and shall be payable to Employee by the end of the first quarter of the following calendar year, except as expressly otherwise set forth in Section 8 hereof in connection with a pro-rata payment upon termination.

          4.3. Fringe Benefits. Employee shall be entitled to participate in any health, life and disability insurance, 401(k) and other fringe benefit programs (collectively the “Benefits”) of the Company in effect from time to time.

          4.4. Reimbursement of Expenses. Employee shall be reimbursed for all normal items of travel and entertainment and miscellaneous expenses reasonably incurred by him on behalf of Company, provided that such expenses are documented and submitted to the Company all in accordance with the reimbursement policies of the Company as in effect from time to time.

          4.5. Paid Personal Leave. Employee shall be entitled to an aggregate of 25 paid personal leave days per year (prorated for any partial contract year). Personal leave can be taken for vacation or illness; provided that except in the case of illness, personal leave shall be taken at times determined by mutual agreement of Employee and the Chairman.

          4.6. Relocation. Employee acknowledges that he would be required to relocate to the Company’s principal place of employment in Horsham, PA (the “Relocation”). Upon the Relocation, the Company shall reimburse Employee for the following expenses actually incurred by Employee in connection with the Relocation (without any tax gross-up) up to an aggregate amount of [$585,000]:

               4.6.1. One-way travel costs from Atlanta to Philadelphia for Employee, his spouse and children;

               4.6.2. Temporary housing if required for period not to exceed 7 days;

               4.6.3. Miscellaneous expenses that are a direct result of the Relocation (taxis, parking, etc).

               4.6.4. Transfer of Employee’s household goods from Atlanta to Horsham.

               4.6.5. Realtor fees related to the sale of Employee’s home in Atlanta.

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               4.6.6. In the event Employee is unable to independently sell his home in Atlanta by October 10, 2008, the Company shall provide a customary employer sponsored guaranteed home purchase agreement at fair market value and through an established relocation company (providing for an undertaking by the Company for the sale of the home, or a purchase of the home by the Company, in either case within 60 days and at fair market value).

               4.6.7. Employee shall further be entitled to receive 5 (five) paid personal days for the purpose of the Relocation.

          4.7. Stock Options. Subject to approval by the Company’s Board of Directors, Employee shall be included in the Company’s Employee Stock Option Plan and shall be granted options [consistent with those granted to employees of equivalent status].

     5. Confidentiality.

          5.1. Employee recognizes and acknowledges that he will obtain Proprietary Information (as hereinafter defined) of the Company and its affiliates (the “Orbit Group”) in the course of his employment as an executive employee of the Company. Employee further recognizes and acknowledges that the Proprietary Information is a valuable, special and unique asset of the Company and the Orbit Group. As a result, Employee shall not, without the prior written consent of the Company, for any reason either directly or indirectly divulge to any third-party or use for his own benefit, or for any purpose other than the exclusive benefit of the Company, any confidential, proprietary, business and technical information or trade secrets (the “Proprietary Information”) of the Company or any other Orbit Group entity revealed, obtained or developed in the course of his employment with the Company. Proprietary Information shall include, but shall not be limited to, any information relating to methods of production, manufacture and research; computer hardware and software configurations, computer inputs and outputs (regardless of the media on which stored or located) and computer processing systems, techniques, designs, architecture, and interfaces; the identities of, the relationship with, the terms of contracts and agreements with, the needs and requirements of, and the course of dealing with, the respective Orbit Group entities’ actual and prospective customers, contractors and suppliers; and any other materials prepared by Employee in the course of his employment by the Company, or prepared by any other employee or contractor of the Orbit Group for the Orbit Group’s customers, (including concepts, layouts, flow charts, specifications, know-how, plans, sketches, blueprints, costs, business studies, business procedures, finances, marketing data, methods, plans, personnel information, customer and vendor credit information and any other materials that have not been made available to the general public). Nothing contained herein shall restrict Employee’s ability to make such disclosures during the course of the employment as may be necessary or appropriate to the effective and efficient discharge of the duties required by or appropriate for the Position or as such disclosures may be required by law. Furthermore, nothing contained herein shall restrict Employee from divulging or using for his own benefit or for any other purpose any Proprietary Information that is readily available to the general public so long as such information did not become available to the general public as a direct or indirect result of Employee’s breach of this Section 5. Failure by the Company (or any other Orbit Group entity) to mark any of the Proprietary Information as confidential or proprietary shall not affect its status as Proprietary Information under the terms of this Agreement.

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          5.2. All right, title and interest in and to Proprietary Information shall be and remain the sole and exclusive property of the respective Orbit Group entity. During the Term, Employee shall not remove from the Company’s offices or premises any documents, records, notebooks, files, correspondence, reports, memoranda or similar materials of or containing Proprietary Information, or other materials or property of any kind belonging to the Company unless necessary or appropriate in accordance with the duties and responsibilities required by or appropriate for the Position and, in the event that such materials or property are removed, all of the foregoing shall be returned to their proper files or places of safekeeping as promptly as possible after the removal shall serve its specific purpose. Employee shall not make, retain, remove and/or distribute any copies of any of the foregoing for any reason whatsoever except as may be necessary in the discharge of the assigned duties and shall not divulge to any third person the nature of and/or contents of any of the foregoing or of any other oral or written information to which he may have access or with which for any reason he may become familiar, except as disclosure shall be necessary in the performance of the duties; and upon the termination of his employment with the Company, he shall return to the Company all originals and copies of the foregoing then in the possession, whether prepared by Employee or by others.

     6. Assignment of Developments.

          6.1. If at any time or times during Employee’s employment with the Company, he shall (either alone or with others) make, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “Developments”) that (i) relates to the then current business of the Company or any then current customer of or supplier to the Company or any of the products or services being developed, manufactured or sold by the Company, (ii) results from tasks assigned him by the Company or (iii) results from any use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Employee shall promptly disclose to the Company (or any persons designated by it) each such Development and Employee hereby assigns any rights he may have or acquire in the Developments, and benefits and/or rights resulting therefrom, to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

          6.2. Upon disclosure of each Development to the Company, Employee will, during his employment with the Company, and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require (i) to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and (ii) to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

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          6.3. In the event the Company is unable, after all diligent effort, to secure Employee’s signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Employee’s physical or mental incapacity or for any other reason whatsoever, Employee hereby irrevocably designates and appoints the Company through its duly authorized president as his agent and attorney-in-fact, to act for and in his behalf and stead solely to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright or other analogous intellectual property protection thereon with the same legal force and effect as if executed by him.

     7. Covenant not to Compete.

          7.1. Employee shall not, during the Term and for a period of two (2) years after termination hereof for any reason whatsoever (the “Restricted Period”), do any of the following directly or indirectly without the prior written consent of the Company in its sole discretion:

               7.1.1. engage or participate, directly or indirectly, in any business activity competitive with the business of the Company or any other Orbit Group entity (collectively the “Business”) as conducted during the Term;

               7.1.2. become interested (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent, consultant or otherwise) in any person, firm, corporation, association or other entity engaged in any business that is competitive with the Business as conducted during the Term, or become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent, consultant or otherwise) any portion of the business of any person, firm, corporation, association or other entity where such portion of such business is competitive with the Business as conducted during the Term (notwithstanding the foregoing, Employee may hold not more than one percent (1%) of the outstanding securities of any class of any publicly-traded securities of a company that is engaged in activities competitive with the Business as conducted during the Term);

               7.1.3. solicit or call on, either directly or indirectly, any (i) customer with whom the Company shall have dealt at any time during the Term, or (ii) supplier with whom the Company shall have dealt at any time during the one (1) year period immediately preceding the termination of Employee’s employment hereunder;

               7.1.4. influence or attempt to influence any supplier, customer or potential customer of the Company to terminate or modify any written or oral agreement or course of dealing with the Company; or

               7.1.5. influence or attempt to influence any person either (i) to terminate or modify the employment, consulting, agency, distributorship or other arrangement with the Company or the Orbit Group, or (ii) to employ or retain, or arrange to have any other person or entity employ or retain, any person who has been employed or retained by the Company or the Orbit Group as an employee, consultant, agent or distributor of the Company or the Orbit Group

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at any time during the one (1) year period immediately preceding the termination of Employee’s employment hereunder.

          7.2. Employee acknowledges that he has carefully read and considered the provisions of this Section 7. Employee acknowledges that the foregoing restrictions may limit his ability to earn a livelihood in a business similar to the Business, but he nevertheless believes that he has received and will receive sufficient consideration and other benefits in connection with the payment by the Company of the compensation set forth in Section 4 to justify such restrictions, which restrictions Employee does not believe would prevent him from earning a living in businesses that are not competitive with the Business and without otherwise violating the restrictions set forth herein.

          7.3. Any reference to the “Company” in Section 7.1 above shall mean the Company and its subsidiaries, individually and collectively, as appropriate in context.

     8. Termination. Employee’s employment hereunder (and the Term) may be terminated upon the occurrence of any one of the events described in this Section 8. Upon termination, Employee shall be entitled only to such compensation and benefits as described in this Section 8.

          8.1. Termination for Disability.

               8.1.1. In the event of the disability of Employee such that Employee is unable to perform the duties and responsibilities hereunder to the full extent required by this Agreement by reasons of illness, injury or incapacity for a period of more than ninety (90) consecutive days or more than one hundred eighty (180) days, in the aggregate, during any twenty four (24) months period, Employee’s employment hereunder may be terminated by the Company by written notice to Employee.

               8.1.2. In the event of a termination of Employee’s employment hereunder pursuant to Section 8.1.1, Employee shall be entitled to receive all accrued but unpaid (as of the effective date of such termination) Base Salary, Benefits and a pro-rata amount (as determined in good faith by the Company’s Board of Directors) of the Bonus applicable to the then calendar year. Except as specifically set forth in this Section 8.1, the Company shall have no liability or obligation to Employee hereunder by reason of such termination, except that Employee shall be entitled to receive any payment prescribed under any disability benefits plan in which he is a participant as an employee of the Company, and to exercise any rights afforded under any other benefit plan then in effect.

          8.2. Termination by Death. In the event that Employee dies during the Term, Employee’s employment hereunder shall be terminated thereby and the Company shall pay to Employee’s executors, legal representatives or administrators an amount equal to the accrued and unpaid (as of the effective date of such termination) Base Salary, Benefits and a pro-rata amount (as determined in good faith by the Company’s Board of Directors) of the Bonus applicable to the then calendar year. Except as specifically set forth in this Section 8.2, the Company shall have no liability or obligation hereunder to Employee’s executors, legal

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representatives, administrators, heirs or assigns (or any other person claiming under or through him by reason of Employee’s death), except that Employee’s executors, legal representatives or administrators will be entitled to receive the payment prescribed under any death or disability benefits plan in which he is a participant as an employee of the Company, and to exercise any rights afforded under any benefit plan then in effect.

          8.3. Termination for Cause.

               8.3.1. The Company may terminate Employee’s employment hereunder at any time for “cause” upon written notice to Employee. For purposes of this Agreement, “cause” shall mean:

                    8.3.1.1 any breach by Employee of any of the covenants under Sections5, 6 or 7 of this Agreement;

                    8.3.1.2 Employee has been grossly negligent or has committed willful misconduct in carrying out his duties hereunder and either continues to be grossly negligent or commit willful misconduct for a period of, or fails to cure the results of his gross negligence or willful misconduct within, 30 days after written notice from the Company to Employee thereof;

                    8.3.1.3 conduct of Employee involving any type of insubordination, or disloyalty to the Company, or willful misconduct with respect to the Company, including without limitation fraud, embezzlement, theft or proven dishonesty in the course of the employment;

                    8.3.1.4 conviction of a felony or other criminal act punishable by more than one (1) year in prison; and

                    8.3.1.5 commission by Employee of an intentional tort or an act involving moral turpitude or constituting fraud.

               8.3.2. In the event of a termination of Employee’s employment hereunder pursuant to Section 8.3Employee shall be entitled to receive all accrued but unpaid (as of the effective date of such termination) Base Salary and Benefits. All Base Salary and Benefits shall cease at the time of such termination. Employee shall not be entitled to receive any Bonus (whether or not then earned) for (i) the then calendar year, and (ii) the calendar year in which the event giving rise to the termination for “cause” occurred. Except as specifically set forth in this Section 8.3, the Company shall have no liability or obligation to Employee hereunder by reason of such termination.

          8.4. Termination Without Cause.

               8.4.1. The Company may terminate Employee’s employment hereunder at any time, for any reason whatsoever, with or without cause, effective upon the date designated by the Company upon one hundred eighty (180) days (the “Notice Period”) prior written notice to Employee.

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               8.4.2. In the event of a termination of Employee’s employment hereunder pursuant to Section 8.4, Employee shall be entitled to receive all accrued but unpaid (as of the effective date of such termination) Base Salary, Benefits, use of company car (or economic value thereof) and a pro-rata amount (as determined in good faith by the Company’s Board of Directors) of the Bonus applicable to the then calendar year. Except as specifically set forth in this Section 8.4, the Company shall have no liability or obligation to Employee hereunder by reason of such termination.

               8.4.3. During the Notice Period, Employee (i) shall not be entitled to retain the Position, and (ii) shall cooperate in good faith with the Company in transitioning the duties of the Position to one or more successors as determined by the Board of Directors or the Chairman.

               8.4.4. The Company may, at its sole discretion, in lieu of continuing the Employee’s employment during the Notice Period (or any part thereof) terminate the Employee’s employment immediately during the Notice Period by written notice to the Employee, and pay the Employee, as liquidated damages, an amount equal to the Base Salary, Bonus, Benefits and other payments which the Employee would have been entitled to had his employment continued from the date of such termination until the end of the Notice Period (the “Last Payment Date”). Any such payment shall be made on such dates, and in such form, as would have been made had the Employee’s employment continued through the Last Payment Date. For the purpose of vesting of Options, the termination of the Employee’s employment hereunder shall be deemed to occur on the Last Payment Date notwithstanding an earlier termination pursuant to this section 8.4.4.

          8.5. Termination By Employee.

               8.5.1. Employee may terminate Employee’s employment hereunder at any time for any reason effective upon the date designated by Employee in written notice of the termination of the employment hereunder pursuant to this Section 8.5; provided that, such date shall be at least [ninety (90)] days after the date of such notice.

               8.5.2. In the event of a termination of Employee’s employment hereunder pursuant to Section 8.5hereof, Employee shall be entitled to receive all accrued but unpaid (as of the effective date of such termination) Base Salary and Benefits. All Base Salary and Benefits shall cease at the time of such termination, subject to the terms of any benefit plan then in force and applicable to Employee. Employee shall not be entitled to receive any Bonus on account of the then current year. Except as specifically set forth in this Section 8.5, the Company shall have no liability or obligation to Employee hereunder by reason of such termination.

     9. Representations, Warranties and Covenants of Employee.

          9.1. Employee represents and warrants to the Company that:

               9.1.1. There are no restrictions, agreements or understandings whatsoever to which Employee is a party which would prevent or make unlawful Employee’s execution of this Agreement or Employee’s employment hereunder, or which is or would be inconsistent or in

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conflict with this Agreement or Employee’s employment hereunder, or would prevent, limit or impair in any way the performance by Employee of the obligations hereunder; and

               9.1.2. Employee has disclosed to the Company all restraints, confidentiality commitments or other employment restrictions that he has with any other employer, person or entity.

     10. Survival of Provisions. The provisions of this Agreement set forth in Sections 5, 6, 7, 9, 10, 16 and 19 hereof shall survive the termination of Employee’s employment hereunder for any reason whatsoever.

     11. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators, heirs and/or permitted assigns; provided that neither Employee nor the Company may make any assignments of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other parties hereto; except that, without such consent, the Company may assign this Agreement to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, provided that such successor assumes in writing all of the obligations of the Company under this Agreement.

     12. Notice. Any notice hereunder by either party shall be given by personal delivery or by sending such notice by certified mail, return-receipt requested, or telecopied, addressed or telecopied, as the case may be, to the other party at its address set forth below or at such other address designated by notice in the manner provided in this section. Such notice shall be deemed to have been received upon the date of actual delivery if personally delivered or, in the case of mailing, two (2) days after deposit with the U.S. mail, or, in the case of facsimile transmission, when confirmed by the facsimile machine report.

If to Employee:

Per O. Iversen
[Address]
Fax:

If to the Company:

Orbit/FR, Inc.
Att: Chairman
506 Prudential Road
Horsham, PA 19047
Fax:

     13. Entire Agreement; Amendments. This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every

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nature between the parties hereto relating to the employment of Employee with the Company. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

     14. Waiver. The waiver of the breach of any term or provision of this Agreement shall not operate as or be construed to be a waiver of any other or subsequent breach of this Agreement.

     15. Governing Law. This Agreement shall be construed and enforced in accordance with the substantive laws of the State of Delaware, without regard to the principles of conflicts of laws of any jurisdiction.

     16. Invalidity. If any provision of this Agreement shall be determined to be void, invalid, unenforceable or illegal for any reason, the validity and enforceability of all of the remaining provisions hereof shall not be affected thereby. If any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, such provision shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such amendment to apply only to the operation of such provision in the particular jurisdiction in which such adjudication is made; provided that, if any provision contained in this Agreement shall be adjudicated to be invalid or unenforceable because such provision is held to be excessively broad as to duration, geographic scope, activity or subject, such provision shall be deemed amended by limiting and reducing it so as to be valid and enforceable to the maximum extent compatible with the applicable laws of such jurisdiction, such amendment only to apply with respect to the operation of such provision in the applicable jurisdiction in which the adjudication is made.

     17. Section Headings. The section headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

     18. Number of Days. In computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and legal holidays; provided that, if the final day of any time period falls on a Saturday, Sunday or day which is a legal holiday in the location of the principal place of business of the Company, then such final day shall be deemed to be the next day which is not a Saturday, Sunday or legal holiday.

     19. Specific Enforcement; Extension of Period.

          19.1. Employee acknowledges that the restrictions contained in Sections 5, 6, and 7 hereof are reasonable and necessary to protect the legitimate interests of the Company and its affiliates and that the Company would not have entered into this Agreement in the absence of such restrictions. Employee also acknowledges that any breach by him of Sections 5, 6, or 7 hereof will cause continuing and irreparable injury to the Company for which monetary damages would not be an adequate remedy. Employee shall not, in any action or proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that an adequate remedy at law exists. In the event of such breach by Employee, the Company shall have the right to enforce the provisions of Sections 5, 6, and 7 of this Agreement by seeking injunctive or other

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relief in any court, and this Agreement shall not in any way limit remedies of law or in equity otherwise available to the Company.

          19.2. The periods of time set forth in Section 7 hereof shall not include, and shall be deemed extended by, any time required for litigation to enforce the relevant covenant periods, provided that the Company is successful on the merits in any such litigation. The “time required for litigation” is herein defined to mean the period of time from the earlier of Employee’s first breach of such covenants or service of process upon Employee through the expiration of all appeals related to such litigation.

     20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed UNDER SEAL as of the day and year first written above.

Orbit/FR, Inc.	Per O. Iversen
By: /s/ Philippe Garreau [SEAL]        Philippe Garreau, Chairman	By: /s/ Per O. Iversen [SEAL]

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EX-23.1

Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in this Registration Statement (Form S-8 No. 333-78053) pertaining to the Orbit/FR, Inc. stock option plan of our report dated April 13, 2009, with respect to the consolidated financial statements and schedule of Orbit/FR, Inc. incorporated by reference in the Annual Report (Form 10-K) for the year ended December 31, 2008.

/s/ Cornick, Garber & Sandler, LLP
April 13, 2009
New York, NY

EX-23.2

Exhibit 23.2

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-78053) pertaining to the Orbit/FR, Inc. stock option plan of our report dated March 14, 2008, with respect to the consolidated financial statements and schedule of Orbit/FR, Inc. incorporated by reference in the Annual Report (Form 10-K) for the year ended December 31, 2008.

/s/ Hoberman, Miller, Goldstein & Lesser
April 14, 2009
New York, NY

EX-23.3

Exhibit 23.3

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-78053) pertaining to the Orbit/FR, Inc. stock option plan of our report dated March 31, 2009, with respect to the consolidated financial statements and schedule of Orbit/FR, Inc. incorporated by reference in the Annual Report (Form 10-K) for the year ended December 31, 2008.

/s/ Kost Forer Gabbay & Kasierer
April 14, 2009
Tel Aviv, Israel

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Per Iversen, Chief Executive Officer of ORBIT/FR, Inc., certify that:

1. I have reviewed this Annual Report on Form 10-K of ORBIT/FR, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

     c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2009

	/s/ Per Iversen
Chief Executive Officer	Per Iversen

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Relland Winand, Chief Financial Officer of ORBIT/FR, Inc., certify that:

1. I have reviewed this Annual Report on Form 10-K of ORBIT/FR, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal controls over financial reporting (as defined) in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

     c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2009

	/s/ Relland Winand
Chief Financial Officer	Relland Winand

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Orbit/FR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Per Iversen, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 14, 2009

/s/ Per Iversen

Israel Adan
President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Orbit/FR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Relland Winand, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 14, 2009

/s/ Relland Winand

Relland Winand
Chief Financial Officer