UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~April~~October 2827, 2012

¨ 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: 0-03319

DGT HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

NEW YORK	13-1784308
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 PINE AIRE DRIVE, BAY SHORE, NY	11706
c/o Steel Partners Holdings L.P., 590 Madison Avenue, 32nd floor New York, New York	10022
(Address of principal executive offices)	(Zip Code)

~~631~~212-~~231~~520-~~6400~~2300 (Registrant’s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report)

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

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 ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The number of shares of Registrant’s common stock outstanding as of ~~June~~December 110, 2012 was 3,~~839~~879,468.

DGT HOLDINGS CORP.

Table of Contents

		Page No.
PART I	FINANCIAL INFORMATION
	Item 1. FINANCIAL STATEMENTS	3
	Statements of Operations for the Three and Nine Months ended April 28, 2012 and April 30, 2011	3
	Statements of Operations for the Three Months ended October 27, 2012 and October 29, 2011	3
	Balance Sheets as of April 28, 2012 and July 30, 2011	4
	Balance Sheets as of October 27, 2012 and July 28, 2012	4
	Statements of Cash Flows for the Nine Months ended April 28, 2012 and April 30, 2011	5
	Statements of Cash Flows for the Three Months ended October 27, 2012 and October 29, 2011	5
	Notes to Financial Statements	6-1210
	Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1311-1914
	Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1914
	Item 4. CONTROLS AND PROCEDURES	1914-15
PART II -	OTHER INFORMATION
PART II	OTHER INFORMATION
	Item 1. LEGAL PROCEEDINGS	2016
	Item 1A. RISK FACTORS	2016
	Item 6. EXHIBITS	2016
	SIGNATURES	2117
	EX-31.1 (EX-31.1): Certification
	EX-31.2 (EX-31.2): Certification
	EX-32.1 (EX-32.1): Certification
	EX-32.1 (EX-32.1): Certification
	101.INS XBRL Instance Document
	EX-32.2 (EX-32.2): Certification
	101.SCH XBRL Schema Document
	101.INS XBRL Instance Document
	101.CAL XBRL Calculation Linkbase Document
	101.SCH XBRL Schema Document
	101.LAB XBRL Labels Linkbase Document
	101.CAL XBRL Calculation Linkbase Document
	101.PRE XBRL Presentation Linkbase Document
	101.LAB XBRL Labels Linkbase Document
	101.DEF XBRL Definition Linkbase Document
	101.PRE XBRL Presentation Linkbase Document
	101.DEF XBRL Definition Linkbase Document

PART I - FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

DGT HOLDINGS CORP.

STATEMENTS OF OPERATIONS

(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

	Three Months Ended						~~Nine Months Ended~~
	April 28, 2012			April 30, 2011			April 28, 2012			April 30, 2011
	October 27, 2012			October 29, 2011
SALES	$	~~3,050~~189		$	~~2,732~~-		$	~~8,578~~		$	~~7,467~~
COST OF SALES		~~2,108~~76			~~1,907~~-			~~5,756~~			~~5,824~~
GROSS MARGIN		~~942~~113			~~825~~-			~~2,822~~			~~1,643~~
Selling, general and administrative		1,382			1,074			3,860			3,215
General and administrative		629			619
Research and development		38			30			118			107
Total operating expenses		629			619
Total operating expenses		1,420			1,104			3,978			3,322
OPERATING LOSS		(516	)		(619	)
OPERATING LOSS		(478	)		(279	)		(1,156	)		(1,679	)
Interest income		47			44
Interest income		90			38			194			63
Interest expense		(35	)		(45	)
Interest expense		(58	)		(26	)		(118	)		(96	)
Other income		(41	)		-
Other income		13			-			13			-
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(545	)		(620	)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(433	)		(267	)		(1,067	)		(1,712	)
Income tax provision		25			-
Income tax provision		6			3			44			4
LOSS FROM CONTINUING OPERATIONS		(570	)		(620	)
LOSS FROM CONTINUING OPERATIONS		(439	)		(270	)		(1,111	)		(1,716	)
Discontinued operations, net of income tax		(344	)		820
Discontinued operations, net of tax		-			(80	)		1,230			2,769
Gain on disposal of discontinued operations, net of income tax		8,795			-
Gain on disposal of discontinued operations, net of tax		-			-			6,837			-
NET INCOME	$	7,881		$	200
NET INCOME (LOSS)	$	(439	)	$	(350	)	$	6,956		$	1,053
NET INCOME (LOSS) PER BASIC AND DILUTED SHARE:
NET INCOME (LOSS) PER BASIC AND DILUTED SHARE:
Loss from continuing operations	$	(0.15	)	$	(0.16	)
Loss from continuing operations	$	(0.11	)	$	(0.07	)	$	(0.29	)	$	(0.62	)
Income from discontinued operations		2.19			0.21
Income (loss) from discontinued operations		(0.00	)		(0.02	)		2.10			1.00
Net income	$	2.04		$	0.05
Net income (loss)	$	(0.11	)	$	(0.09	)	$	1.81		$	0.38
Weighted average shares outstanding		3,856,171			3,867,572
Weighted average shares outstanding		3,839,468			3,846,234			3,849,351			2,773,528
COMPREHENSIVE INCOME (LOSS):
NET INCOME	$	7,881		$	200
Other comprehensive income (loss), net of $0 income taxes:
Net unrealized gain on securities held for sale		1,235			-
Foreign currency translation adjustments		190			(1,203	)
Total other comprehensive income (loss)		1,425			(1,203	)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	9,306		$	(1,003	)

See notes to financial statements.

DGT HOLDINGS CORP.

BALANCE SHEETS

(DOLLARS IN THOUSANDS EXCEPT PAR VALUE)

(UNAUDITED)

	October 27, 2012			July 28, 2012
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	19,282		$	38,169
Restricted cash		3,438			2,428
Securities held for sale		33,160			4,359
Prepaid expenses and other current assets		99			158
Current assets of discontinued operations		-			3,125
Total current assets		55,979			48,239
NON-CURRENT ASSETS:
Property plant and equipment, net		3,543			3,428
Promissory note receivable		646			614
Other assets		68			73
Non-current assets of discontinued operations		-			443
Total non-current assets		4,257			4,558
TOTAL ASSETS	$	60,236		$	52,797

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	82		$	82
Accounts payable – trade		11			11
Accrued expenses		852			1,951
Current liabilities of discontinued operations		-			1,002
Total current liabilities		945			3,046
NON-CURRENT LIABILITIES:
Long-term debt, less current portion		2,258			2,278
Deferred income taxes		474			458
Total non-current liabilities		2,732			2,736
Total liabilities		3,677			5,782

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Common stock, $.10 par value;
Authorized 100,000,000; October 27, 2012 and July 28, 2012, respectively; issued-4,082,157 and 4,042,157 at October 27, 2012 and July 28, 2012, respectively		408			404
Additional paid-in capital		98,408			98,174
Treasury shares – 202,689 shares, at cost, at October 27, 2012 and July 28, 2012		(7,429	)		(7,429	)
Accumulated other comprehensive income (loss)		1,347			(78	)
Accumulated deficit		(36,175	)		(44,056	)
Total shareholders' equity		56,559			47,015
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	60,236		$	52,797

	April 28, 2012			July 30, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	43,276		$	23,629
Restricted cash		2,425			-
Trade receivables (net of allowance for doubtful accounts of $30 and $31 at April 28, 2012 and July 30, 2011, respectively)		1,539			1,569
Inventories (net of allowance for excess and obsolete of $1,068 and $1,175 at April 28, 2012 and July 30, 2011, respectively)		1,761			1,708
Prepaid expenses and other current assets		325			223
Current assets of discontinued operations		-			25,716
Total current assets		49,326			52,845
NON-CURRENT ASSETS:
Property plant and equipment, net		4,139			4,651
Deferred income taxes		-			571
Promissory note receivable		661			-
Other assets		77			95
Non-current assets of discontinued operations		-			5,139
Total non-current assets		4,877			10,456
TOTAL ASSETS	$	54,203		$	63,301
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	81		$	82
Accounts payable – trade		834			730
Accrued expenses		1,106			878
Current liabilities of discontinued operations		-			13,008
Total current liabilities		2,021			14,698
NON-CURRENT LIABILITIES:
Long-term debt, less current portion		2,298			2,355
Deferred income taxes		501			-
Non-current liabilities of discontinued operations		-			1,950
Total non-current liabilities		2,799			4,305
Total liabilities		4,820			19,003
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value;
Authorized 100,000,000; April 28, 2012 and July 30, 2011, respectively; issued-4,042,157 at April 28, 2012 and July 30, 2011, respectively		404			404
Additional paid-in capital		98,081			97,646
Treasury shares – 202,689 and 174,585 shares, at cost, at April 28, 2012 and July 30, 2011, respectively		(7,429	)		(7,176	)
Accumulated other comprehensive income		543			2,596
Accumulated deficit		(42,216	)		(49,172	)
Total shareholders' equity		49,383			44,298
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	54,203		$	63,301

See notes to financial statements.

DGT HOLDINGS CORP.

STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS)

(UNAUDITED)

	Nine Months Ended
	Three Months Ended
	April 28, 2012			April 30, 2011
	October 27, 2012			October 29, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	67,~~956~~881		$	~~1,053~~200
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Gain on sale of discontinued operations		(68,~~837~~795	)		-
Depreciation and amortization		~~312~~54			~~418~~-
Deferred income tax provision		(168	)		-
Stock based compensation expense		~~435~~238			~~145~~108
Changes in operating assets and liabilities, excluding dispositions:
Trade receivables		30			1,733
Prepaid expenses and other current assets		59			34
Inventories		(53	)		54
Other assets		50			6
Prepaid expenses and other current assets		(102	)		260
Accounts payable – trade		-			(51	)
Other assets		(643	)		(90	)
Accrued expenses		(1,354	)		(198	)
Accounts payable – trade		103			(149	)
Discontinued operations		298			(287	)
Accrued expenses		255			(4	)
Net cash used in operating activities		(1,577	)		(188	)
Other long-term liabilities		-			(8	)
CASH FLOWS FROM INVESTING ACTIVITIES
Discontinued operations		62			300
Property plant and equipment purchases		(46	)		-
Net cash provided by operating activities		502			3,712
Purchases of securities held for sale		(27,566	)		-
CASH FLOW FROM INVESTING ACTIVITIES
Discontinued operations		-			(48	)
Property plant and equipment purchases		(43	)		(24	)
Proceeds from sale of discontinued operations		11,311
Discontinued operations		-			(159	)
Restricted cash held in escrow		(1,007	)		-
Proceeds from sale of discontinued operations, net		22,194			-
Net cash used in investing activities		(17,308	)		(48	)
Net cash provided by (used in) investing activities		22,151			(183	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of long-term debt		-			2,500
Repayment of long-term debt		(20	)		(17	)
Proceeds from rights offering		-			14,340
Restricted cash to secure mortgage		(3	)		-
Stock split		-			(9	)
Discontinued operations		-			(109	)
Repayment of long-term debt		(58	)		(44	)
Net cash used in financing activities		(23	)		(126	)
Restricted cash to secure mortgage		(2,425	)		-
EFFECT OF EXCHANGE RATE CHANGES ON CASH		21			(258	)
Purchase of treasury shares		(253	)		-
CASH AND CASH EQUIVALENTS DECREASE FOR THE PERIOD		(18,887	)		(620	)
Discontinued operations		(108	)		(2,095	)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD		38,169			23,629
Net cash (used in) provided by financing activities		(2,844	)		14,692
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	19,282		$	23,009
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(162	)		559
CASH AND CASH EQUIVALENTS INCREASE FOR THE PERIOD		19,647			18,780
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD		23,629			3,987
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	43,276		$	22,767
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for
Interest	$	~~118~~29		$	9643
Taxes paid		44			4
Income taxes		1			-

See notes to financial statements.

DGT HOLDINGS CORP.

NOTES TO FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

~~The~~DESCRIPTION ~~accompanying~~OF ~~unaudited~~BUSINESS ~~financial~~ACTIVITIES ~~statements~~– of DGT Holdings Corp. ~~have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information~~ and ~~with the instructions to Form 10-Q and Article 10 of Regulation S-X. The statements include the accounts of DGT Holdings Corp. and~~ its subsidiaries (the “Company”)~~. All~~ ~~material~~operations ~~intercompany~~currently ~~accounts~~consists ~~and~~of ~~transactions~~leasing ~~have~~two ~~been~~facilities ~~eliminated.~~that ~~These~~were ~~statements do~~ not ~~include~~included ~~all~~in of the ~~information~~assets ~~and~~sold ~~footnotes~~to ~~required~~the byowners ~~accounting~~of ~~principles generally accepted in~~ the ~~United~~two ~~States~~separate ~~for~~businesses ~~complete~~that ~~financial~~the ~~statements~~Company sold. InThe ~~the~~Company’s ~~opinion of management~~business, ~~all~~now ~~adjustments~~reported ~~(consisting~~as ~~only~~one ofreportable ~~normal~~segment, ~~recurring~~in ~~adjustments)~~addition ~~considered~~to ~~necessary~~management ~~for a fair presentation~~ of the ~~results~~real ~~for~~estate ~~the~~business, ~~interim~~is ~~periods~~expected ~~have~~to ~~been~~consist ~~included. Results~~primarily of ~~operations~~capital ~~for~~redeployment ~~the~~and ~~interim~~identification ~~periods are not necessarily indicative~~ of ~~the~~new ~~results~~profitable ~~that~~operations ~~may~~where beit ~~expected~~can ~~for~~utilize ~~the~~its ~~full~~existing ~~year. These~~working ~~financial~~capital ~~statements~~and ~~should~~maximize ~~be read in conjunction with~~ the ~~financial~~use ~~statements~~of ~~and~~ the ~~notes thereto included in the~~ Company’s ~~annual~~net ~~report~~operating ~~on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the fiscal year ended July 30, 2011~~losses. ~~Certain reclassifications have been made to prior years’ amounts to conform to the current year’s presentation.~~

InThe ~~August,~~accompanying ~~2011,~~unaudited financial statements of the Company ~~decided~~have tobeen ~~exit~~prepared in accordance with accounting principles generally accepted in the ~~Medical~~United ~~Systems~~States ~~Group~~for byinterim ~~selling~~financial ~~its~~information ~~Italian~~and ~~subsidiary,~~with ~~Villa~~the ~~Sistemi~~instructions ~~Medicali~~to Form 10-Q and Article 10 of Regulation S-X.p The statements include the accounts of DGT Holdings Corp.A. ~~(“Villa”)~~and its subsidiaries. ~~The~~All ~~business~~material ~~was~~intercompany ~~sold~~accounts onand ~~November~~transactions 3,have ~~2011~~been eliminated. These statements do not include all of the information and isfootnotes ~~reflected~~required asby aaccounting ~~discontinued~~principles ~~operation~~generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the ~~Company~~results for the interim periods have been included. Results ~~Prior~~of ~~period~~operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. These financial statements ~~have~~should ~~also~~be ~~been~~read ~~restated~~in toconjunction ~~reflect~~with ~~this~~the ~~presentation~~financial ~~(see~~statements ~~Note~~and 2the notes thereto included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the fiscal year ended July 28, 2012. ~~This~~Certain ~~business~~reclassifications ~~represents~~have been made to prior years’ amounts to conform to the ~~entire~~current ~~Medical~~year’s ~~Systems~~presentation, ~~Group~~including the presentation of certain operations as discontinued as described below.

~~STOCK~~In ~~SPLIT~~August 2012, the Company exited its Power Conversion Group operations by selling the Power Conversion business (the “Power Conversion Business”), operated by its subsidiary, RFI Corporation (“RFI”). The business sale was completed on August 16, 2012 and is reported as a discontinued operation in the financial statements of the Company. Prior period financial statements have also been restated to reflect this presentation (see Note 2).

OnIn ~~January~~August 6, 2011, the Company ~~effected~~decided ato ~~reverse~~exit ~~split,~~the ~~followed~~Medical Systems Group operations by aselling ~~forward~~its ~~split~~Italian subsidiary, Villa Sistemi Medicali S.p.A. (“Villa”). The ~~number~~business ofwas ~~shares~~sold ~~outstanding~~on ~~and~~November ~~related prices~~3, ~~per~~2011 ~~share~~and ~~amounts,~~is ~~share~~reported ~~conversions~~as ~~and~~a ~~share-based~~discontinued ~~data~~operation ~~have~~in ~~been~~the ~~adjusted~~financial tostatements ~~reflect~~of the ~~stock~~Company ~~splits~~(see ~~for~~Note ~~all~~2). This ~~periods~~business ~~presented~~represented the entire Medical Systems Group.

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

Accounting standards that have been issued by the Financial Accounting Standards Board or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements.

The Company adopted a new accounting standard regarding the presentation of comprehensive income (loss), effective for the fiscal year beginning July 29, 2012.

NOTE 2 – DISCONTINUED OPERATIONS

OnSale ~~August 3, 2011, the Board~~ of ~~Directors~~Power ofConversion the Company approved the sale of Villa and on September 12, 2011, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with VIV s.r.l., a limited liability company incorporated under Italian law (“VIV”), pursuant to which the Company agreed to sell all of its shares in Villa to VIV. The sale price was 16,500,000 Euro in cash and an unsecured subordinated promissory note of 500,000 Euro. The promissory note has a term of 5 years, with interest accruing at a rate of 6% per annum beginning eighteen months after issuance. The note may be prepaid at any time, but if prepayment in full occurs during the first eighteen months, the total principal will be reduced to 400,000 Euro.Business

On ~~November~~August 316, ~~2011~~2012, after obtaining the required two-thirds vote approval by its shareholders, the Company completed the sale of ~~Villa. The~~its ~~Company~~Power ~~received~~Conversion ~~net~~business ~~proceeds~~to inEMS ~~cash~~Development ofCorporation ~~$22~~(“EMS”),~~761~~ a New York corporation and an ~~unsecured~~affiliate ~~promissory~~of ~~note~~Ultra Electronics Defense, ~~initially~~Inc. ~~valued~~(“UEDI), atpursuant ~~$688. The~~to ~~Company~~the ~~also~~asset ~~repurchased~~purchase ~~28,104~~agreement ~~shares~~dated as of ~~common~~June ~~stock~~6, ~~from~~2012, ~~two~~by ~~employees~~and ofamong ~~Villa~~UEDI, ~~for~~the ~~$820~~Company and RFI. AtIn consideration for the ~~time~~sale of ~~this repurchase,~~ the ~~acquired~~Power ~~shares~~Conversion ~~had~~Business, aEMS ~~market~~paid ~~value~~an aggregate of $~~253~~12,500 in cash. As$1,250 ~~the~~of ~~two~~such ~~employees~~amount ~~are~~is ~~also~~being ~~the~~held ~~primary~~in ~~purchasers~~escrow ofto ~~Villa,~~serve ~~the~~as ~~excess~~security ~~was~~for ~~deemed~~payments ain ~~reduction~~satisfaction inof certain of the ~~purchase~~Company’s ~~price~~and ~~described~~RFI’s ~~above~~indemnification obligations and ~~reduced~~$237 ~~the~~is ~~net~~being ~~proceeds~~held in escrow to ~~$22,194~~cover any potential net working capital adjustment. AsThe aworking ~~part~~capital ofadjustment ~~the~~is ~~transaction,~~expected to be $480 unfavorable to the Company ~~received~~and is reflected as a ~~dividend~~reduction ofto the escrow cash ~~held~~balance, bythereby ~~Villa~~netting asto of$1,007 ~~the~~(classified ~~closing~~as ~~date~~restricted cash in the ~~amount~~accompanying offinancial ~~$4,538~~statements). The ~~results~~Company incurred $709 of ~~this~~expenses ~~business~~(primarily ~~disposition~~severance ~~are~~and ~~reported~~legal ascosts) arelated ~~gain~~to ~~from~~the ~~discontinued~~sale, ~~operations~~which have been included in ~~this~~the ~~Quarterly~~computation ~~Report~~of the gain on sale.

The Company retained the ~~building~~RFI infacility ~~Milan,~~and ~~Italy,~~entered ~~housing~~into ~~Villa’s~~a ~~operations, which is subject to an initial six year~~ lease with ~~VIV~~EMS. The ~~and~~lease anhas ~~option for~~ a ~~subsequent~~term ~~six~~of ~~year~~5 ~~period. Under~~years, ~~the~~with ~~terms~~payments of ~~the~~$33 ~~lease,~~per ~~the~~month ~~Company~~net ~~will~~to ~~receive 335~~RFI,~~000~~ ~~Euro~~terminable inby ~~annual rent~~EMS, ~~payable~~as ~~quarterly. The rent may be adjusted annually for changes in~~ the ~~consumer~~tenant, ~~price~~upon ~~index~~30 asdays ~~specified~~prior inwritten ~~the lease~~notice.

AsOperating ~~noted~~results ~~above,~~of ~~the~~RFI ~~Company~~through ~~repurchased shares of~~ its ~~stock~~sales atdate aare ~~premium from two employees of Villa in conjunction with the sale. The Company had previously accounted for that premium~~ as a component of the treasury stock purchase; however, as the two employees were also the primary purchasers of Villa, that premium is now more appropriately reflected in the financial statements as of and for nine months ended April 28, 2012 as a reduction of the purchase price received for Villa. This correction of the accounting originally recognized in the second quarter of fiscal 2012 had the following impacts to the Company’s previously reported balances as of and for the six months ended January 28, 2012follows:

· Treasury stock on the consolidated balance sheet was reduced by the $567 premium from $7,996 to $7,429.

	Three Months Ended
	October 27, 2012			October 29, 2011
Sales	$	78		$	2,602
Income (loss) before taxes	$	(344	)	$	191
Provision for income taxes		-			-
Net income (loss) from discontinued operations	$	(344	)	$	191
Gain on disposal of discontinued operations	$	9,044		$	-
Provision for income taxes		249			-
Net gain on sale of discontinued operations	$	8,795		$	-
Net income from discontinued operations	$	8,451		$	191

·The ~~Gain~~following ontable ~~disposal~~sets offorth ~~discontinued operations, net was reduced by~~ the ~~$567~~assets ~~premium~~and ~~from~~liabilities ~~$7,404~~of toRFI ~~$6,837,~~included ~~which,~~ in ~~turn,~~the ~~reduced~~balance ~~net~~sheet ~~income~~of ~~from~~the ~~$7,962 to $7,395 and increased accumulated deficit from $41,649 to $42,216.~~Company:

· Cash provided by investing activities was reduced by the $567 premium from $22,730 to $22,163 and cash used in financing activities was reduced by the $567 premium from $3,338 to $2,771.

	July 28, 2012
Assets (a):
Accounts receivable, net	$	1,332
Inventories, net		1,720
Prepaid and other current assets		73
Total current assets	$	3,125

Property and equipment, net		443
Total noncurrent assets	$	443

Liabilities:
Accounts payable		540
Accrued expenses		462
Total current liabilities	$	1,002

~~The~~(a) ~~Company’s~~Excludes ~~discontinued~~assets ~~operations~~related ~~results~~to ~~for~~ the ~~three~~RFI ~~and~~building ~~nine~~facility ~~months ended April 28, 2012~~ and ~~April~~related ~~30, 2011 are:~~mortgage.

	Three Months Ended					Nine Months Ended
	April 28, 2012		April 30, 2011			April 28, 2012		April 30, 2011
Sales	$	-	$	9,920		$	16,714	$	45,581
Income (loss) before taxes	$	-	$	(48	)	$	1,894	$	4,341
Provision for income taxes		-		32			664		1,572
Net income (loss) from discontinued operations	$	-	$	(80	)	$	1,230	$	2,769
Gain on disposal of discontinued operations	$	-	$	-		$	7,627	$	-
Provision for income taxes		-		-			790		-
Net gain on sale of discontinued operations	$	-	$	-		$	6,837
Net income (loss) from discontinued operations	$	-	$	(80	)	$	8,067	$	2,769
Income (loss) per share – Basic and Diluted
Net income (loss) from operations	$	-	$	(0.02	)	$	0.32	$	1.00
Net gain on sale		-		-			1.78		-
Earnings (loss) per share – discontinued operations	$	-	$	(0.02	)	$	2.10	$	1.00

Sale of Medical Systems Business

~~The~~On ~~following~~November ~~table~~3, ~~sets~~2011, ~~forth~~the Company completed the ~~assets~~sale of Villa. The Company received proceeds in cash of 16,500,000 euros ($22,761, net of expenses) and ~~liabilities~~an unsecured promissory note for 500,000 euros, initially valued at $688. The promissory note has a term of 5 years, with interest accruing at a rate of 6% per annum, beginning eighteen months after issuance. The note may be prepaid at any time, but if prepayment in full occurs during the ~~discontinued~~first ~~operation~~eighteen ~~included~~months, the total principal will be reduced to 400,000 euros. Through July 28, 2012, no payments have been made on the note. The Company also repurchased 28,104 shares of Common Stock from two employees of Villa for $820. At the time of this repurchase, the acquired shares had a market value of $253. As the two employees are also the primary purchasers of Villa, the excess was deemed a reduction in the ~~balance~~purchase ~~sheet~~price described above and reduced the net proceeds to $22,194. As a part of the transaction, the Company: received a dividend of cash held by Villa as of the closing date in the amount of $4,538.

	April 28, 2012		July 30, 2011
Assets:
Cash	$	-	$	-
Accounts receivable, net		-		14,194
Inventories, net		-		9,022
Prepaid and other current assets		-		2,500
Total current assets	$		$	25,716
Property and equipment, net	$	-	$	581
Goodwill		-		4,526
Deferred taxes		-		7
Other assets		-		25
Total noncurrent assets	$		$	5,139
Liabilities:
Current portion of long-term debt	$	-	$	111
Accounts payable		-		6,395
Accrued expenses		-		6,502
Total current liabilities	$	-	$	13,008
Statutory liability for severance pay	$	-	$	1,950
Shareholders’ Equity: Accumulated other comprehensive income	$	-	$	1,764

~~NOTE~~The 3Company -retained ~~INVENTORIES~~the building in Milan, Italy, housing Villa’s operations, which is subject to an initial six year lease with VIV and an option for a subsequent six year period. Under the terms of the lease, the Company will receive 335,000 euros in annual rent, payable quarterly. The rent may be adjusted annually for changes in the consumer price index as specified in the lease.

~~Inventories~~Through ~~are~~the ~~stated~~date atof the ~~lower~~sale of ~~cost~~the ~~(first-in~~Power Conversion Business, ~~first-out~~the ~~method)~~rental orincome ~~market. Inventories~~and ~~are~~building ~~determined~~costs byrelated ~~physical~~to ~~count~~this ~~for~~lease ~~annual~~and ~~reporting~~underlying ~~purposes~~property were classified as General and ~~are~~Administrative ~~evaluated~~expenses ~~using~~because ~~perpetual~~the ~~inventory~~rental ~~records~~activities ~~for~~were ~~interim~~not ~~reporting~~the ~~periods~~Company’s primary business activities. ~~During~~After ~~interim~~the ~~periods,~~sale of the ~~Company~~Power ~~estimates~~Conversion Business, the ~~amount~~Company ofhad ~~labor~~no other operations and, ~~overhead~~as ~~costs~~such, ~~related~~this torental ~~finished~~activity, ~~goods~~as ~~inventories. As~~well ofas ~~April~~the ~~28,~~RFI ~~2012~~rental activity, ~~finished~~became ~~goods~~the ~~represented~~Company’s ~~approximately~~primary 8business activity.6% Accordingly, rental income is being reflected as Sales and building expenses are being reflected as Cost of sales in the ~~gross~~accompanying ~~carrying~~financial ~~value~~statements and prior period financial statements will reflect a reclassification of ~~our~~such ~~total~~amounts ~~gross~~from ~~inventory~~General and Administrative expense to Sales and Cost of sales to be comparative to the current period presentation. ~~The~~As ~~Company~~Villa ~~believes~~was not sold and the ~~estimation~~VIV ~~methodologies~~lease ~~used~~did ~~are~~not ~~appropriate~~commence ~~and~~until ~~are~~the ~~consistently~~second ~~applied~~quarter of fiscal 2012, the first quarter of fiscal 2012 does not have any such rental activity.

	April 28, 2012			July 30, 2011
Raw materials and purchased parts	$	2,026		$	2,214
Work-in-process		560			457
Finished goods		243			212
		2,829			2,883
Less allowance for excess and obsolete inventories		(1,068	)		(1,175	)
Total inventories	$	1,761		$	1,708

The Company’s discontinued operations results for Villa for the three months ended October 29, 2011 are:

NOTE 4 - PRODUCT WARRANTIES


Sales	$	11,392
Income before taxes	$	1,075
Provision for income taxes		446
Net income from discontinued operations	$	629

~~The~~NOTE ~~Company’s~~3 ~~products~~– ~~are~~SECURITIES ~~covered~~AVAILABLE ~~primarily~~FOR by ninety day warranty plans and in some cases optional extended contracts may be offered covering products for a period up to one year, depending upon the product and contractual terms of sale. The Company establishes allowances for warranties on an aggregate basis for specifically identified, as well as anticipated, warranty claims based on contractual terms, product conditions and actual warranty experience by product line.SALE

~~The~~During ~~activity~~May in2012, the ~~warranty~~disinterested ~~reserve~~member ~~accounts~~of inthe Company’s Board of Directors approved the ~~first~~investment ~~three~~by ~~months~~the Company of ~~fiscal~~up ~~2012~~to $5,000 in equity securities of Handy & Harmon Ltd. and ~~2011~~up isto $15,000 in equity securities of Steel Partners Holdings L.P., both of which are related parties. The Company’s portfolio of marketable securities, which are all measured using quoted market prices in active markets, was as follows:

	Three Months Ended					Nine Months Ended
As of October 27, 2012	Cost			Gross Unrealized Losses		Gross Unrealized Gains			Estimated Fair Value
	April 28, 2012			April 30, 2011		April 28, 2012			April 30, 2011
Money market	$	8,339		$	-	$	-		$	8,339
Balance at beginning of period	$	56		$	21	$	21		$	21
Equity securities of related parties		16,367			130		931			17,168
Provision for (recovery of) anticipated warranty claims		(38	)		-		58			33
U.S. Government securities		15,994			2		-			15,992
Costs incurred related to warranty claims		-			-		(61	)		(33	)
Total available-for-sale securities		40,700			132		931			41,499
Balance at end of period	$	18		$	21	$	18		$	21
Amounts classified as cash equivalents		(8,339	)		-		-			(8,339	)
Amounts classified as securities held for sale	$	32,361		$	132	$	931		$	33,160

The liability related to warranties is included in accrued expenses on the accompanying Balance Sheets.

As of July 28, 2012	Cost			Gross Unrealized Losses		Gross Unrealized Gains		Estimated Fair Value
Money market	$	5,205		$	-	$	-	$	5,205
Equity securities of related parties		4,796			478		41		4,359
Total available-for-sale securities		10,001			478		41		9,564
Amounts classified as cash equivalents		(5,205	)		-		-		(5,205	)
Amounts classified as securities held for sale	$	4,796		$	478	$	41	$	4,359

NOTE 5 - COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) for the Company includes foreign currency translation adjustments and net income (loss) reported in the Company’s Statement of Operations.

Comprehensive income (loss) for the fiscal 2012 and 2011 periods presented is as follows:

	Three Months Ended						Nine Months Ended
	April 28, 2012			April 30, 2011			April 28, 2012			April 30, 2011
Net income (loss)	$	(439	)	$	(350	)	$	6,956		$	1,053
Foreign currency translation adjustments		7			1,212			(2,053	)		2,539
Comprehensive income (loss)	$	(432	)	$	862		$	4,903		$	3,582

NOTE 64 - INCOME ~~(LOSS)~~ PER SHARE

Common shares outstanding exclude 202,689 and 174,585 shares of treasury stock for the nine months ended April 28, 2012 and April 30, 2011, respectively (adjusted for stock splits—see Note 1). The computation of dilutive securities includes the assumed conversion of warrants and employee stock options to purchase Company stock if such conversion is dilutive.

	Three Months Ended
	October 27, 2012		October 29, 2011
Numerator:
Net income	$	7,881	$	200
Denominator (shares in thousands):
Weighted average number of common shares outstanding used for basic income per share		3,856		3,868
Effect of dilutive securities		-		-
Denominator for diluted income per share		3,856		3,868

Income per common share:
Basic	$	2.04	$	0.05
Diluted	$	2.04	$	0.05

	Three Months Ended						Nine Months Ended
	April 28, 2012			April 30, 2011			April 28, 2012		April 30, 2011
Numerator:
Net income (loss)	$	(439	)	$	(350	)	$	6,956	$	1,053
Denominator (shares in thousands):
Weighted average number of common shares outstanding used for basic income per share		3,839			3,846			3,849		2,772
Effect of dilutive securities		-			-			-		-
Denominator for diluted income per share		3,839			3,846			3,849		2,772
Income (loss) per common share:
Basic	$	(0.11	)	$	(0.09	)	$	1.81	$	0.38
Diluted	$	(0.11	)	$	(0.09	)	$	1.81	$	0.38

Common shares outstanding exclude shares of treasury. The computation of dilutive securities does not include the following:

Antidilutive securities excluded from above computations (shares in thousands)

	Three Months Ended
	October 27, 2012		October 29, 2011
Employee stock options		143		139

Three Months Ended

Nine Months Ended

April 28, 2012

April 30, 2011

April 28, 2012

April 30, 2011

Employee stock options

151

126

184

126

NOTE 5 - SHORT-TERM CREDIT FACILITIES AND LONG-TERM DEBT

~~NOTE~~At 7October -27, ~~SHORT-TERM~~2012 ~~CREDIT~~and ~~FACILITIES~~July ~~AND~~28, ~~LONG-TERM~~2012, ~~DEBT~~the Company had no domestic or foreign short term credit facilities.

At April 28, 2012 and July 30, 2011, the Company had no borrowings under any foreign short term credit facilities.

Long term debt is summarized as follows:

	April 28, 2012			July 30, 2011
	October 27, 2012			July 28, 2012
Mortgage	$	2,379		$	2,437
Mortgage on RFI facility	$	2,340		$	2,360
Less current portion of mortgage		(8182	)		(82	)
Long term debt, less current portion	$	2,~~298~~258		$	2,~~355~~278

On September 1, 2010, the Company completed a mortgage financing on its property in Bay Shore, NY with People’s United Bank pursuant to a loan agreement dated as of September 1, 2010 (the “Loan Agreement”) and received approximately $2,500 payable over 10 years at an initial fixed rate of 4.9% for the first 5 years, adjusted for the last 5 years as defined in the mortgage promissory note. Monthly principal repayments began in October 2010.

On November 2, 2011, the Company and its RFI Corporation subsidiary (“RFI”) entered into an amendment to the Loan Agreement. In connection with the amendment, the Company agreed to pledge to People’s United Bank a certificate of deposit in an initial amount of $2,420. The current amount of $2,431, including interest earned, is reported in Restricted cash. The amendment and pledge agreement were made in consideration for the waiver of certain covenants in the Loan Agreement that the Company would not have been able to satisfy as a result of the November 3, 2011 sale of Villa. The Company expects to pay off the mortgage using the restricted cash in fiscal year 2016, when the related pre-payment penalty period lapses.

OnNOTE ~~November~~6 2,– ~~2011, the Company and its RFI Corporation subsidiary (“RFI”) entered into an amendment to the Loan Agreement. In connection with the amendment, the Company agreed to pledge to People~~SHAREHOLDERS’s United Bank a certificate of deposit in the amount of $2,420. The amendment and pledge agreement were made in consideration for the waiver of certain covenants in the Loan Agreement that the Company would not have been able to satisfy as a result of the November 3, 2011 sale of Villa.EQUITY

~~NOTE~~During 8the -first ~~SEGMENT~~quarter ~~INFORMATION~~of fiscal year 2013, the Company issued 40,000 shares of restricted stock valued at $10.85 per share.

~~The~~This ~~Company~~restricted ~~has~~stock ~~two~~issued ~~reportable~~to ~~segments:~~a ~~Power~~director ~~Conversion~~vests ~~Group~~in ~~and~~full ~~Other. The~~on ~~“Other”~~the ~~segment~~first ~~includes~~anniversary ~~unallocated~~of ~~corporate~~their ~~costs~~issuance. The ~~and~~Company ~~the~~did ~~building~~not ingrant ~~Italy~~any ~~that~~options ~~was~~to ~~retained~~purchase oncommon ~~the~~shares ~~sale~~during ofthe ~~Villa. The~~quarter ~~previously~~ended ~~reported~~October ~~Medical~~27, ~~Systems~~2012. All ~~Group~~of ~~has~~the ~~been~~restricted ~~classified~~stock aswas ~~discontinued~~granted ~~operations~~under ~~(see~~the ~~Note~~Amended ~~2). Interim~~and ~~segment~~Restated ~~information~~2007 isIncentive asStock ~~follows:~~Plan.

For three months ended April 28, 2012	Power Conversion Group		Other			Total
Sales	$	3,050	$	-		$	3,050
Cost of sales		2,108		-			2,108
Gross margin		942		-			942
Operating expenses		801		619			1,420
Operating income (loss)	$	141	$	(619	)	$	(478	)

In the three months ended October 27, 2012, the Company recorded $3 of compensation expense related to stock options and $180 related to restricted stock issuances. In the three months ended October 29, 2011, the Company recorded $20 of compensation expense related to stock options and $88 related to restricted stock issuances. There were no exercises of stock options during the first quarter of fiscal 2013 or 2012.

For three months ended April 30, 2011	Power Conversion Group		Other			Total
Sales	$	2,732	$	-		$	2,732
Cost of sales		1,907		-			1,907
Gross margin		825		-			825
Operating expenses		704		400			1,104
Operating income (loss)	$	121	$	(400	)	$	(279	)

In October 2012, the Board of Directors approved the accelerated vesting of stock options and restricted shares granted to the Directors and certain former employees for all options that were not yet vested. As a result, the Company recognized an additional $55 of stock compensation expense in the first quarter of fiscal 2013.

For nine months ended April 28, 2012	Power Conversion Group		Other			Total
Sales	$	8,578	$	-		$	8,578
Cost of sales		5,756		-			5,756
Gross margin		2,822		-			2,822
Operating expenses		2,344		1,634			3,978
Operating income (loss)	$	478	$	(1,634	)	$	(1,156	)

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

For nine months ended April 30, 2011	Power Conversion Group			Other			Total
Sales	$	7,467		$	-		$	7,467
Cost of sales		5,824			-			5,824
Gross margin		1,643			-			1,643
Operating expenses		2,107			1,215			3,322
Operating loss	$	(464	)	$	(1,215	)	$	(1,679	)

Accumulated other comprehensive income (loss), a separate component of shareholders’ equity, includes the following:

	October 27, 2012		July 28, 2012
Foreign currency translation adjustments	$	548	$	358
Unrealized gains (losses) on marketable securities		799		(436	)
	$	1,347	$	(78	)

NOTE 98 –- ~~SHAREHOLDERS’ EQUITY~~CONTINGENCIES

During the first quarter of fiscal year 2012, the Company granted options to purchase 2,000 common shares at an exercise price of $9.50 per share. The options under this grant vest 25% immediately and 25% per year over the next three years. The aggregate fair value of these options was $12. During the second quarter of fiscal year 2012, the Company granted options to purchase 50,000 common shares at an exercise price of $10.00 per share. The options vest after one year of service. The aggregate fair value of these options was $306. All of the options were granted under the Amended and Restated 2007 Incentive Stock Plan. The fair value of these grant awards was determined using the following assumptions in the Black-Scholes model: an estimated life of seven years, volatility of approximately 63%, risk free interest rate of 1.31% to 1.36% and the assumption that no dividends will be paid.

In the three and nine months ended April 28, 2012, the Company recorded $85 and $162, respectively, of compensation expense related to stock options and $57 and $233, respectively, related to restricted stock issuances. In the three and nine months ended April 30, 2011, the Company recorded $21 and $86, respectively, of compensation expense related to stock options and $59 and $59 related to restricted stock issuances. There were no exercises of stock options during the first nine months of fiscal 2012 or 2011.

Effective as of the Annual Meeting of shareholders on December 15, 2011, the Board approved the accelerated vesting of all stock options and restricted stock held by James R. Henderson, a former director of the Company, in connection with his departure from the Board, in recognition of his long term service to the Company. Additional stock compensation expense of $39 has been recognized for the modification expense and accelerated vesting and $4 was recorded to recognize the accelerated vesting of the restricted stock issued in fiscal year 2011.

In the nine-month period ended April 30, 2011, the Company received $14,340 in proceeds on the completion of the Rights Offering in December 2010.

NOTE 10 - CONTINGENCIES

From time to time the Company may be a defendant in legal actions in various U.S. and foreign jurisdictions, arising from the normal course of business. In the opinion of management, such legal actions are not expected to have a material adverse effect on the financial condition or results of operations of the Company.

NOTE 119 – SUBSEQUENT ~~EVENT~~EVENTS

OnThe ~~June~~Company’s 6Board of Directors approved the early termination and cancellation of outstanding and exercisable options for four former officers, ~~2012~~directors and employees, ~~the~~effective ~~Company~~November 19, ~~along~~2012. The ~~with~~total ~~RFI~~options cancelled were for 44,480 ~~entered~~shares, ~~into~~of anwhich ~~asset~~24,800 ~~purchase~~options ~~agreement~~had (exercise prices at or below the ~~“Asset~~closing ~~Purchase~~price ~~Agreement”)~~of ~~with~~$12.85 ~~Ultra~~on ~~Electronics~~October ~~Defense~~8, ~~Inc~~2012 and 19,680 options had exercise prices that were above $12.85. The (net value of the ~~“Purchaser”),~~in-the-money anoptions ~~affiliate~~is $119. This amount was paid to the holders of ~~Ultra~~the ~~Electronics~~cancelled ~~Holdings~~options. Out-of-money ~~plc,~~options were cancelled without a UKcash ~~corporation~~payout to the former option holders. After this cancellation, 98,088 stock options remain outstanding.

Under the terms of the Asset Purchase Agreement, the Company has agreed to sell (the “Asset Sale”) its power conversion business, which is currently operated by RFI, to the Purchaser for the purchase price of $12,500 (the “Purchase Price”) (subject to a potential working capital adjustment), payable in cash. $1,250 of the Purchase Price is to be held in escrow to serve as security for payments in satisfaction of certain of the Company’s indemnification obligations and $237 of the Purchase Price is to be held in escrow to cover any potential net working capital adjustment. The Purchaser has also agreed to lease the RFI facility in Bay Shore, New York following the Asset Sale.10

~~The~~Item obligations of each of the parties to consummate the Asset Sale are subject to customary conditions, including, among other things, the conclusion of a review by the Committee on Foreign Investment in the United States with respect to national security concerns, the approval of at least two-thirds of the outstanding shares of our common stock, and the exercise by the holders of no more than 10% of the outstanding shares of our common stock of their statutory appraisal or dissenters2. MANAGEMENT’S ~~rights~~DISCUSSION ~~with~~AND ~~respect~~ANALYSIS toOF ~~the~~FINANCIAL ~~Asset~~CONDITION ~~Sale. The~~AND ~~Company~~RESULTS ~~has~~OF ~~agreed to pay to the Purchaser a termination fee of $725 in the event the Asset Purchase Agreement is terminated under certain circumstances.~~OPERATIONS

11(Dollars in thousands, except per share data)

~~The~~This ~~results~~Management’s Discussion and Analysis of ~~this~~Financial ~~business~~Condition ~~disposition~~and ~~will~~Results beof ~~reported~~Operations ascontains aforward-looking ~~gain~~statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment and are not guarantees of future performance. Actual results could differ materially from ~~discontinued~~those ~~operations~~expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s filings with the Securities and Exchange Commission including our Annual Report on Form 10-K~~. The~~ ~~RFI~~for ~~business~~the ~~represents~~fiscal ~~the~~year ~~entire~~ended ~~Power~~July ~~Conversion~~28, ~~Group~~2012 (“Form 10-K”), our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

The following is a summary of assets and liabilities of the Power Conversion Group:

	Balance as of April 28, 2012
Cash (a)	$	537
Trade receivables		1,539
Inventories		1,761
Prepaid expenses and other current assets		177
Total current assets	$	4,014
Property, plant and equipment, net (a)	$	1,509
Current liabilities	$	1,254

(a) The Company will retain all cash and $1,049 of the property, plant and equipment upon the sale.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share data)

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment and are not guarantees of future performance. They involve a number of risks and uncertainties that are difficult to predict including, but not limited to, our ability to introduce products as scheduled, our ability to obtain necessary product certification, our ability to implement our business plan, retention of management, changing industry and competitive conditions, obtaining anticipated operating efficiencies, securing necessary capital facilities, favorable determinations in various legal and regulatory matters, market and operating risks from foreign currency exchange exposures, and favorable general economic conditions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the fiscal year ended July 30, 2011 (“Form 10-K”), our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

OVERVIEW

~~The~~DGT ~~Company~~Holdings ~~manufactures~~Corp.’s ~~proprietary~~operations ~~high-voltage~~currently ~~power~~consists ~~conversion~~of ~~systems~~leasing ~~including~~two ~~electronic~~facilities ~~filters,~~that ~~high~~were ~~voltage~~not ~~capacitors,~~included ~~pulse~~in ~~modulators,~~the ~~transformers~~assets ~~and~~sold ~~reactors,~~to ~~and~~the aowners ~~variety~~ of ~~other~~the ~~products~~two ~~designed~~separate ~~for~~businesses ~~industrial,~~that ~~medical,~~the ~~military~~Company ~~and other commercial applications~~sold. The Company’s ~~manages its~~ business ~~in one operating segment: the Power Conversion Group. In addition~~, ~~the~~now ~~Company~~reported ~~has~~as aone ~~second~~ reportable segment, ~~Other,~~in ~~comprised~~addition ofto ~~certain~~management ~~unallocated~~of ~~corporate General and Administrative expenses and~~ the ~~building~~real inestate ~~Italy~~business, ~~that~~is ~~was~~expected ~~retained~~to onconsist ~~the~~primarily ~~sale~~ of ~~Villa. See~~capital ~~Note~~redeployment 8and identification of ~~the~~new ~~Notes~~profitable tooperations ~~the~~where ~~Unaudited~~it ~~Financial~~can ~~Statements~~utilize inits ~~this~~existing ~~Quarterly~~working ~~Report~~capital onand ~~Form~~maximize ~~10-Q~~the ~~for~~use ~~discussion~~ of the Company’s ~~segments~~net operating losses.

On ~~November~~August 316, ~~2011~~2012, after obtaining the required two-thirds vote approval by its shareholders, the Company ~~sold~~completed ~~Villa~~the ~~Sistemi~~sale ~~Medicali~~of Sits Power Conversion business (the “Power Conversion Business”) operated by RFI Corporation (“RFI”) to EMS Development Corporation (“EMS”), a New York corporation and an affiliate of Ultra Electronics Defense, Inc.~~p.A.~~ (“~~Villa~~UEDI”), ~~its~~pursuant ~~Italian~~to ~~subsidiary~~the asset purchase agreement dated as of June 6, ~~which~~2012, ~~comprised~~by and among UEDI, the ~~Medical~~Company ~~Systems~~and ~~Group~~RFI. ItIn consideration for the sale of the Power Conversion Business, EMS paid an aggregate of $12,500 in cash. $1,250 of such amount is being held in escrow to serve as security for payments in satisfaction of certain of the Company’s and RFI’s indemnification obligations and $237 is being held in escrow to cover any potential net working capital adjustment. The working capital adjustment is expected to be $480 unfavorable to the Company and is reflected as a ~~discontinued~~reduction ~~operation~~to the escrow cash balance, thereby netting $1,007 (classified as restricted cash in the accompanying financial statements). The Company incurred $709 of ~~the~~expenses ~~Company~~(primarily severance and ~~prior~~legal ~~periods~~costs) related to the sale which have been ~~restated~~included in the computation of gain on the sale. The Company retained the RFI facility and entered into a lease with EMS. The lease has a term of 5 years, with payments of $33 per month net to RFI, terminable by EMS, as the tenant, upon 30 days prior written notice. See Note 2 of the Notes to the Unaudited Financial Statements in this Quarterly Report on Form 10-Q for ~~details~~additional information.

On ~~June~~November 63, ~~2012~~2011, the Company, ~~along~~sold ~~with~~Villa ~~its~~Sistemi ~~RFI~~Medicali ~~Corporation~~S.p.A. ~~subsidiary~~ (“~~RFI~~Villa”), ~~entered~~its ~~into~~Italian ansubsidiary, ~~asset~~which ~~purchase~~comprised ~~agreement~~the (Medical Systems Group. It is reported as a discontinued operation in the ~~“Asset~~financial ~~Purchase~~statements ~~Agreement”)~~of ~~with~~the ~~Ultra~~Company ~~Electronics~~and ~~Defense,~~prior ~~Inc~~periods have been restated. See (Note 2 of the ~~“Purchaser”)~~Notes to the Unaudited Financial Statements in this Quarterly Report on Form 10-Q for additional information. The Company retained the building in Italy, housing Villa’s operations, which is subject to an ~~affiliate~~initial six year lease with Villa and an option for a subsequent six year period. Under the terms of ~~Ultra~~the ~~Electronics~~lease, ~~Holdings~~the ~~plc~~Company will receive 335 thousand euros in annual rent, apayable UKquarterly. The ~~corporation~~rent may be adjusted annually for changes in the consumer price index, as specified in the lease.

The obligations of each of the parties to consummate the Asset Sale are subject to customary conditions, including, among other things, the conclusion of a review by the Committee on Foreign Investment in the United States with respect to national security concerns, the approval of at least two-thirds of the outstanding shares of our common stock, and the exercise by the holders of no more than 10% of the outstanding shares of our common stock of their statutory appraisal or dissenters’ rights with respect to the Asset Sale. The Company has agreed to pay to the Purchaser a termination fee of $725 in the event the Asset Purchase Agreement is terminated under certain circumstances.

CRITICAL ACCOUNTING POLICIES

~~Complete~~The ~~descriptions of significant accounting policies are outlined in Note 1 of the Notes to Financial Statements included in our Form 10-K. Within these policies, the~~ Company has identified the accounting for revenue recognition, and deferred tax assets ~~and the allowance for excess and obsolete inventory~~ as being its current critical accounting policies due to the significant amount of estimates involved. ~~In addition, for interim periods, the Company has identified the valuation of finished goods inventory as being critical due to the amount of estimates involved.~~

Revenue Recognition

The Company recognizes rental revenue ~~upon~~during ~~shipment, provided there is persuasive evidence of an arrangement, there are no uncertainties concerning acceptance,~~ the ~~sale~~month ~~price~~it is ~~fixed, collection of the receivable is probable and only perfunctory obligations related to the arrangement need to be completed~~earned. ~~The~~For ~~Company’s~~the ~~products~~building ~~are covered primarily by ninety day warranty plans and~~ in ~~some cases optional extended warranties for a period of up to one year are offered. The Company establishes allowances for warranties on an aggregate basis for specifically identified~~Italy, asrent ~~well~~is aspaid ~~anticipated~~quarterly, ~~warranty~~with ~~claims~~unearned ~~based~~rent onbeing ~~contractual~~recorded ~~terms,~~as ~~product~~deferred ~~conditions~~income ~~and~~included ~~actual~~in ~~warranty~~accrued ~~experience by product line~~expenses. The Company recognizes service revenue when repairs or out of warranty repairs are completed. These repairs are billed to the customers at market rates. The Company periodically evaluates the collectability of their accounts receivable and provides an allowance for doubtful accounts when collection is not certain.

Deferred Income Taxes

The Company accounts for deferred income taxes in accordance with ASC 740, “Income Taxes,” whereby we recognize deferred income tax assets and liabilities for temporary differences between financial reporting basis and income tax reporting basis and for tax credit carryforwards.

The Company periodically assesses the realization of its net deferred income tax assets. This evaluation is primarily based upon current operating results and expectations of future operating results. A valuation allowance is recorded if the Company believes its net deferred income tax assets will not be realized. The Company’s determination is based on what it believes will be the more likely than not result.

For fiscal year 2011 the Company’s foreign tax reporting entity (which is classified as discontinued operations) was profitable, and its U.S. tax reporting entities incurred a taxable loss. Based primarily on these results, the Company concluded that it should maintain a 100% valuation allowance on its net U.S. deferred income tax assets. For the quarter ended ~~April~~October 2827, 2012, the Company continues to carry a 100% valuation allowance on its net U.S. deferred income tax asset.

Excess and Obsolete Inventory

We re-evaluate our allowance for obsolete inventory once a quarter, and this allowance comprises the most significant portion of our inventory reserves. The re-evaluation of reserves is based on a written policy, which requires at a minimum that reserves be established based on our analysis of historical actual usage on a part-by-part basis. In addition, if management learns of specific obsolescence in addition to this minimum formula, these additional reserves will be recognized as well. Specific obsolescence might arise due to a technological or market change, or based on cancellation of an order. As we typically do not purchase inventory substantially in advance of production requirements, we do not expect cancellation of an order to be a material risk. However, market or technology changes can occur.

Valuation of Finished Goods Inventory

In addition, we use certain estimates in determining interim operating results. The most significant estimates in interim reporting relate to the valuation of finished goods inventories. For interim periods, we estimate the amount of labor and overhead costs related to finished goods inventories. As of April 28, 2012, finished goods represented approximately 8.6% of the gross carrying value of our total gross inventory. We believe the estimation methodologies used are appropriate and are consistently applied.

RESULTS OF OPERATIONS

Three ~~and Nine~~ Months Ended ~~April~~October 2827, 2012 Compared to Three ~~and Nine~~ Months Ended ~~April~~October 3029, 2011

The following table summarizes key indicators of results of operations:

	Three Months Ended						~~Nine Months Ended~~
	Apr. 28, 2012			Apr. 30, 2011			Apr. 28, 2012			Apr. 30, 2011
	Oct. 27, 2012			Oct. 29, 2011
Sales	$	3,050		$	2,732		$	8,578		$	7,467
Rental income	$	189		$	-
Gross margin as a percentage of sales		30.9	%		30.2	%		32.9	%		22.0	%
Gross margin		113			-
Total operating expenses		~~1,420~~629			~~1,104~~619			~~3,978~~			~~3,322~~
Net loss from continuing operations		(~~439~~570	)		(~~270~~620	)		~~(1,111~~	)		~~(1,716~~	)
Diluted loss per share—continuing operations	$	(0.1115	)	$	(0.0716	)	$	~~(0.29~~	)	$	~~(0.62~~	)

~~Sales~~Rental income for the ~~third~~first quarter of fiscal 2013 was $189, which includes the RFI building since its sale on August 16, 2012, ~~increased~~as ~~11.6%~~well toas $3the Villa building in Italy,~~050~~ ~~from~~which $2was retained after the November 3,~~732~~ 2011 sale of our Villa Sistemi Medicali business in the ~~third~~prior ~~quarter~~fiscal year. Through the date of ~~fiscal~~the ~~2011~~sale of the Power Conversion Business, ~~due~~the rental income and building costs related to ~~increased~~this ~~volume~~lease atand underlying property were classified as General and Administrative expenses because the ~~Power~~rental ~~Conversion~~activities ~~Group~~were not the Company’s primary business activities. ~~The~~After the sale of the Power Conversion ~~Group~~Business, ~~encompasses~~ the Company had no other operations ofand, as such, this rental activity as well as the RFI rental activity became the Company’s primary business activity. Accordingly, rental income is being reflected as Sales and building expenses are being reflected as Cst of sales in the accompanying financial statements and prior period financial statements will reflect a reclassification of such amounts from General and Administrative expense to Sales and Cost of sales to be comparative to the current period presentation. As Villa was not sold and the lease did not commence until the second quarter of fiscal 2012, the first quarter of fiscal 2012 does not have any such rental activity.

~~Sales~~Gross margin for the ~~first nine months of~~ fiscal ~~2012~~2013 ~~increased~~first ~~14.9%~~quarter towas $~~8,578 from $7,467 in the same period of the prior year due to increased volume at the Power Conversion Group~~113.

~~Backlog for the Power Conversion Group at April 28, 2012 was $4,452 compared to $4,360 at July 30, 2011. Substantially all of the backlog should result in shipments within the next~~ 12 ~~to 15 months.~~

~~Gross~~Total ~~margin~~operating ~~for~~expenses in the fiscal ~~2012~~2013 ~~third~~first quarter ~~was~~were ~~30.9%~~$629 as compared to ~~30.2%~~$619 in the ~~same~~prior ~~period last~~ year’s ~~due~~first ~~to increased sales and a favorable product mix~~quarter. The ~~Process~~decrease ~~improvements~~is ~~affecting~~primarily ~~material~~due ~~utilization~~to ~~also~~a ~~attributed~~decrease toin ~~increased~~salaries ~~margins~~ and ~~reduced~~expenses ~~material~~related ~~variances~~to in the ~~fiscal~~Board ~~2012~~of ~~third quarter. Additionally~~Directors, ~~revenue~~offset ~~increased~~by ~~11.6% from the prior fiscal year period while the plant overheads remained flat resulting in~~ an increase ofin ~~gross~~stock ~~margin~~compensation ~~percentage over the comparable prior year results~~expense. ~~The prior year margin was adversely impacted by unfavorable product mix.~~

~~Gross~~Operating ~~margin~~loss for the ~~first~~fiscal ~~nine~~2013 ~~months~~first ofquarter ~~fiscal 2012~~ was ~~32.9%~~$516 as compared to ~~22.0%~~an inoperating ~~the~~loss ~~first nine months~~ of ~~fiscal~~$619 ~~2011. Process improvements affecting material utilization attributed to increased margins and reduced material variances~~ in the first ~~nine~~quarter ~~months~~ of fiscal 2012. Additionally, revenue increased 14.9% from the prior fiscal year period while the plant overheads remained flat resulting in an increase of gross margin over the prior year results. The comparable prior year margin was also adversely impacted by unfavorable product mix and increased reserves for excess inventory.

~~The~~Loss ~~following~~from ~~table~~continuing ~~summarizes~~operations in the ~~key~~first ~~changes~~quarter inof ~~operating~~fiscal ~~expenses~~2013 ~~for~~was ~~fiscal~~$570, ~~2012~~or $0.15 per basic and diluted share, compared to a loss from continuing operations of $620, or $0.16 per basic and diluted share in the prior year: period. There were 3.9 million weighted average diluted common shares outstanding (“shares outstanding”) in both the current and prior year first quarter.

	Three months ended April 28, 2012		Nine months ended April 28, 2012
Research and development	$	8	$	11
Selling, general and administrative		308		645
Change in operating expenses	$	316	$	656

Discontinued operations for the Medical Systems Group had no activity during the first quarter of fiscal 2013, compared to a net income of $629 in the first quarter of fiscal 2012 on sales of $11,392. The Villa subsidiary was sold on November 3, 2011.

~~Total~~Discontinued ~~operating~~operations ~~expenses~~related into the ~~fiscal~~Power ~~2012~~Conversion ~~third~~Group ~~quarter~~had ~~were~~net income of $18,~~420,~~451 orduring ~~46.6%~~the first quarter of ~~sales~~fiscal 2013, ~~compared~~which toincluded ~~$1,104,~~a orloss ~~40.4%~~on operations of $344 on sales, inof ~~the~~$78 ~~prior~~and ~~year’s~~a ~~third~~gain ~~quarter~~on disposal of $8,795. ~~The~~During ~~increase~~the isfirst ~~primarily~~quarter ~~due~~of tofiscal an2012, ~~increase~~the inPower ~~stock~~Conversion ~~compensation~~Group ~~expense (see~~had ~~Note~~operating 9income of ~~Notes~~$191 toon ~~Financial~~sales ~~Statements)~~of $2,602. ~~and legal~~The ~~fees~~Power ~~related~~Conversion toGroup ~~the~~only ~~pending~~included activity until its sale ofon August 16, 2012 and the ~~RFI~~fiscal ~~business~~2012 results included three months in the prior year.

16Net income for the first quarter of fiscal 2013, was $7,881, or $2.04 per basic and diluted share, compared to net income of $200, or $0.05 per basic and diluted share in the comparable prior year period.

Total operating expenses in the first nine months of fiscal 2012 were $3,978, or 46.4% of sales, compared to $3,322, or 44.5% of sales in the same period of the prior year. The increase is primarily due to stock compensation expense (see Note 9 of Notes to Financial Statements) and legal fees related to the pending sale of the RFI business.

Operating loss for the fiscal 2012 third quarter was $478 compared to an operating loss of $279 in the third quarter of fiscal 2011. The Power Conversion Group had operating income of $141 in the fiscal 2012 third quarter, compared to an operating income of $121 in the comparable period of last year. The Other segment, consisting of unallocated corporate expenses and the building in Italy, had an operating loss for the third quarter of fiscal 2012 totaled $619 as compared to $400 in the third quarter of the prior year.

Operating loss for the first nine months of fiscal 2012 was $1,156 compared to an operating loss of $1,679 in the first nine months of the prior year. The Power Conversion Group had an operating income of $478 in the first nine months of fiscal 2012, compared to an operating loss of $464 in the same period of the prior year. The Other segment had an operating loss for the first nine months of fiscal 2012 were $1,634 compared to $1,215 in the first nine months of fiscal 2011.

Loss from continuing operations in the third quarter of fiscal 2012 was $439, or $0.11 per basic and diluted share, compared to a loss from continuing operations of $270, or $0.07 per basic and diluted share in the prior year period. For the third quarter of fiscal 2012, there were 3.8 million weighted average diluted common shares outstanding (“shares outstanding”), compared to 3.8 million in the third quarter of fiscal 2011.

Loss from continuing operations in the first nine months of fiscal 2012 was $1,111, or $0.29 per basic and diluted share, compared to a loss from continuing operations of $1,716, or $0.62 per share, in the comparable prior year period. For the first nine months of fiscal 2012, there were 3.8 million weighted average diluted common shares outstanding, compared to 2.8 million in the first nine months of fiscal 2011. The shares outstanding have been restated to reflect the reverse and forward stock splits effected in January 2011.

Discontinued operations had no activity during the third quarter of fiscal 2012, compared to a net loss of $80 in the third quarter of fiscal 2011 on sales of $9,920. The Villa subsidiary was sold on November 3, 2011.

Discontinued operations had net income of $1,230 during the first nine months of fiscal 2012 on sales of $16,714, compared to net income of $2,769 in the first nine months of the prior fiscal year on sales of $45,581. The Villa subsidiary was sold on November 3, 2011 and the fiscal 2012 results only include four months of activity compared to nine months in the prior year. The prior fiscal year first quarter sales included unusually high volume that was not repeated in fiscal year 2012.

A net gain on the sale of Villa of $6,837 was recognized during the first nine months of fiscal 2012.

Net loss for the third quarter of fiscal 2012, was $439, or $0.11 per basic and diluted share, compared to net loss of $350, or $0.09 per basic and diluted share in the comparable prior year period. Net income for the first nine months of fiscal 2012 was $6,956, or $1.81 per basic and diluted share, which includes the gain on the disposal of Villa, compared to net income of $1,053, or $0.38 per basic and diluted share, in the first nine months of fiscal 2011.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

The Company’s sources of capital include, but are not limited to, cash flow from ~~operations~~rental activities, notes receivable and investment income. We believe that available short-term and long-term capital resources are sufficient to fund our working capital requirements, scheduled debt payments, interest payments, capital expenditures and income tax obligations for the next 12 months.

Working Capital — At October 27, 2012 and July 28, 2012, our working capital was approximately $55,034 and $45,193, respectively. The increase in working capital for the first quarter of fiscal 2013 related primarily to proceeds from the sale of RFI. At October 27, 2012 and July 28, 2012, the Company had approximately $19,282 and $38,169, respectively in unrestricted cash and $33,160 and $4,359, respectively, in securities available for sale. The securities available for sale include $17,168 of securities held in related party shares and $15,992 in United States Treasury Bills.

~~Working~~On ~~Capital~~August —16, At2012, ~~April~~the ~~28,~~Company ~~2012~~completed ~~and~~the ~~July~~sale ~~30,~~of ~~2011,~~its ~~our~~Power ~~working~~Conversion ~~capital~~business. The ~~was~~Company ~~approximately~~received $4711,~~305~~311 ~~and~~in ~~$38~~cash,~~147,~~ ~~respectively~~net of certain expenses. The ~~increase~~Company inretained ~~working~~the ~~capital~~RFI ~~for~~facility ~~the~~and ~~first~~entered ~~nine~~into ~~months~~a oflease ~~fiscal~~with ~~2012~~EMS. The ~~related~~lease ~~primarily~~has toa ~~proceeds~~term ~~from~~of ~~the~~5 ~~sale~~years, ofwith ~~Villa. At~~payments ~~April~~of ~~28,~~$33 ~~2012~~per ~~and~~month ~~July~~net ~~30,~~to ~~2011~~RFI, ~~the~~terminable ~~Company~~by ~~had~~EMS, ~~approximately~~as ~~$43~~the tenant,~~276~~ ~~and~~upon ~~$23,629,~~30 ~~respectively~~days inprior ~~unrestricted~~written ~~cash~~notice.

On ~~October~~November 133, ~~2010~~2011, ~~following~~the ~~approval~~Company bycompleted ~~shareholders~~the atsale aof ~~special~~all ~~meeting,~~of the ~~Company~~shares ~~filed~~of ~~with~~Villa. The Company retained the ~~New~~building, ~~York~~which ~~Secretary~~is ofsubject ~~State~~to ana ~~amendment~~six toyear ~~the~~lease ~~Company’s~~for ~~Certificate~~335 ofthousand ~~Incorporation~~Euro toannual ~~increase~~rate. The lease may be extended an additional six years after the ~~number~~initial ofterm ~~shares~~and ofthe ~~common~~annual ~~stock~~rent ~~authorized~~is ~~for~~adjustable ~~issuance~~based byon the ~~Company~~consumer ~~from~~price ~~50,000,000~~index tospecified ~~100,000,000~~in the lease agreement.

On November 3, 2011, the Company completed the sale of all of the shares of Villa. The Company received $22,761 in cash, net of certain expenses. The Company also repurchased shares of stock from two employees of Villa for $820. At the time of the repurchase, the acquired shares had a market value of $253 and the excess was deemed a reduction of the purchase price and reduced the net proceeds to $22,194. The Company also received a $4,538 dividend from Villa. The Company retained the building, which is subject to a six year lease for 335,000 euro annual rate. The lease may be extended an additional six years after the initial term and the annual rent is adjustable based on the consumer price index specified in the lease agreement.13

	Nine Months Ended
	Three Months Ended
(Dollars in thousands)	Apr 28, 2012			Apr. 30, 2011
	Oct. 27, 2012			Oct. 29, 2011
Net cash provided by operating activities	$	502		$	3,712
Net cash used in operating activities	$	(1,577	)	$	(188)
Net cash provided by (used in) investing activities		22,151			(183	)
Net cash used in investing activities		(17,308	)		(48)
Net cash (used in) provided by financing activities		(2,844	)		14,692
Net cash used in financing activities		(23	)		(126)
Effect of exchange rate changes on cash		~~(162~~21	)		~~559~~(258)
Net (decrease) increase in cash and cash equivalents		19,647			18,780
Net decrease in cash and cash equivalents		(18,887	)		(620)
Cash and cash equivalents at beginning of year		2338,~~629~~169			323,~~987~~620
Cash and cash equivalents at end of period	$	4319,~~276~~282		$	2223,~~767~~009

Cash Flows from Operating Activities – For the ~~nine~~three months ended ~~April~~October 2827, 2012, the Company ~~generated~~utilized $~~502~~1,577 of cash from operations, compared to ~~$3,712~~a ~~generated~~use of $188 in the comparable prior fiscal year period. The ~~change~~first isquarter ~~primarily~~of ~~related~~fiscal to2013 aincludes ~~decrease~~the inoperating ~~receivables~~losses infrom continuing operations, as well as the operating loss experienced by RFI prior to the sale of its Power Conversion ~~Group~~business. In addition, there was a reduction in ~~the~~accrued ~~prior~~expenses, due to payments made from continuing operations related to fiscal year 2012 activities.

Cash Flows from Investing Activities — ~~The~~For ~~Company~~the ~~received~~first ~~net~~three ~~proceeds~~months of fiscal 2013, the Company utilized $2227,~~194~~566 ~~from~~to ~~the~~purchase securities available for sale ofand ~~discontinued~~received ~~operations~~$11,311 ~~during~~in ~~the~~proceeds ~~second~~related ~~quarter~~to ofthe ~~fiscal~~sale ~~2012~~of RFI.

Cash Flows from Financing Activities —.The ~~During the nine-month period ended April 28, 2012 the~~ Company ~~paid~~made ~~$253~~payments toon ~~repurchase shares of~~ its ~~common stock and discontinued operations utilized $108 in cash in payments against~~ long -term debt~~. In~~ ~~connection with the sale~~ of ~~Villa,~~$20 during the ~~Company~~first ~~amended~~quarter ~~its~~fiscal ~~mortgage~~year ~~loan~~2013, ~~agreement~~compared ~~and agreed~~ to ~~pledge~~payments ~~to People’s United Bank a certificate~~ of ~~deposit in the amount of~~ $~~2,425. The~~17 ~~amendment and pledge arrangement were made~~ in ~~consideration for~~ the ~~waiver~~prior ofyear’s ~~certain~~first ~~loan agreement covenants that the Company would not have been able to satisfy as a result of the sale of Villa~~quarter. ~~During~~Also ~~the~~during ~~nine-month period ended April 30, 2011,~~ the ~~Company received $2,500 of proceeds from a mortgage on its Bay Shore, NY facility. The~~ prior ~~fiscal~~ year’s ~~also~~first ~~included $14~~quarter,~~340~~ indiscontinued ~~proceeds received on completion of the Rights Offering in December 2010. Discontinued~~ operations utilized $~~2,095~~109 in payment of long-term debt~~, primarily the lump sum paid for the purchase of the Villa building~~.

The Company’s ~~debt~~contractual ~~included~~obligations, inincluding ~~contractual~~debt ~~obligations~~and operating leases, as previously disclosed in our Form 10-K ~~has~~have not changed materially at ~~April~~October 2827, 2012. The ~~operating leases related to Villa are no longer a contractual obligation of the Company. The~~ terms of these facilities are more fully described in Note 7 of the “Notes to Financial Statements” contained in our Form 10-K and are incorporated herein by reference.

OFF BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

The Company has not had any investments in unconsolidated variable interest entities or other off balance sheet arrangements during any of the periods presented in this Quarterly Report on Form 10-Q.

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

Accounting standards that have been issued by the FASB or other standard setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not hold market risk sensitive instruments for trading purposes. The Company, however, recognizes market risk from interest rate and foreign currency exchange exposure. There have been no changes in financial market risks as described in our Form 10-K.

Item 4. CONTROLS AND PROCEDURES

The Company, under the supervision and with the participation of the Company’s management, including ~~John~~Terry ~~J. Quicke~~Gibson, President, ~~and~~ Chief Executive Officer, and ~~Mark A. Zorko,~~ Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures”, as such term is defined in Rules 13a-15e and 15d-15e promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the President, Chief Executive Officer and Chief Financial Officer ~~have~~has concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to ensure that all material information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure and that all such information is recorded, processed, summarized and reported as specified in the SEC’s rules and forms.

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

1915

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information set forth under Part I, Item 1 contained in Note 108 of Notes to Financial Statements is incorporated herein by reference.

Item 1A. RISK FACTORS

The risk factors included in our Form 10-K have not materially changed.

Item 6. EXHIBITS

10.1***	Asset Purchase Agreement, dated as of June 6, 2012, by and among Ultra Electronics Defense, Inc. DGT Holdings Corp. and RFI Corporation filed as Exhibit 2.1 to DGT Holdings Corp. Current Report on Form 8-K filed June 7, 2012 and incorporated herein by reference.
31.1*	Certification of the Principal Executive Officer and Principal Financial Officer, Terry Gibson, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1*	Certification of the Principal Executive Officer, John J. Quicke, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Principal Executive Officer and Principal Financial Officer, Terry Gibson, pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer, Mark A. Zorko, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 27, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Statements of Operations, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) Notes to Financial Statements
32.1*	Certification of the Principal Executive Officer, John J. Quicke, pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Principal Financial Officer, Mark A. Zorko, pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 28, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Statements of Operations, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) Notes to Financial Statements
	* Filed herewith
	** Furnished and not filed herewith
	*** Previously filed

2016

SIGNATURES

Pursuant to the requirements 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.

DGT HOLDINGS CORP. /s/ ~~John~~Terry J.Gibson ~~Quicke~~Terry ~~John~~Gibson J.President, ~~Quicke~~Chief ~~President~~Executive Officer and Chief ~~Executive~~Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

~~/s/~~Dated: December ~~Mark~~10, ~~A. Zorko Mark A. Zorko Chief Financial Officer (Principal Accounting Officer)~~2012

Dated: June 8, 2012

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