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    cor03725_06132008.htm

      2525
Shader Road

      Orlando,
FL 32804

      Phone
(407) 298-2000 X146

      Fax (407)
578-7731

      June 12,
2008

      Ms.
Angela Crane

      Branch
Chief

      Division
of Corporation Finance

      Securities
and Exchange Commission

      100 F
Street, N.E.

      Washington,
DC 20549

                RE:

                Reply
      to your letter dated May 30, 2008 regarding “Comments on Form 10-K for the
      year ended December 31, 2007.”

      Dear Ms.
Crane:

      In
response to your letter dated May 30, 2008 regarding comments and questions you
have in relation to our Form 10-K for the year ended December 31, 2007, please
find below our responses to your comments:

                1.

                Revise
      future filings to define the financial ratios and minimum net worth levels
      required in your financial
covenants.

      We will
revise our future filings accordingly.  Set out below is a proposed
form of disclosure regarding the Company’s debt financings that the Company
would use in future filings.

      On
October 14, 2004, MtronPTI, entered into a loan agreement with FNBO (the “FNBO
Loan Agreement”).  The FNBO Loan Agreement provides for a short-term
credit facility of up to $5,500,000 (the “FNBO Revolving Loan”).  The
provisions of the FNBO Revolving Loan were subsequently amended, most recently
on August 1, 2007.  The principal balance of the FNBO Revolving Loan
currently bears interest at 30-day LIBOR plus 2.1%, with interest only payments
due monthly and the final payment of principal and interest due on June 30,
2008.  At [INSERT DATE], the amount outstanding under the revolving
credit loan was [$XX].

      The FNBO
Loan Agreement also provides for a term loan in the original principal amount of
$2,000,000 (the “FNBO Term Loan”).  The provisions of the FNBO Term
Loan were subsequently amended, most recently on January 24,
2008.  Under such amendment, the original principal amount of the FNBO
Term Loan is approximately $1,410,000, and the principal balance bears interest
at 30-day LIBOR plus 2.1%, with principal and interest payments due monthly and
the final payment of principal and interest due January 24, 2013.

      The FNBO
Loan Agreement contains a variety of affirmative and negative covenants,
including, but not limited to, financial covenants that MtronPTI maintain: (i)
an excess of current assets over current liabilities of not less than $2
million; (ii) tangible net worth of not less than $4.2 million, (iii) a ratio of
current assets to current liabilities of not less than 1.2 to 1.0; (iv) a ratio
of total liabilities to tangible net worth of not greater than 4.0 to 1.0; and
(v) a fixed charge ratio of 1.2 to 1.0.  At [INSERT DATE], the Company
was in compliance with these covenants.

      All
outstanding obligations under the FNBO Loan Agreement are guaranteed by the
Company.

      In
connection with the FNBO Term Loan, MtronPTI entered into a separate interest
rate swap agreement with FNBO from which it receives periodic payments at the
LIBOR Base Rate and makes periodic payments at a fixed rate of 5.60% through the
life of the FNBO Term Loan.  The Company has designated this swap as a
cash flow hedge in accordance with FASB 133 “Accounting for Derivative
Instruments and Hedging Activities”.  The fair value of the interest
rate swap at [INSERT DATE] is [INSERT VALUE] net of any tax effect, and is
included in “swap liability on hedge contracts” on the condensed consolidated
balance sheets.  The value is reflected in other comprehensive loss,
net of any tax effect.

      On
September 30, 2005, MtronPTI entered into a loan agreement (the “RBC Loan
Agreement”) with RBC Centura Bank (“RBC”), which provides for a loan in the
original principal amount of $3,040,000 (the “RBC Term Loan”).  The
RBC Term Loan bears interest at LIBOR Base Rate plus 2.75% and is being repaid
in monthly installments based on a 20 year amortization, with the then remaining
principal balance and interest due on the fifth anniversary of the RBC Loan
Agreement.  The RBC Loan Agreement contains a variety of affirmative
and negative covenants, including, but not limited to, financial covenants that
MtronPTI maintain: (i) a ratio of total liabilities to tangible net worth of at
least 4.0 to 1.0; (ii) tangible net worth of at least $4.2 million; and (iii) a
fixed charge coverage ratio of not less than 1.2 to 1.0.  At [INSERT
DATE], the Company was in compliance with these covenants.

      All
outstanding obligations under the RBC Loan Agreement are collateralized by
security interests in the assets of MtronPTI and guaranteed by the
Company.

      In
connection with the RBC Term Loan, MtronPTI entered into a five-year interest
rate swap from which it receives periodic payments at the LIBOR Base Rate and
makes periodic payments at a fixed rate of 7.51% with monthly settlement and
rate reset dates.  The Company has designated this swap as a cash flow
hedge in accordance with FASB 133 “Accounting for Derivative Instruments and
Hedging Activities”.  The fair value of the interest rate swap at
[INSERT DATE] is [INSERT VALUE] net of any tax effect, and is included in “swap
liability on hedge contracts” on the condensed consolidated balance
sheets.  The value is reflected in other comprehensive loss, net of
any tax effect.

                2.

                We
      note that you include revenue recognition as one of your critical
      accounting estimates.  Your discussion herein does not discuss
      the nature of any estimates regarding the company’s revenue
      recognition.  The disclosure merely repeats the policies from
      your significant accounting policies footnote without
      elaboration.  Your disclosure should supplement, not duplicate,
      the description of your accounting policies that are already disclosed in
      the notes to the financial statements.  Your discussion should
      present your analysis of the uncertainties involved in applying accounting
      principles, specifically address why your accounting estimates bear the
      risk of change, how you arrived at the estimate, whether that estimate is
      reasonably likely to change, etc.  Please revise in future
      filings.  We refer you to SEC Release No. 33-8350, Commission
      Guidance Regarding Management’s Discussion and Analysis of Financial
      Condition and Results of
Operations.

      Our revenue recognition policy does not include
any estimates.  As discussed further in our response to
your comment 4, the Company does not accept returns.  Any product sent back to the Company
that does not meet customer specifications
is treated as a warranty matter and does not affect revenue recognition.

                3.

                We
      note that you recognize revenue upon shipment.  We also note
      your disclosure on pages 2 and 8 that your products are “custom designed
      highly-engineered electric components.”  Given the customization
      of your products please explain any customer acceptance provisions
      included in your sales agreements.  For example, tell us if your
      customers have the right to test the equipment prior to
      acceptance.  In addition, tell us about any obligations you
      have, if any, subsequent to shipment.  Please include a clear
      discussion of the agreements, which would indicate that the revenue
      recognition criteria outlined in SAB 104 has been
  met.

      We test
our products prior to shipment in order to insure that they meet each customer’s
requirements based upon specifications
received from  each customer at the time its order is received and
accepted.  As discussed further in our
response to your comment 4, the Company does not accept
returns.  All customer acceptance provisions that are related
to required performance specifications and any other obligations of the Company
regarding its products subsequent to shipment are warranty matters.

      Revenue is recognized upon shipment to the customer
because the Company believes that all criteria for revenue recognition have been
met at that point in time.  Prior to shipment, the Company has already
entered into an agreement with each customer setting the terms and
specifications of the product to be delivered at a set and certain price, and
with collectibility of amounts due reasonably assured.  The Company
performs due diligence upon acceptance of a new customer and examines the payment history of existing customers to
insure the reasonable collectibility of amounts due.  In addition, as the Company completes its
own testing prior to shipment, the Company makes a determination that all
customer performance specifications are met prior to
shipment.

                4.

                In
      this regard, please explain your return policy, including any warranties
      provided to your customers and how they impact your revenue
      recognition.  We note the disclosure on page 17, regarding
      “yield losses” and increase “rework costs” at your Orlando,
      facility.  Explain what these costs involve and revise your
      disclosure in future filings to discuss in greater
  detail.

      The Company’s return policy states that it will not
accept any returns of products without prior authorization and only if the
product does not meet customer specifications, in which case the product would
be replaced or repaired under the Company’s warranty provisions.  As
returns are not accepted, there is no adjustment needed to estimate any future
returns from current sales.

      The Company typically provides for a one-year warranty
on its products, in which it warrants that its products will perform within the
agreed upon specifications and criteria, or the Company will either replace or
repair the defective product.  The Company’s warranty costs are
estimated on an ongoing basis based upon historical results and current
expectations, and are accounted for under FAS 5.  Historically, the
Company’s warranty expense has been immaterial to the Company’s financial
results.

      When the Company experienced lower than historical
margins, it attributed the lower margins to the Orlando facility incurring
higher than normal “yield losses” and “rework
costs”.  “Yield losses” and
“rework costs” are costs incurred by the Company during the manufacturing process and result in higher manufacturing costs.  A
“yield loss” refers to the
cost of producing a relatively low amount
of useful components from a certain
amount of raw materials. For example, the Company may only achieve a 60%
return of useful components from a specific piece of raw material that the Company anticipated would produce an 85%
return.  A “rework cost” refers to the cost of fixing product errors
prior to shipment, which involves
additional labor and overhead expenses over
and above the standard time and effort
generally required to manufacture a
component.

                5.

                We
      note your use of distributors to sell your products.  Please
      describe the terms of your arrangements with distributors, including
      payment, price protection, return, exchange, and other significant
      terms.  Disclose when sales through these distributors are
      recognized, if different from your usual policy of recognizing revenue
      upon product shipment.  If you recognize revenue on shipment of
      product to distributors, explain why you believe this practice is
      appropriate.  Refer to the guidance in paragraph 6 of SFAS 48 in
      your response.

      Distributors, which purchase our products from us and
then re-sell them to manufacturers in separate unrelated
transactions, are treated, for accounting
purposes, the same as any other customer.  We do not offer or grant
different return or warranty terms, payment terms, price protection and/or
discounts to distributors that are not offered to other customers. A distributor
takes title of our products upon shipment to it and is liable to the Company for
payments due under typical terms and not subject to any contingencies (i.e., not
liable until sold to a third party or can not sell it, so it returns the product
is not accepted).  We do not keep any inventory with a distributor
under consignment or other similar terms.

      As discussed further in our response to your comment 3,
revenue is recognized upon shipment to the customer.

                6.

                We
      note the $451,000 in accrued compensation expenses as one of your
      reclassifications for the December 31, 2006 balance
      sheet.  Please explain the nature of this reclassification and
      the error to which it relates.

      This balance represents an amount that was previously
classified in “other accrued expenses” in the originally reported 2006 balance
sheet.  As part of conforming the 2006 balance sheet to reflect the
2007 presentation, certain accrued balances were reclassified.  We now
note that these balances should have been included within the
“Reclassifications” sub section within footnote 1 on page 50.  The
amount noted was simply a reclassification and was not related to an error
previously reported.

                7.

                Your
      disclosure on page 61 indicates that you incorrectly classified the net
      carrying value of select Lynch Systems assets as assets held for sale
      during the three months ended June 30, 2007, instead of asset held for
      use.  We note you subsequently reclassified the net carrying
      value and related accumulated depreciation on your balance
      sheet.  Please explain how you adjusted the related depreciation
      expense on your statement of operations for June 30, 2007 and subsequent
      quarters and quantify the amounts.

      The original adjustment to classify the Lynch Systems
assets to assets held for sale would have been made in May 2007 as that was the
time the sale agreement with respect to select Lynch Systems assets and
liabilities was first entered into. It should be noted that originally, the
buyer of the Lynch Systems assets and liabilities wanted to acquire the land and
related buildings, but at the “11th hour” decided against it.  As it
relates to proper accounting for depreciation expense, the buildings should have
stopped being depreciated at the point in time a decision to sell them was made
(in May 2007).  However, upon the completion of the Company’s closing
and reporting procedures for the year ended 2007, it was noted that depreciation
of the buildings had continued unchanged from May through December
2007.  In regards to depreciation expense needing to be adjusted for
the reclassification of the assets held for sale as assets held and used, no
adjustment was needed as the buildings continued to be depreciated as of the
quarterly period ending June 30, 2007.

      It should also be noted that the Company recorded an
impairment charge for these same assets effective June 2007. The impairment
triggering event was the sale of select Lynch Systems’ assets and liabilities on
June 19, 2007.  The difference in depreciation expense for the last
portion of June would have been less than $1,800.  The Company deemed
this to be immaterial and did not include it within its restatement
adjustments.  The Company did adjust its recognized depreciation for
subsequent quarters in an amount of approximately $19,000 per
quarter.  The Company also believed that this amount was immaterial
and therefore did not include it in the September 2007 quarterly restatement
table.

      As
requested in your letter, the Company acknowledges the following:

                ·

                The
      Company is responsible for the adequacy and accuracy of the disclosure in
      the filing.

                ·

                Staff
      comments or changes to disclosures in response to staff comments do n